ESG Reporting and Greenwashing

Do you think companies in the S&P 500 are acting beyond the yearly reporting and media campaigns (net zero pledges) to reduce their emission, or is it all greenwashing?

While I hesitate ever to make a blanket statement, I believe that most companies do not go beyond their ESG reporting and CSR marketing campaigns to tackle issues such as emissions. No governing board dictates what data points must be represented in yearly ESG reporting (unless it is a B-Corp). It is within these documents, and many are fun to review, that organizations will highlight the good and not mention the areas where they are falling behind. Last semester I reviewed Amazon's 2020 ESG. They shared six pages of fluff related to employee satisfaction within that report. Around this time, unionization occurred, and the company's unsafe work conditions were a nationwide topic. Insert a different company and this misleading information could easily have been about the environment and emissions rather than people. While corporations do good work, I think much of it is, sadly, greenwashing.

Anything else you'd like to add about this topic?

I am sharing the post I alluded to within my answer above because I believe someone might find the takeaway I shared below easily applicable to greenwashing. Additionally, you can find the link to Amazon's 2020 ESG report to see exactly how some companies will bait and switch their highlighted impacts.

"Through colorful and infographic-filled sustainability reports, we see a specific corporation's positive impact on society. It is helpful to see what companies are doing in CSR, but let us remember that it is not in the company's best interest to share what they are not doing.

When reviewing a corporate sustainability report, ask yourself these questions:

What are common ethical dilemmas that arise within the corporation's industry? How has the company mitigated these issues to support an ethical environment?

Has the company been reported on recently in the news? Was the story favorable or problematic? If problematic, are these issues addressed?

While it is cynical to believe corporations are distracting investors and customers with only their positive work, realistically, of course, they are. We need to take a step back and devote time to thinking about the stories not being told within these documents.

The corporate sustainability report I reviewed was from Amazon, published in June 2020. Find it here: https://sustainability.aboutamazon.com/pdfBuilderDownload?name=sustainability-all-in-june-2020

The 83-page published report shared insights into Amazon's commitment to the Environment, People, and Governance. They have each aspect of ESG covered, right? What stuck out to me was that under the "People" section of the document, only 6-pages are dedicated to "Employees and Partners." Many images, large-font headlines, and infographics are visible in this sub-section. What did they leave out? Any information about working conditions for their employees. If we fast-forward less than two years later, Amazon employees have begun unionizing for the first time in their company's history. This is in response to unsafe work conditions the company has subjected its warehouse employees to during the COVID-19 pandemic.

So while we review the great work companies share within their corporate sustainability reports, remember to ask yourself a few questions before determining whether their reporting is helpful or not."