This raises the question of whether consumers and businesses can truly trust these assertions to be well-founded. In 2020, a study by the European Commission revealed that 53% of the environmental claims analysed within the EU were either ambiguous, misleading, or baseless, and 40% lacked proper substantiation.
These changes are not limited to the European Union, beginning in December 2024, the Financial Conduct Authority (FCA) will implement new anti-greenwashing regulations for asset managers. These regulations mandate the use of precise fund labels and demand strategies supported by clear, evidence-based data. Additionally, starting in May 2024, all companies authorised by the FCA must adhere to enhanced marketing standards. This development marks a significant step in the UK's dedication to fostering sustainable finance.
This adds to the mounting pressure on corporates to disclose their carbon emissions, energy usage and supply chain emissions. There will be a narrative change as the EU's Greenwashing law and FCA regulations come into effect which bans "claims that a product has a neutral, reduced or positive impact on the environment because of emissions offsetting schemes", or mandates evidence based data.
Corporates are going to be held accountable for their claims, and with so many new regulations coming and loopholes closing, this is going to happen sooner rather than later.
How can corporates prepare for this?
Firstly by reviewing their current claims. If they claim that they are 100% renewable, this new Greenwashing law will hold them to that claim, with the prospect of fines and penalties to come, as well as being ‘outed’ for their lack of transparency.
Secondly, particularly when it comes to Renewable Energy, corporates need to ensure that they are reporting accurately. Although annual and monthly matched reporting is still permitted under these regulations, there will be more disclosure, with further examination of exactly where they get their energy from, how much is used and what means they use to match their consumption with renewable energy.
Lastly, get ahead of the legislation. The further down the line this legislation gets, the more examination will be happening, by various interested parties, into how corporates are marketing their green claims. Providing more evidence, data and proof of green credentials will give a substantial leg-up for any corporate against its competitors. This is a time of change in reporting carbon emissions, green product credentials and renewable energy usage, and customers are increasingly pushing for transparency and greener products, and they vote with their wallets.
How can corporates manage this transition?
By getting ahead of the game, corporates are putting themselves in pole position to be regarded at the forefront of the sustainability revolution that is already occurring. Any corporates willing to delay, will unfortunately begin to find themselves in increasingly recurrent situations where they are being caught out by both increasing regulation and a customer base that is preferring greener products and solutions.
One of the most effective strategies for corporations to contribute to the decarbonisation of energy systems is to align their energy consumption with renewable energy sources on an hourly basis. This approach, referred to as 24/7 hourly matching, offers a range of advantages. It enhances the transparency of corporate sustainability efforts through more detailed carbon accounting, encourages investment in renewable energy and storage technologies, and plays a significant role in both decarbonising and modernising the power grid. This procurement strategy is not just about reducing carbon footprints; it's a proactive step towards a more sustainable and environmentally responsible corporate future.
Renewabl is on a journey to provide corporates with a platform that easily streamlines reporting, facilitates a more open and transparent marketplace with the ability to match consumption to energy on an hourly basis. Our platform consolidates many of the requirements of corporates in their procurement processes, allowing them to easily provide proof of energy matching and encouraging more granular matching of their energy consumption.
Get in touch with the team at Renewabl to learn more at hello@renewabl.com.