COP28 closed last week with a landmark statement on action to be taken against carbon emissions. For the first time in the decades that COP has been meeting to discuss climate change, the official communiqué released at the end of this year’s summit specified that global energy systems must transition “away from fossil fuels” in order for our climate goals to be met.
A historic admission, but the language stopped short of specifying precisely when and by how much that transition would occur, leaving many critics to dismiss the outcome as yet more greenwashing.
This week, I spoke with Emilio Tenuta, chief sustainability officer at Ecolab, about the trust gap that exists between consumers and leaders when it comes to action on climate change.
“We have clear signals that consumers don’t think that companies and governments are being bold enough, and I think the impetus for that is the lack of clear plans,“ Tenuta says, referring to his company’s recent report on water stewardship.
The Watermark Study showed that while most respondents think government and business leaders should be responsible for ensuring water safety, over half think those same actors are not “really leaning in” to resolve water issues or climate change. Therein lies the trust gap, which we’ve seen in other industries, too.
To some degree that trust gap is a matter of perception, Tenuta says, where consumers or other outside observers may “lack complete or accurate information” about what actions leaders are taking. At other times, Tenuta says, businesses are wont to “exaggerate” their environmental endeavors. Resolving both issues relies on transparency.
“In order for businesses to really be viewed as credible, they need to be able to really document a baseline of where they’re starting from and having a clear ambition of where they need to go,” Tenuta says.
When a company sets an ambitious goal on climate, such as to eliminate emissions by 2050, but provides no information on how they’ll get there or even on how they’ll measure their results, it’s a clear sign of greenwashing. To be trusted actors, leaders need to be specific and accountable. Tenuta says, “It’s not enough to just do the work; people want to also know that it’s been third-party reviewed.”
Resolving that trust gap is ultimately good for business as, according to Ecolab’s report, consumers are increasingly voting with their wallets, favoring brands that they feel are aligned with environmental needs. However, convincing investors that taking an environmental stand is the right thing to do requires a little more data and a greater focus on communicating business outcomes rather than environmental ones.
Tenuta says fixing that trust gap relies on proving that adopting an environmental stance satisfies three dimensions: It delivers on business objectives, it improves operational efficiency, and, lastly, it delivers a measurable environmental impact. It isn’t enough to show something is good for the planet, it also has to be good for business.
In terms of COP, proving that transitioning to green energy will be good for business has always been the biggest sticking point holding back action from fossil fuel companies—which, in turn, has prevented broad action on climate from other industries. It had better not take 29 more meetings before those trust gaps are closed.
In other news, Trust Factor will be off for the holidays, returning Jan. 7. If you have any thoughts or ideas on what other aspects of trust you’d like us to dive into next year, send me an email.
Eamon Barrett
eamon.barrett@fortune.com
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