Carbon Accounting: The Future Demise of “Greenwashing” – the practice of marketing one’s company as eco-friendly when it’s not entirely true

Thanks to Hunter from Software Advice for our guest blog today about greenwashing! I didn’t know the term for it before now, but greenwashing is when a company touts itself as being eco-friendly when, in reality, that’s far from the truth. What Hunter’s company is working on is software to track a company’s carbon footprint and hold them accountable for their claims. In his words…

Greenwash (verb, \ˈgrēn-wȯsh\) – to market a product or service by promoting a deceptive or misleading perception of environmental responsibility.

Companies are launching major green marketing campaigns. But many of their claims are misleading or just false. It’s becoming extremely difficult to tell when claims of eco-friendly products are legitimate. “Greenwashing” is eroding the credibility of environmental marketing and making consumers more skeptical than ever.

The U.S. is still a leader in financial accounting (thanks in part to accounting software systems), but we need to develop the environmental accounting to the same level to defeat greenwashers. Enterprise Carbon Accounting (ECA) software is becoming the foundation of this infrastructure, and the market is growing rapidly. ECA software enables companies to consistently track the many components of their carbon footprint while identifying opportunities for cost savings and waste reduction. When the software is fully developed, excuses will wear thin for failing to provide carbon footprint disclosure. The resulting transparency could make greenwashing obsolete.

For ECA software and environmental accounting adoption to drive away greenwashers, we need action in five main categories:

Clear government action on regulations – like increased coverage of the EPA’s Mandatory Greenhouse Gas Reporting Rule, which requires companies that emit 25,000 metric tons or more of greenhouse gases annually to disclose their carbon footprint measurements to the EPA;

Wider adoption of carbon accounting principles – requiring more businesses to disclose their emissions would provide precise measurements of a company’s environmental record – making it much easier to catch the tricksters;

Expansion of Scope 3 emissions standards – mandatory inclusion of suppliers’ emissions in environmental reports (Scope 3) would prevent under-reporting of emissions and more quickly spread adoption of carbon accounting in general, all along the supply chain;

Better green business incentives – using ECA software to identify eco-friendly savings opportunities can make it cheaper to truly go green, making it unneccessary to greenwash in the first place;

Informed consumer decisions – demanding the numbers from standardized carbon accounting reports before purchasing a supposedly green product forces businesses to prove their sincerity with real evidence. It’ll be the death of greenwashing.

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