In a survey published in July, GlobalData gauged the business community’s current sentiment towards emerging technologies across industries. The responses underlined the importance of sustainability, counterpointed by a perception that greenwashing is increasingly becoming an issue in this area.

GlobalData analysts assess that once the pandemic is under control, sustainability will be the top cross-sector theme to give executives restless nights in the 2020s. Achieving environmental, social & governance (ESG) targets will be high on every CEO’s agenda.

With this in mind, GlobalData has been asking business respondents since the start of this year about their companies’ attitudes towards sustainability. The first of two sustainability questions asks if respondents’ companies have changed their behaviour to meet sustainability goals.

Only a minority of those polled (17%) believe that most companies are sincerely committed to sustainability. Almost 60% of the GlobalData sample continue to hold a somewhat cynical view on sustainability commitments, believing them to be a ‘greenwashing’ marketing exercise in some or most cases.

Interestingly, 33% did not know if their company has taken action on sustainability. According to GlobalData, this might mean that either companies are not effectively communicating their ESG strategies, or that the actual number of companies not taking action is larger than the 28% who said their company has not changed its practices.

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While the survey found that more companies are changing their behaviour than not at 40%, greenwashing remains a hurdle to be overcome if the global economy is to reach net-zero greenhouse gas emissions by 2050.

According to the science, 2050 is essential to ward off the catastrophic effects of climate change. Net-zero may also give businesses an impetus to turn greener: A report by the Universal Ecological Fund estimates that failure to reduce emissions will cause economic losses of US$2bn per day by 2030. This will be due to weather events exacerbated by human-induced climate change.

A recent analysis by reinsurance leader Swiss Re has also found that unchecked temperature rise will reduce global economic output by between 11% and 14% by 2050, potentially cutting economic output by a staggering $23tn each year.

Turning net-zero into reality will require higher investment in low carbon technologies, carbon capture and storage technologies plus carbon offset projects. There will also need to be serious investment in renewable energy sources. But GlobalData’s polling results suggest greenwashing and company ineffectuality may be a major obstacle to effective action.

Greenwashing in Saudi Arabia and aviation

The term greenwashing came about as companies began making unsubstantiated claims about the environmental benefits of their products and practices.

One example is gas and petroleum giant Saudi Aramco, cited by GlobalData as a laggard in the climate change stakes. The company has played up its role in the Oil & Gas Climate Initiative (OGCI), which aims to reduce the carbon intensity of fossil fuel production. However, the OGCI does not set absolute targets for emission reduction.

The company has been “less than transparent in its emissions disclosures” according to a report on ESG in the power sector. Saudi Aramco is one of the few oil and gas supermajors that does not disclose its Scope 3 emissions, meaning those emitted by a company’s customers. A report from Bloomberg Green estimates that as much of 50% of Saudi Aramco’s emissions are undisclosed this way, equivalent to 57.9m metric tons in 2019.

The implications are worrying considering Saudi Aramco’s contribution to the ongoing climate crisis through oil production and refineries of jet fuel, diesel and more. In 2019, the Climate Accountability Institute found that between 1965 and 2017, the Dhahran-headquartered group was the world’s largest emitter of carbon dioxide, contributing over 59bn metric tons in that time. This figure is 37% more than the second-largest emitter, the US's Chevron.

Saudi Aramco’s silence may be damning, and its work in the OCGI not significant on the ESG front. But, greenwashing goes beyond what businesses don't reveal while professing to be environmentally-friendly. It also applies to claims businesses make.

In a report on sustainability in travel and tourism, GlobalData cites the example of airline TUI. In its sustainability strategy, the British-German company claims to be the only integrated tourism business to fly the Boeing 787 Dreamliner. The aircraft, introduced in 2007, is 20% more fuel-efficient than the Boeing 767 it has replaced, and produces around 60% less noise pollution.

TUI stated that it operated eight 787 Dreamliner planes in 2015 and would expand its fleet up to 17 by 2019. However, according to the United Kingdom Civil Aircraft Register, it has 14 of these aircraft in its fleet as of the start of September 2021, 11 of which are in service according to In contrast, TUI operates 31 of the 737–800 aircraft, all bar one of which are in service currently. These models are significantly smaller, meaning an increase in flight frequency that will be more harmful for the environment.

“Coming short on a claim of this magnitude could be seen as greenwashing,” states GlobalData. “Consumers who are constantly making an effort to use green and natural products to reduce their impact on the environment may be discouraged if they are misled by companies.

“If consumers lose trust in a service or product, they might start to feel that their efforts won’t make a difference, which may cause them to reduce their sustainable efforts.”

It’s not all doom and green gloom

Examples like these go some way to explain why business insiders may have a cynical view of sustainability commitments. But, that doesn’t mean all companies are guilty of greenwashing; indeed, some energy names are head and shoulders above the rest.

GlobalData’s report on ESG in power points to Iberdrola as a leader in this area. In fact, the Spanish company is the only one in GlobalData’s power utilities scorecard to receive the highest thematic score of five for both the ESG and renewable energy themes.

The $83bn energy utility, which deals with power generation plants alongside transmission and distribution facilities, has made several leading commitments to reducing emissions, with approved science-based targets to reduce absolute Scope 1, 2 and 3 emissions by 45% by 2030, from a 2017 base year.

Scope 1 emissions refer to those directly made by a company, and Scope 2 to indirect ones such as the energy it uses that comes produced on its behalf. From 2018 to 2019, the company reduced its Scope 1 emissions by 1.6% from 13.6 Mt to 13.4 Mt, its Scope 2 emissions by 18% from 2.54 Mt to 2.08 Mt and its Scope 3 emissions by 1.9% from 54.2 Mt to 51.1 Mt.

As of 2021, over 75% of the company’s active installed generation capacity is emission-free, according to the GlobalData Power Plant database, with the company having closed 17 coal and oil facilities since 2001.

Iberdrola’s 'Smart Mobility Plan', meanwhile, seeks to deploy nearly 150,000 electric vehicle (EV) charging points by 2025. As more charging points are essential to establish EV usage, GlobalData believes this effort will “help on the path towards the decarbonisation of transport.”

To top it off, Iberdrola is also the world’s largest corporate issuer of green bonds, having issued over $13.6bn-worth since 2014. Its Scottish Power subsidiary, meanwhile, became the first integrated energy company in the UK to generate 100% of its power from wind.

These actions come with associated up-front costs, the size of which can keep companies ineffectual and mired in the art of greenwashing. But, GlobalData analysts remind energy stakeholders that going green doesn’t necessarily equate to red ink in a company's accounts.

“Iberdrola’s push towards sustainability helped the company post an increase in net income in 2020, one of the few energy companies to do so,” GlobalData reports. “As renewables were the only energy source to experience increased demand in 2020, a trend likely to continue throughout the decade, those companies making efforts to decarbonise their generation will likely see benefits on the balance sheet too.”

Another leader cited by GlobalData as improving in its financials is NextEra. The US energy company produces more electricity from wind and solar than any other in the world, which got it onto Fortune’s 2019 list of the World’s Most Admired Companies, ranking top in the electric and gas utility industry for the 12th time in 13 years.

“NextEra’s consistent recognition by third parties as a leader in good governance has helped drive shareholder value, with the company’s share price increasing 136% in the five years to June 2021, outperforming most of its US peers,” GlobalData analysts write.

Greenwashing and gold standards

If these exemplars don’t inspire businesses to stop greenwashing and start going properly green, then perhaps regulation will. In August, Energy Monitor reported that the European Commission's proposed 'gold standard' for the green bond market will address investors' greenwashing concerns by assuring them of truly climate-friendly investments.

The Commission is aiming for full transparency on bond proceeds via detailed reporting and for all green bonds to be subject to external review to ensure compliance with European Union taxonomy.

Despite registering a total market value of $1.1trn (€930bn) in 2020, the green bond market has no universal standard within the EU, something that the proposed European Green Bond Standard (EUGBS) should resolve (although it will be voluntary). The bonds can be used to fund projects of up to ten years that are aligned with a new EU taxonomy for green investments.

The move is likely to go down well at COP26. The UN Climate Change conference is likely to bring more power to the net-zero movement, something that the energy sector should be conscious of when considering ESG.

Note on data: GlobalData ran six polls on its Verdict network of B2B websites, which had 49m users in the period from 30 June 2020 to 1 July 2021. Poll participants are professionals from more than 30 industries. In total, the six polls received 2,341 responses distributed unequally between each of the polls.