Corporate 'Greenwashing'

Original article (in Vietnamese): https://vnexpress.net/tay-xanh-doanh-nghiep-4781672.html

While watching badminton at the Paris Olympics, I noticed that during matches, the shuttlecock was replaced every 3-5 minutes. On average, players changed shuttlecocks about 20 times per match. What happens to these shuttlecocks after use?

Source: TTXVN - Vietnam News Agency

The answer is unsurprising. Badminton is a sport that demands absolute precision. The condition of the shuttlecock plays a crucial role. Those that are no longer usable are destroyed because they cannot be recycled. In a 2021 study, Belgian scientists estimated that about 220 million people worldwide play badminton, and the number of discarded shuttlecocks amounts to roughly 6.6 billion per year; a significant impact on the environment.

Another sport with a major environmental impact is golf. Many consider golf a luxury sport, which is also true from an environmental protection perspective. Around the world, large areas of forest land have been cleared to make golf courses. But that is just the "initial investment." Statistics in the US show that maintaining the grass on 30 golf courses in Salt Lake requires 34 million liters of water daily, equivalent to the volume of 13 Olympic-standard swimming pools. Furthermore, fertilizers, pesticides, and plant protection products release large amounts of chemical residues, polluting the air and water sources in surrounding areas.

The 2012 London Olympics advertised that total carbon emissions would be reduced by 50% through the use of 20% renewable energy. The actual figure was that only 9% green energy was used, although it was still rated as one of the "greenest" Olympics in history. In 2020, Tokyo also set ambitious goals for carbon neutrality and zero waste. This was partly achieved due to an objective reason: the Covid-19 pandemic. No spectators and tourists meant no carbon emissions from travel activities and, naturally, no waste. At the 2022 World Cup, things were worse. Marketed as the most environmentally friendly football tournament ever, it was actually estimated to be the World Cup that emitted the most carbon in history.

But we cannot ban humans from playing badminton, and thus billions of damaged shuttlecocks still need to be replaced each year. Nor can we close golf courses, as looking at the positive side, these projects bring potential to attract investment and tourism, creating job opportunities and income for locals.

This goes to show that environmental protection is always a difficult problem, the hardest part being balancing economic benefits and human recreational sports needs with negative impacts on resources.

One reason why humans do not truly act to prevent bad influences on the environment is that they always consider themselves exceptions. Everyone knows using public transport protects the environment, but still clicks their tongue and takes a personal vehicle: adding one person driving on the road surely won't affect anything.

The same problem seen in sports like the Olympics also occurs with businesses. Business executives all agree on the need for immediate action towards the environment, but economic benefits are still too important to them.

ESG investment is no longer a new concept. It is an acronym for Environmental, Social, and Governance. ESG standards are evaluated as effective tools to recognize the degree of attention to social responsibility of organizations and businesses.

Currently, marketing campaigns of many businesses tend to focus on the 'E' factor - Environment. This can be explained through the Value Proposition Canvas model. In the model, two important trends to find touchpoints with potential customers are through Pain (difficulties that customers are struggling with) and Gain (achievements that customers want to obtain).

The main characteristic of environmental protection strategies is the default assumption that they will leave a good impression on consumers. Targeting the environment is the easiest way to find a touchpoint when information about climate change and environmental protection is being disseminated with increasing frequency. Everyone feels distressed by unpredictable developments of extreme weather (Pain), and everyone wants to contribute a little to the work of environmental protection (Gain).

Sports, like environmental protection, inherently carry a positive impression. This is the main reason why many businesses use sports and the environment in their "Greenwashing" activities. Greenwashing is the act of deceiving consumers by making false claims about the eco-friendliness of the products or services provided.

In Vietnam, the Government has committed to participating in many common global goals such as reducing greenhouse gas emissions by 2030, ending forest soil loss by 2030, or carbon neutrality by 2050. According to PWC's 2022 transparency report on the state of ESG in Vietnam, 80% of interviewed businesses said they were aware of the new global trend and had commitments to implement it in the near future (short term 2-4 years).

However, up to 82% of businesses replied that the main purpose of participating in ESG was to improve brand image and reputation. This is a present danger leading to greenwashing activities. Among them, 37% of businesses said the purpose of participating was pressure from state management agencies; 40% was pressure from investors and shareholders.

The reality shows that the challenge for green transition activities in Vietnam still lies in substantive environmental protection awareness. If participating in ESG is seen as a formality to avoid public pressure or for commercial purposes, examples of greenwashing will continue.

The biggest current challenge for businesses is a lack of knowledge to collect data to prepare for reporting frameworks. 71% of businesses replied they lacked basic understanding of current reporting standards.

In my opinion, to enhance environmental protection awareness as well as knowledge about ESG investment and green transition effectively, businesses need the direct participation of the board of directors instead of just recruiting staff to be in charge. Businesses also need to actively exchange information and jointly call for the issuance of a standard guide on ESG practice and reporting from authorities.

On the side of management agencies, besides continuing to widely disseminate ESG standards to small and medium enterprises through business forums, it is necessary to focus on applying and integrating evaluated ESG indicators into different fields such as securities, credit appraisal, or risk management... This is considered hitting two birds with one stone, as it both enhances business awareness, helping to orient the development of the green economy, and avoids wasting resources used in evaluating ESG standards.

In badminton, perfect shots always require the original quality of the shuttlecock. Environmental protection also always needs systematic and substantive actions, rather than formalities.

By Pham Tam Long