This month we look at feet rather than food and discuss why brands must tread very carefully when making green claims. By David Burrows.
This column tends to focus on carbon footprints rather than casual footwear but news that Crocs has decided to push its net-zero target back from 2030 to 2040 caught our eye. The company’s latest ESG report and accompanying press release both do well to hide this reversal. The latter notes the 2021 commitment (date not stated) has been “revisited” and the company “has made a critical update to this environmental goal and is now committed to its journey to become a net-zero company by 2040”. This despite the earlier target being “necessary, and frankly, neither vast nor fast enough”.
The ESG report is titled ‘Comfort 2022’, but Crocs is anything but with its current carbon trajectory. Emissions overall were up 45% to a shade under 783ktCO2e in 2022 versus 2021, which has clearly forced a rethink. Net-zero by 2040 is “a more realistic and credible goal given that our total emissions are significant, our growth projections are aggressive, and our footprint looks quite different today than when we set our initial goal”.
Crocs acquired Heydude, another shoe company, which has seen its footprint rise but reading the report it’s clear that a commitment was made without comprehensive analysis of how it might be achieved. It was just one of many such promises made around the time of the COP27 climate conference in Glasgow. “We will sadly see more of this in coming years,” wrote sustainability consultant Mike Barry on LinkedIn.
Drunk and orderly
Croc’s report looks lovely but the story is an ugly one (so far). The attempt to hide the decade long delay – going so far as to put the date in brackets: “Journey to net-zero (by 2040”) – also grates. Why not be transparent – like this effort from The Wine Society?
The level of detail published in the business’s carbon footprint report impressed 3Keel, the consultancy that crunched the numbers. There is acknowledgement that scope 3 targets are currently out of reach (34% is possible versus a 50% ambition) but there is time before 2032 to close that gap. It offers insights into the business’s challenges, ranging from supplier engagement to sourcing of recycled packaging materials, and is open about more controversial approaches like carbon insetting (see last month’s Notebook).
Punch Pubs has also published a report detailing its emissions and ambitions. Total emissions were almost 144ktCO2e, with 93% in scope 3. It has a target to reduce scopes 1 and 2 emissions by 80% by 2032 and be net-zero by 2040. Targets for scope 3 emissions don’t appear to be in place yet but a full carbon roadmap is “coming soon”.
Revolution Bars Group is already there, with its net-zero commitments having been approved by the Science-based targets initiative (SBTi). The 89-site group must reduce absolute scope 1 and 2 emissions by 99.6% by 2030 and scope 3 by 30% within the same timeframe.
There was also good news from Ceres recently: the 50 US food companies it’s been benchmarking on their emissions disclosure and reduction targets showed 33 now offer up scope 3 emissions in their GHG inventory and 29 disclose scope 3 emissions in their general GHG targets. But only 12 have SBTi-validated targets.
However the analysis also shows that only 15 of the 27 companies that had full emissions disclosure and targets clearly identified the key drivers of their scope 3 emissions. “Without this information, there is no way of knowing whether the actions companies are taking are targeting the largest drivers of the company’s emissions footprint,” Ceres noted.
Just do it
We are certainly seeing more companies disclose more about their impacts, which is good news. But there are concerns that some see this data gathering as a tick-box exercise. And, as the Tortoise Better Food Index shows, there are those still keen to keep their scope 3 footprint a closely guarded secret, or pretend they are daintier than they actually are.
Companies such as Pilgrim’s UK and Avara Foods decline to disclose their scope 3 emissions publicly, despite reporting to the SBTi, noted Tortoise. Avara said: “we do share our scope 3 – but with organisations and partners who we are confident understand the detail and with whom we collaborate on emission reduction”. Ah, so it’s best that consumers (and journalists?) don’t have the full picture because all those (big) numbers will just confuse us?
Turning reports into reductions is the next stage some (or rather very few) companies are entering – and we are already in 2023 with 50% cuts needed by 2030. CDP research shows 0.4% of 18,600 global companies have a detailed, well thought through, resourced plan to deliver their ambitions. (A climate transition plan is a time-bound action plan that outlines how a company will achieve its strategy to align its assets, operations, and entire business model with the latest and most ambitious climate science recommendations. They are vital for companies to remain on track and demonstrate to capital markets and consumers how they will reach net-zero).
Many businesses say a lack of budget has forced them to put the brakes on net-zero plans. Some 38% offered up this excuse in a global survey of 1,000 firms (including 100 from the UK) reported by edie.net. The bigger issue however was keeping up with regulations (45%). There is certainly a heady mix of reporting rules on the way.
Don’t do it
Perhaps equally sweat-inducing for companies are the ever-tightening rules around green claims. Carbon neutral is now at the heart of proposals in the EU to prevent greenwashing and such claims could soon be squeezed out.
In June, for example, the Advertising Standards Agency (ASA) ruled that an Anglian Water advert was misleading. Anglian was doing things that had a positive impact on the environment but was also doing things that weren’t – all those sewage discharges that have been headline news of late. “Their performance was significantly below target (red status) for the number of serious pollution incidents,” ASA noted. “Furthermore, Anglian Water had had enforcement action against them on multiple occasions in recent years for environmental permitting regulations (EPR) offences.”
It is in part on the back of such cases that the ASA has decided to produce new claims guidance. The watchdog appealed to companies not to worry themselves into greenhushing, but the risk of making green claims is only likely to grow given that claimant lawyers are also bringing climate litigation. “Consumer litigation over misleading advertising tied to ESG-related claims is increasing,” explained Ernst & Young expert Chandan Sarkar in May. “Everything from sustainable packaging to carbon-cutting claims are under the microscope, and courts are allowing the claims to progress to ‘fact discovery’ stage, which is a noteworthy shift.”
Hush puppy
This is a “red hot” area according to Dominic Watkins, partner at law firm DWF, who notes that Nike is currently being sued because its sustainable range is argued to not be so sustainable. It’s never been less safe to shout about sustainability.
