Greenwashing Indeed Comes in All Colors

The new SEC rules provide a roadmap for pulling ESG (environmental, social and governance) reporting into the mainstream, with standardized methodologies leading to improved transparency. In the meantime, though, investors who are determined to put their dollars into planet-saving commercial endeavors need to look behind the corporate rhetoric, take a close look at any greenwashing and consider how a company fits into the big picture.

There’s bright green greenwashing …

ExxonMobil provides one of the more obvious cases of greenwashing, which refers to the practice of highlighting the eco-friendly aspects of a company in order to deflect attention from other not-so-friendly elements.

The energy giant is well-known as one of the leading financial backers of the climate denial lobby, though in recent years the company has focused less effort on providing direct funding to lobbying activities.

Further, ExxonMobil is also among the shrinking number of oil and gas stakeholders that have failed to invest significant resources in proven renewable energy technology, like wind or solar energy. Instead, touts its involvement in the controversial area of carbon capture. The company also highlights its longstanding algae biofuel research program, an area that has yet to bear fruit. 

That is greenwashing, plain and simple. 

… and then, there’s the “other” greenwashing … 

It’s relatively easy for serious ESG investors to avoid companies like ExxonMobil. The more difficult task is to unpack the role of CEO’s and board members who control stakes in multiple companies. 

With his high public profile and constant presence on social media, Elon Musk provides one such example. To his legion of fans, Musk is a planet-saving force of superhero proportions, mainly through his investment and continuing leadership role in Tesla Motors, the electric vehicle (EV) company founded by Martin Eberhard and Marc Tarpenning in 2003. The company recently changed its name to Tesla, Inc., reflecting its activities in the solar energy, energy storage, and EV charging fields. 

That’s all well and good in terms of helping to decarbonize the transportation sector, but from a broader perspective Tesla also serves as a convenient platform for supporting Musk’s carefully cultivated image as a visionary, maverick-y breaker of rules. His fans are quick to forgive, or simply ignore, a list of bad behaviors by the company and by Musk himself, including misdirection on COVID-19 safety and a series of allegations of securities fraud, most recently regarding his activities in cryptocurrency and Twitter.

Tesla, Inc, also serves to deflect from Musk’s SpaceX venture, which presents a raft of ESG issues including carbon emissions from the fuel used by SpaceX rockets, and environmental impacts related to the company’s footprint in an ecologically sensitive area in Texas. 

Reporters who cover the technology beat are beginning to draw attention to apparent gaps in SpaceX’s environmental impact documents. They have also taken note of the company’s apparent plans to build an on-site power station and procure a large amount of natural gas, either by drilling its own wells or piping it into the Texas facility. Neither option fits the profile of a planet-saving hero.

In a possibly related matter, the media spotlight is also beginning to turn attention to the environmental effects and energy demands of cryptocurrency mining, including the impact of Musk’s preferred digital currency, Dogecoin.

… and the biggest greenwash of all.

Now that the full impacts of the climate crisis are careering into view, car culture itself has come under fire, and that is perhaps the biggest example of greenwashing of all.

For all the personal and economic opportunities fostered by car culture, the model of individual car ownership is also an exclusionary, disrupting force, whether the vehicle is zero-emissions or not.

In addition, the prospect of further clogging up city streets and other public spaces with EV charging stations has raised new issues for urban planners.

If investors like Elon Musk applied their supposed genius, public influence and financial clout to community planning, mass transportation, walkable and bike-friendly spaces and car free zones, the global economy would decarbonize at a much faster, and far more equitable pace.

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