“Cancel Culture in Climate” by Jenny Morgan

Well, this review certainly had me scratching my head! As you will see there are some very important messages in “Cancel Culture in Climate” by Jenny Morgan for those working on climate change in companies. But also, many ideas I disagree with.

So why has this book been included in my “key books on climate change” if I don’t fully embrace its premise? Well because I think if you are a sustainability practitioner, you should read it.

In my view, this book is fundamentally about failure, the failure of corporations to enact effective policies to reduce their own impact on the climate. As Jenny says:

“Industry is responsible for a substantial portion of global greenhouse gas emissions, and by ‘substantial’ I mean over 24 percent. If you include the transport and buildings sectors, it rises above 43 percent. And if you add in agriculture, then businesses account for the vast majority of global emissions.”

Herein lies the problem. Emissions have been rising. When we signed the Paris Agreement to start limiting emissions in 2015, the CO2 concentration was 399 ppm. Today the concentration is 426 ppm. Some companies are making great efforts but collectively business is far behind where we need them to be.

To understand the causes and solutions we need to go on a journey into the corporate sustainability space with Jenny to explore why companies are not being effective. ?

Jenny’s core message is that folks who are concerned about climate change spend far too much time and energy fighting each other over the details and strategies to employ, and that it is cancel culture that impedes progress.

“Right now, we are fighting in climate, when we need to be fighting for climate. We are at risk of doing the climate deniers’ and super polluters’ bidding. They want to maintain the status quo and delay the transition to a net zero society indefinitely. We, through internal fighting, are adding to that delay.”

The thesis of “Cancel Culture in Climate” is that overt criticism of corporate performance inhibits action and leads to “fearful decision making”:

“Cancel culture creates fear and the climate space is plagued by leaders displaying fear-based decision-making. Inefficiencies in climate leadership stem from fear of imperfection or public scrutiny, both of which we do not have time for in the twenty-first century of climate determination. What I call “climate retreating” or “greenrecanting” due to fear is happening right now. The world is watching as influential Fortune 500 companies remove themselves from climate-focused coalitions. In early 2024, J.P. Morgan, a multinational leader in the finance industry, left the Climate Action 100+ initiative, the world’s largest voluntary investor initiative focused on climate change. And in June 2024, the Financial Times reported that Unilever, Bank of America, and Shell ‘have in the past year dropped or missed goals to cut emissions or to shrink ties with the most polluting sectors. While some companies have missed goals, others have simply skipped over their promises to improve’.”

I have a very different diagnosis, which is different from saying that Jenny’s insights are without merit, because they are very helpful.

In my view it is the marginalisation of the sustainability function and the subsequent adoption of false solutions within organisations which that caused the inadequate response to date by many companies, and the valid criticism that ensued.

These in turn could be said to arise from a failure to align climate action with value and the failure to adopt appropriate processes of change to drive effective, value-enhancing climate action in companies.

The business failure on climate is serious. It is a result of the power structures, incentives and culture in modern corporations, and their resistance to change. We need a much deeper set of interventions, than simply a call to civility in the public discourse, IMHO. ?Not is it time for incrementalism, where any small actions are celebrated, it is time for companies to be much bolder.

On this notion of cancel culture, I feel that the way to avoid criticism from climate concerned folks is not to decry or suppress the criticism – as if that would ever be feasible – but for companies to adopt approaches that actually deliver change at the quantum and speed required. In other words, to avoid criticism, do the right thing and stop doing the wrong things! Simple!

That’s not to say that there isn’t room for a lot more nuanced conversations and kindness – especially towards sustainability practitioners in companies who are often doing an impossible job, as we shall see.

On the retreat by big US corporates from a public engagement on climate action this is almost certainly more a response to the current anti-ESG, anti-woke political milieu than to criticism by climate-concerned folks. In my view, the principal driver of “greenrecanting” is the venomous anti-ESG regulations from folks like Governor Ron DeSantis in Florida and the pronouncements of Trump and his entourage. As the Guardian [g] recently noted, that process is accelerating:

“The six biggest banks in the US have all quit the global banking industry’s net zero target-setting group, with the imminent inauguration of Donald Trump as president expected to bring political backlash against climate action.”

Now folks might think that because I have a different point of view than Jenny that I will be saying “don’t read this book”. That is absolutely not the case: please do buy and read this book but read it critically.

Jenny has done something very important and stuck her head up above the parapet to initiate a discussion about the nature of discourse around corporate climate performance and the impact that has. This is a subject that I have not seen discussed elsewhere, so bravo to her!

Sustainability practitioners and climate concerned agitators for change will each gain useful insights and ideas from this book. The latter category of reader will benefit from to understanding the strictures faced by practitioners in companies, who are frequently forced into compromise, partial solutions and uncontroversial positions, through no fault of their own. ?

I should also point out that this is a very quick read. The 163 pages in the pre-publication version Jenny sent me, are set in a large typeface and the writing style is very readable. It took me just one morning to read, including my annotations for this review and looking up some of the references provided (of which there are 85). ?

The corporate sustainability space

This is my first proper sojourn into the corporate sustainability space if you ignore my relatively brief earlier review of "Leading Change Towards Sustainability" by Bob Doppelt [h].

This is a space which I understand very well, having worked as a climate change and sustainability consultant since 1991 in very senior roles for leading consulting businesses like March/Enviros, RPS, ERM and latterly in my own boutique consulting firm, SustainSuccess.

In those roles I advised and implemented programs for hundreds of clients on sustainability and climate change such as BP, Unilever, Jaguar, Roche, Hilton International, Rio Tinto, Petrom, BAT, several of US and Canadian energy companies like Enbridge and EGroup, and other institutions like the World Bank and NHS, and many others too numerous to mention. These projects were predominantly in the UK, Europe, North America and the Middle East.

I was also a Director of Sustainability for eight years between 2008 and 2016 in a property and infrastructure business, Peel Holdings, with assets of US$ 10 billion spanning commercial property, retail, media, airports and ports, energy generation and land.

Let me start by saying that corporate sustainability is a tough space to operate in and a tough space to drive change in. I know, I’ve got the grey hairs to prove it! So, I am delighted that Jenny has given me the excuse to talk about this important subject.

I also recognise the minefield that external communication on the environment represents. At Peel Holding the Main Board Director I reported to, David Glover, and I took the view that we would make no public pronouncements about our environmental performance which we couldn’t 100% support with solid evidence. It could be summed up as:

“We won’t talk about what we PLAN to do, we will only talk about what we can PROVE WE HAVE DONE”.

That Northern English, Yorkshire/Lancashire taciturn approach was very helpful. It gave Peel a focus on measurable outcomes, a desire for external validation and for the use of standards. With David and Board’s backing Peel achieved some very significant results. Peel was the first large UK property company to be independently certified to the ISO 50001 energy management standard in 2015; the top-ranked property business of 24 independently rated by the Carbon Trust Standard in 2011; one of 2 UK pilot sites for BREEAM Communities in 2012. Everything was measurements-based.

We adopted a technique called Energy Monitoring & Targeting to reduce energy use by over 3% a year every year for the seven years I remained involved. The number of improvement projects being identified, investigated, financed and completed were reviewed quarterly in an Opportunities Database, and the Energy Champions and FM contractors were empowered to deliver this process continuous improvement.

But there were some things Peel didn’t do. Around the mid 2010’s, when “100% renewable electricity contracts” were being widely promoted as a way to “show commitment to the environment” Peel firmly refused to participate – recognising them as greenwashing.

False solutions

The reason these “green electricity” contracts are a problem is because they lack additionality since the subsidies needed at the time were not being paid for through the green contract but by all electricity users. So, the green generation would happen regardless of the contract. Additionality is a is a fundamental principle when making any environmental claim – it is a test of truthfulness. Basically, if you are claiming an environmental improvement, it must have been because of your actions, i.e. it wouldn’t have happened without your involvement.

Even though the electricity in the “green contract” was accompanied by a Renewable Electricity Guarantee of Origin certificate, a REGO, the fact is that the investment needed was paid for by a completely different levy on all electricity users and had nothing to do with the contract.

At the time Peel was operating the England’s largest onshore windfarm at Scout Moor and producing loads of the REGO certificates, but David and the Board accepted my advice about the indefensibility of claims using REGOS and the reputational risks that could arise.

As Jenny demonstrates, there is huge pressure for Sustainability folks in companies to do something to signal action on climate change. The insidious nature of the “green electricity” proposition is that it plays to the relative powerlessness of corporate sustainability practitioners. The process of changing the electricity contract (often at no additional cost) is much easier to “sell” internally than an energy efficiency programme to systematically drive down electricity use over many years.

I had been alerted to the scam that REGO-backed electricity contracts are by the proud boasts of a Sustainability Director in a major UK Plc who claimed that their use of green electricity contracts and the REGOs that were bundled in, allowed them to report an 80% reduction in emissions, at virtually no cost. This Plc was part of the RE100 group which lobbied the WBCD and WRI to change the rules of the Greenhouse Gas Protocol in 2015 to allow “certificate-based market reporting without offset additionality”. ?

Jenny would disapprove of me using the word “scam” to describe green tariffs. That is finger-pointing and counter-productive.

“In this book, I will show how we can learn to hold others accountable to produce the results we want without having to use shame as a primary tool. We have a real chance to enforce accountability and inspire action in the climate space without cancel culture. We have an opportunity to not go down the same path experienced in other movements. We can proactively avoid the known pitfalls and delays that cancel culture creates in the climate movement. This is the opportunity where we can improve and evolve past the finger pointing. When we spend less time pointing fingers, we spend more time creating monumental change.”

Here lies one of my points of divergence - there are genuinely bad actors out there in the world of corporate sustainability and they need to be held to account, and shaming is an appropriate tool IMHO.

Maybe in 2015 sustainability practitioners didn’t understand the subtleties of additionality and false claims, but today these are widely known, and I would expect any professional sustainability practitioner to refuse to use these, if only to protect their organisation from the reputational damage that Jenny is highlighting.

If we as professionals, with the detailed knowledge of the nuances behind individual climate actions can’t criticise, then who can? If only enough folks in the sustainability community had kicked back at the WBCSD and WRI who amended the Greenhouse Gas Protocol in 2015, we wouldn’t have had a decade of companies all over the world using these phoney certificates, to claim action on the climate, while actually doing nothing.

Indeed, this false solution has caused damage to decarbonisation. RECS, the US equivalent, and REGOS have starved energy efficiency of the funding it needs and has led to greater emissions. I know because I have seen several organisation pivot away from energy efficiency, which can be hard to do and requires investment and persistence, to change their electricity contract at zero or minimal additional costs and declare victory. (For more on the several failures of the GHG Protocol you can read my long article at [a]).

So, let’s look at what else Jenny’s book reveals about corporate sustainability and explore the role/effect/manner of criticism in shaping action.

The “sustainability as image” trap

One of the main reasons that corporate action on the climate is a mess is that it often isn’t treated as an operational issue requiring a range of technical and procedural changes, but rather as a subset of Corporate Affairs, Public Relations and Marketing.

Sustainability is frequently seen as a perception or image challenge, rather than a fundamental business design and operation issue. It is recognised as something that underpins every company’s unwritten “social license to operate” but executives frequently fail to grasp that the only ultimate measure of success is reducing the impact of operations, something that cannot be fixed by glossy brochures or fancy PR.

The problem is that you if you are a Sustainability Director and you can meet the demands from the Board to be seen to be acting on the climate, and someone sells you the idea that you can do that with a simple electricity contract change, why wouldn’t you? Tick the job done box and move on. This example reflects the lack of authority and poor Mandate that many sustainability practitioners have, as well as a lack of technical understanding in some cases.

I am ashamed to say that many consulting firms are promoting easy fixes not the transformation that is needed. Of course that is a totally bogus proposition, since transformation is inevitable as the real-world situation worsens, it’s mainly a question of whether we want to manage it or have it happen to us in a chaotic fashion. But a consultant selling a program of advice and support in the next six months is highly unlikely to point out their client that what they are proposing is largely ineffectual, may be positively harmful in the long run, and is frowned upon by many professionals.

One of the reasons I left the big consulting firms I worked for is that some of the Partners were actively advocating those quick fix non-solutions. Heck, on one occasion when I was due to meet Exxon in Houston to discuss a major energy efficiency program, I was ordered by two of the partners separately not to use the words “climate change”. I don’t know of that request arose from Exxon or the Consulting firm, but it is a small insight into the inability of some consultancies to challenge clients.

Jenny starts her book recalling when she was working in an advocacy team at Microsoft in the lead up to the IPCC Conference of the Parties 26 (COP26) in Glasgow in 2021. She was proud to be involved in preparing a blog about Microsoft’s achievements in the lead up to the conference. But the conference itself broke down with China and India watering down key commitments on coal. I should point out that the US was also heavily implicated in that outcome, not mentioned by Jenny, but covered in my last book review “The Language of Climate Politics” by Genevieve Guenther, PhD [b].

There was, quite rightly an outcry at the last-minute failure of the COP26:

“Caught in this crossfire were the private sector organizations closely tied to COP; Microsoft very much included. We were publicly criticized like never before. Our efforts were perceived by many as an attempt to embellish or greenwash, and critics attempted to shame the organization for even participating at COP. Where I had naively expected praise, the comment sections were littered with criticism. In hindsight, some of the criticism was valid. This was the time for big tech leaders to make bold emissions pledges. Perhaps they should refuse to fly and switch to remote meetings (this was, after all, the company that gave the world Teams!). Suddenly, an event booth made from linseed-derived materials wasn’t going to cut it amongst the networking drinks and airplane fumes.

But some of the criticism was less valid—much of the work by the sustainability team for that event was cutting edge and industry-leading. But all of that was erased, as if the work leading up to COP26 had never happened. And the learnings—both of innovations and honest mistakes—were lost along with it. My blog, and our team’s presumably positive efforts, had been cancelled. And that cancellation hadn’t helped anyone, it had simply left a void. As my sustainability career eventually recovered, I began to notice these black holes all over the climate space, and wondered about the opportunities, talent, and time lost.”

I can imagine what a shock that must have been for Jenny. Here is someone motivated by idealism, trying to do the right thing and the corporate machine is in full lockdown. Having been on the inside, I know exactly what it is like when a company receives criticisms about its actions – there is a tendency to “batten down the hatches” and the scars often lead to a reluctance to make any pronouncements about issues like climate change – so-called greenhushing. ?

Indeed, I shared my own “Jenny moment” when a very large decarbonisation program I was helping to lead in BP’s petrochemicals assets was abruptly pulled, despite achieving considerable success. Why? Because BP killed 15 workers in a big explosion at their Texas City refinery in March 2005 and the entire HSE organisation pivoted away from reducing emissions to reducing deaths – not unreasonable, although I unsuccessfully argued at the time that an organisation like BP should be able to do both! No, the corporate machine demanded that the public and regulators needed to see that a total focus on safety was taking place, no matter what.

So, I can understand the hurt and disappointment Jenny felt. By the way, there is more on the BP story in my textbook on energy and resource efficiency, which is free to download [d].

Jenny blames others in the environmental movement for effectively cancelling Microsoft at COP26 and she sees this as systematic problem:

“Those in the environmental impact field hold the same vision and values: fighting climate change. Yet we fight each other instead.”

“The urgency to address climate change is clear, as are the risks that will escalate without swift action. We need everyone to join this cause. Yet a malignant and growing lack of trust in one another has caused a great divide. This polarization leads to a heightened state of antagonism that dooms us all to a never-ending cycle of anger and hopeless inaction. This cycle will repeat ad nauseum unless we do something about it.”

It may well have been the case that Microsoft’s abrupt decision to retrench its climate position was driven by external critique, especially from better-informed folks in environmental NGOs etc. Microsoft had been promoting some zombie technologies like Direct Air Capture, which were bound to create criticism.

But Microsoft’s response, I believe, is symptomatic of a deeper problem, which cannot be blamed on external critics but lies in the company itself. Microsoft’s reaction was typical of a business that sees climate action as a perception or image issue. If they had properly grasped the nettle of sustainability, they would have understood that dealing with their climate impact was a decadal program of analysis and transformation, and that the events at COP26 reflected society’s changing expectations rather than a repudiation of their need to act.

Herein lies the real challenge with corporate sustainability. It is often perceived as a “nice to have” rather than a “must do”. The folks leading it rarely have the clout or seniority to drive deep change, so are constantly responding to external stimuli like new regulations or supply chain pressures or media items. If a quick fix comes along, they are bound to grasp it. Folks in that role often operate in reactive mode, not strategically, so are prone to bend according to which way the wind is blowing. And most sustainability functions are chronically under-resourced and can be overwhelmed just to meet compliance and reporting requirements.

Those issues, IMHO, are the root cause of poor corporate climate performance, not the debate amongst practitioners.

I suspect that the external messaging which does most to undermine climate action is not the words of the “angry climate concerned activists” heckling unhelpfully from the outside, but the ratings agencies and fund managers who are insisting on an absolute focus on the next quarter’s profits and the remuneration committees which provide ?Directors with short-term share options to ensure a total focus on the share prices. Those are the voices which drown out climate action (see my review of “The Shareholder Value Myth” by Lynn Stout for more on this subject [e]).

The nature of debate

Jenny quotes Hannah Ritchie the lead researcher at Our World in Data, in her article “Why Climate Tribalism Only Helps the Deniers” [c]:

“The answer to almost every climate dilemma is ‘We need both.’ We need renewables and nuclear energy, even if that means just keeping our existing nuclear plants online. We need to tackle fossil fuels and our food system… we need to be more generous when dealing with our rivals. Intellectual disagreements can quickly descend into name-calling. Real conversation stops and we talk past one another instead.

We become more focused on winning the argument than understanding the other side. This makes the climate solution space hostile, which is counterproductive considering we want the world’s best minds to be there.”

In Hanna’s original article she expands on the points above to make a further, important statement:

“….we need to be honest about what is and isn’t true about the solutions we don’t like… ‘Nuclear energy is unsafe’ is wrong – it’s thousands of times safer than the coal we’re trying to replace, and just as safe as renewables. It’s fine to advocate for your preferred solutions, but it’s not OK to lie about the alternatives to make your point.”

Climate Change is what is called a wicked problem, which means that there are multiple, sometimes contradictory, solutions, each of which have cost and impacts for different groups. We have seen from my last review of “The Language of Climate Politics” [b] that there are a number of zombie technologies out there like CCS, Hydrogen as a fuel and Direct Air Capture that are actively being promoted by fossil fuels interest because they slow the transition away from burning fossil fuels.

While claiming nuclear power is less safe than coal is probably untrue, it is absolute acceptable to point out that nuclear power is expensive, is invariably completed late, impossible to scale due to a limited supply chain and fuel, raises proliferation issues and leaves behind a waste legacy that has not yet been solved. Nuclear power may have a role in our dash to decarbonise by 2050, but at the margins. Maybe later it can prove viable but for now it is largely a distraction.

Of course, those points should be made respectfully and constructively. But we must not fall into the trap of remaining silent under the misapprehension that “all views are equal” or “we mustn’t pick winners”. ?Some ideas out there are simply wrong, like the green electricity tariffs or the zombie technologies and must be called out, robustly if politely doesn’t work.

The allure of offsets

Another false solution is offsets, around which there is a huge amount of debate.

An offset is an action that a company pays for which reduces CO2 emissions elsewhere. An example would be paying to plant some trees, or investing in efficient lighting in a poor country, or restoring peatlands. Project developers identify these projects, get them verified by a certification body like the Verified Carbon Standard, or the Gold Standard. Once emissions have been verified, the carbon “credits” are then sold to companies that want to use them to offset the emissions that they are producing. This entire set-up is known as the Voluntary Carbon Market, VCM. The average price of a credit in 2023 was $6.53 [f]. The VCM was US$723 million dollars in 2023, down from a peak of U$2.1 billion 2021[f].

There is another carbon market, the Compliance Carbon Market, by far the largest of which is the EU Emissions Trading Scheme (EU-ETS). In this market large emitters, like power stations or cement factories, are forced to buy these allowances from a diminishing pool to match their annual emissions. If they fail to do so there is a substantial fine, which costs more than the credits in the first place. Since the pool of credits is going down, they tend to get more expensive and today trade at around €70 a tonne of CO2. The EU-ETS market alone was €881 billion in 2023, and the total compliance market is estimated to exceed €1 trillion.

In the compliance market, because the allowances are obligatory, each company will be considering whether it is cheaper to reduce their emissions through efficiency or other measures than it is to buy the allowances. In theory any actions that deliver savings for less than €70 per tonne of CO2 should be approved, but in practice, because those projects also often involve additional savings like reduced fuel costs, and the savings action can often deliver a permanent reduction, the potential investment case is considerably higher.

The most deep-seated issue with the voluntary carbon market is that it presupposes that an organisation can buy credits instead of making emissions reductions in its operations. Just like the RECS/REGOS could be used to turn the electricity a company uses to zero emissions electricity, offsets can be used to claim a business or product is “net zero” emissions since the actual emissions are cancelled out by the negative emissions represented by the credits.

Proponents argue that the projects that are being supported by the purchase of credits wouldn’t happen if it wasn’t for the VCM and so we should embrace this additional source of climate action.

However, there fundamental problems.

First is the idea that we can have EITHER corporate emissions reductions OR ecosystems restoration. But the reality is that all the decarbonisation trajectories envisaged by climate modellers requires us to do BOTH. We need to get corporate emissions down to virtually zero AND we need to repair ecosystems and carbon sinks at scale. These are NOT interchangeable.

Second, is the idea that the VCM is the best and most efficient way to deliver improvements to biodiversity etc. The evidence is mounting that the VCM is deeply flawed, and that the reform needed to enable it to have a meaningful impact is improbable for a number of deep-seated reasons.

Then there are the incentives to game the system. Wherever there are opportunities to make money, there is the potential for problems. I recall back in 2010 the first of the Kyoto Protocol Clean Development Movement credits, designed to transfer funds from high-emissions countries to developing countries. On that occasion there were multiple examples of a lack of additionality and even worse, fraud like the Chinese company which increased its SF6 emissions (a powerful greenhouse gas) specifically with the intention of gaining credits by later cutting them. More recently many of the VCM credits have been called into question, as in this paper in the prestigious journal nature [k]:

“The analysis covers one-fifth of the credit volume issued to date, almost 1 billion tons of CO2e. We estimate that less than 16% of the carbon credits issued to the investigated projects constitute real emission reductions, with 11% for cookstoves, 16% for SF6?destruction, 25% for avoided deforestation, 68% for HFC-23 abatement, and no statistically significant emission reductions from wind power and improved forest management projects.?“

There have also been scandals about the lack of transparency and the very high intermediation costs (the money kept by developers, verifiers brokers etc), such as that involving South Pole, a carbon credits developer and broker. The New Yorker wrote a fascinating long-form article called “the great cash for carbon hustle” [i] detailing the origins of South Pole and the scandal that embraced it when scientists challenged the effectiveness of a forestry project, Kariba in Zimbabwe and transparency activist started to question where the money was going.

According to the Guardian [j]: ?

“Much of the €100m revenue generated by Kariba has been carved off along the way by the project developers in fees and expenses: €86m went into costs and profits assigned to the broker and technical lead South Pole and to the project coordinator Carbon Green Investments. In the end, only a maximum of €14m went to Kariba’s communities through cash transfers and infrastructure improvements.“

and..

“South Pole – which was not involved in providing any services on the ground – made €18m (￡15m) profit, according to its figures, since deleted from its website – more than was spent on Kariba itself. The Swiss firm deducted €24m in costs before sending €57m to Wentzel [Steve Wentzel, the Zimbabwean entrepreneur who owns land for the Kariba project and owns Carbon Green Investments, the company responsible for distributing the funds] for his 30% share of revenue, project costs and local communities.”

and

“Nature-based carbon markets have largely been co-opted by groups affectionately known in the industry as ‘carbon cowboys’. These groups spent much of the last 15 years snapping up and enrolling large tracts of land in the developing world, with little care for Indigenous rights governing these areas, or ensuring that local inhabitants get paid for their conservation work,” says Elias Ayrey, a remote-sensing forest scientist who runs Renoster, a company that reviews the quality of carbon projects, and who publicly raised concerns about the project a year ago.”

These high intermediation costs make the VCM highly inefficient. So when Jenny says;

“Carbon markets have already provided billions of dollars towards curbing climate change, so why not make it even more effective? I think they call that a win-win in the business world”

We need to ask ourselves how much of that money really ends up on the ground? The VCM is definitely a “win-win” since the company buying the credits can claim action on the climate or gain good PR while the companies taking the fees are quite happy too! Not so sure about the project beneficiaries, though.

Jenny provides some very weak evidence in support of the VCM’s positive effect:

“Sylvera, a climate project rating agency, conducted a study of over a hundred of the largest businesses, across multiple industries, from 2013 to 2021. They split the businesses into two groups, which consisted of half that had purchased carbon credits and half that did not. The companies that had purchased offsets decreased their annual emissions by 6.2 percent per year. The companies that did not purchase offsets decreased their annual emissions by 3.4 percent per year. These figures represent reductions in actual emissions, not net emissions, meaning that a company’s use of carbon credits did not impact these numbers” [l]

I checked out that reference. First of all, Sylvera is a carbon credits analytics company, so they are interested in the markets being perceived positively, so a possible source of bias. The actual list of the 51 companies buying the credits is not known but one obvious question to ask is “how were these selected?”. There could have been a predominance of Aviation and Oil and Gas companies which recently have had regulatory pressures to reduce emissions and where larger percentage emissions reductions are easier. Or maybe they were selected to get the right answer? We just don’t know.

Furthermore, the decarbonisation figures have included market-based scope 2 emissions, the very same emissions that can be easily cancelled out using those “green electricity” certificates. As we will see in my P&G case study later, it is quite common for companies using cheap offsets to also use green electricity credits to report lower emissions. They are two aspects of the same attitude towards climate action. Is that what is happening in this sample? Are we simply seeing the confluence of two cheap image enhancement mechanisms at work?

Finally, we should recognise that even if there is a correlation, that does not imply causation. Nope, the Sylvera report is incredibly weak evidence, and I would certainly never quote it.

So, let’s look at an up-to-date paper that has done the analysis properly and published in a peer review journal [m], which concludes (my emphasis):

“While industry reports claim that credit purchasers decarbonise faster, rigorous evidence is missing. Here, we provide an in-depth analysis of 89 multinational companies’ historical emissions reductions and climate target ambitions. Based on self-reported sustainability data and more than 400 sustainability reports, we find no significant difference between companies that purchased credits and those that did not. Voluntary offsetting is not a central part of most companies’ climate strategies, and many pass these credits' costs and purchase decisions directly onto their customers. While the companies within our sample retired 1/4th of all carbon credits in 2022, the top five offsetters' expenditures on voluntary emission offsetting are, on average, only 1 percent relative to their capital expenditures. For most companies, carbon credits are, therefore, unlikely to crowd out internal decarbonisation measures. Yet, we document that for large-scale offsetters like Delta Air Lines or easyJet, carbon credit purchases competed with financing internal decarbonisation efforts.”

It's exactly the same issue as with the green electricity credits. When many companies are given a cheap way to declare lower emissions, they will use it. Yet again we have a supposed tool for corporate climate action which effectively impedes decarbonisation, at least in some sectors.

If companies do want to take external action to reduce emissions, there is nothing to stop companies buying and then retiring EU-ETS Allowances from the Compliance Carbon Market. This is a much more tightly controlled, credible and regulated carbon market which Jenny says is proving effective:

“According to Imperial College, London, the EU’s Emissions Trading System carbon market—whereby firms buy a tradeable permit per metric ton of carbon—prompted an overall 14 to 16 percent fall in emissions over an eight-year period. This is equivalent to a reduction of 5.4 million metric tons of carbon each year without hindering the participating firms’ profits or performance.”

Please don’t be confused here. The effectiveness of the compliance market is NOT evidence of the effectiveness of the VCM. They are quite different things.

So, given that the EU-ETS works so well, why don’t companies buy EU-ETS credits and retire them? There is nothing to stop them doing that.

The simple answer is very few do because EU-ETS credits are too expensive. Companies want cheap credits. Which brings us to another yet another problem with the VCM: it is in pursuit of the cheapest possible credits, not those projects that have the biggest social or environmental benefits. The less the credits costs, the better.

Jenny recognises the problems in the VCM, but criticises the critics and comes out robustly defending some of those responsible for the mess, like the carbon verification agencies:

“Organizations that falsify their climate impact claims should be held accountable, but cancel culture is ineffective in achieving this. The media attention surrounding Verra and South Pole has significantly cooled the carbon market, particularly for nature-based solutions and broader climate projects.

Many of these projects, despite being transparent and accountable, have been unfairly impacted as innocent bystanders. Yet, cancel culture remains unsatisfied and continues to spread. The campaign against registries and nature-based solutions has led to several repercussions, including damaging credibility and trust in carbon offsetting initiatives and environmental certification organizations overall”

But is it correct to call for the end of the VCM, as I and many others do? ?Jenny doesn’t think so:

“There are many groups and individuals who believe that carbon credits should be cancelled or phased out in favor of more direct and comprehensive approaches to reducing emissions, such as regulations, carbon taxes, and investments in clean energy technologies. These critics often argue that carbon credits do not address the root causes of climate change and may perpetuate inequalities by allowing wealthy individuals and corporations to purchase offsets while vulnerable communities bear the brunt of environmental impacts. They think this mechanism won’t get us to where we need to be to combat climate change, so they opt to cancel it versus improve upon it.”

I think we can only improve on the VCM by replacing it with something completely different. So yes, I am a recommending we “cancel” the VCM for the following reasons:

1. Companies cannot be allowed to delay their own emissions reductions by funding projects elsewhere. Decarbonisation requires that we do BOTH.
2. In the two decades since the Kyoto CDM started in 2006, we have had numerous examples of fraud and misrepresentation in the voluntary carbon markets. Multiple efforts at reform have failed, and simply add to the intermediation cost
3. The pursuit of the cheapest possible credits means that developers chase those projects with the lowest costs, not necessarily those that local folks would prioritise. Placing developing communities into a position to seek handouts from corporations in order to achieve their nature or energy transition goals is a modern form of colonialism, enabling the Global North to dictate to the South what projects merit support.

I would replace the VCM by a multilateral institution like the World Food Program (WFP). That institution would provide the validation and verification of projects which governments in the Global South submit for support. Some of the funds could come from the Paris Agreement carbon trading mechanism that allows governments to trade amongst each other to achieve their Nationally Determined Contributions (target emissions reductions). Other funds could come from mandated contributions from those countries and companies which have been historically the largest emitters. Those companies should not use those contributions to negate emissions – these should be seen as levies for historical harm.

Frankly not only has the VCM enabled companies to defer decarbonisation, but it has also been used by polluting countries in the Global North to avoid their historical responsibility for their emissions and provide proper mitigation, adaptation, restoration and loss and damage payments. They claim that the VCM will fund those costs, so why should they?

If companies want to make voluntary contributions towards nature improvements that is to be celebrated and encouraged. What is wrong is when that becomes an accounting tool either avoid emissions or project a false narrative about the organisation’s own performance.

By way of comparison the WFP disbursed around $9 billion in 2024 ($14 bn in 2022). It does so in extremely challenging locations all over the world, efficiently and with the full participation of the recipient countries. Donors have oversight of the funds.

Making P&G Accountable

Thanks to Jenny we can glimpse the drivers and viewpoints of those working in corporate sustainability. Their aim is to have a positive impact, but the outcome is frequently ineffectual at best, or outright misleading at worst.

I have seen the genuine passion and dedication and drive to do good that many sustainability practitioners bring to their job, and I have also seen many of them become cynical, anxious and depressed as their ideals come into conflict with the indifference of many of their bosses.

Jenny is right to point out that external criticism is hard, sometimes unfair – after all the person involved is doing their best even if their organisation isn’t giving them the leeway they need. We DO need to find a better way.

Before we get to the solution to this problem – which is obvious by the way – let’s look at the case of P&G the world’s largest consumer goods company, headquartered in the US. About three years ago they announced their “Climate Transition Action Plan” showing how they can achieve net zero emissions by 2040 [n].

There are three claims that I will focus on in this roadmap, highlighted in red in the illustration above.

1: “Reduced Operation emissions 52% (against a 2010 baseline)”

If we dig into the numbers, that 52% emissions reductions seem to have been primarily delivered though the purchase of “green electricity” – see point 3 for more on this.

In terms of underlying reduction in energy use, there is a stated efficiency per unit of production improvement of 19% between 2010 and 2020, a compound annual improvement of only 1.75% per year. Folks knowledgeable of manufacturing could characterise this as a relatively unambitious improvement program based on easily achieved efficiency gains arising from natural capital replacement cycles and external standards and innovation (e.g. LED lighting improvement) rather than profound internal effort.

Indeed, it may be the case that underlying efficiency increased even less, if production volumes increased over that period, since the fixed baseload energy use would have been spread over greater production, thus making the per-unit figure lower. Never trust a “per-unit” figure! The only P&G factory I can see which have implemented ISO 50001 for energy management is in Germany where there are considerable tax breaks for certification - I would recommend P&G demonstrates its commitment to continuous improvement by implementing ISO 50001 globally and setting absolute targets for demand reduction on energy use (separate from location-based electricity emissions which may arise from grid-decarbonisation rather than in-house efforts).

2: “Reduce Operations emissions, balance remaining emissions via natural climate solutions (by 2030)”

Not only is this a vapid statement without a specific numeric target, but it suggests that offsets, aka “natural climate solutions”, are part of the plan, which brings us back to all the issues with the VCM and the pressure to use cheap offsets rather than spend the $’s needed to actually reduce emissions.

3: “Purchase 100% renewable electricity in global operations by 2030, already at 97%”

This is, of course, our green electricity issue that I described earlier. ?Like many companies, P&G provides detailed data on its emission as part of its CDP report [15], which is publicly available. The CDP – formerly the Carbon Disclosure Project - requires that organization specify the sourcing method for their Scope 2 market-based supplies (i.e. electricity) in response to question 8.2e.

What this table is telling us is that approximately 78% of P&G’s zero/low emissions claims are based on buying REGOs, RECs and I-RECs. Since these are “unbundled”, the actual electricity they bought could have come from any source including coal-fired power station. These certificates don’t show additionality, i.e they were not sufficient on their own to enable the renewable generation to happen. The remaining 22% of electricity may or may not have been additional as the Power Purchase Agreement could be based on a supply that is receiving public subsidy, so the proportion that demonstrates additionality, is probably at best, 22%.

So, we have a stated emissions reduction of 52% which is largely due to buying cheap green electricity credits and may also be due to a very modest amount of internal effort to reduce energy use, but we are not given the data to verify that. Looking forwards we have an unstated further emissions reduction goal which will include offsets. The fact that the main driver for improvement has been renewable energy certificates is very concerning but would not be apparent to the casual reader. The “appear to take action” box has been ticked!

This use of green energy certificates seems to be quite a widespread problem, according to a paper “Renewable energy certificates threaten the integrity of corporate science-based targets” by Anders Bjorn and his colleagues [p]:

“Our study shows that the common voluntary corporate practice of using RECs that are unlikely to drive additional renewable energy production casts serious doubt on the veracity of reported corporate emission trajectories and their apparent alignment with the most ambitious Paris Agreement temperature goal.”

Jenny cites a survey by “The Transparency Index 2024” [q] which looks at the social media messaging on LinkedIn and X and compares that with formal disclosures made by the company:

“The Transparency Index 2024, published by Connected Impact and Ringer Sciences, reviewed over 600,000 external communications from 200 large U.S. companies to identify the ‘transparency gaps’ between what businesses communicate about ESG topics and what they factually disclose. The findings reveal that only 2 percent of US companies ‘over-promoted’—or greenwashed—their ESG progress. But a whopping 58 percent took the opposite route, ‘under-promoting’ their performance and factual disclosures. They were greenhushing ‘to avoid scrutiny and allegations of greenwashing’ despite, as the same study had shown, greenwashing being prevalent amongst a very small percentage. The perceived problem, then, is far more dangerous—and action inhibiting—than the reality”

But that isn’t the correct conclusion. All it shows is that companies were consistent in their messaging across social media and their formal disclosures.

The Transparency Index says greenwashing:

“…includes presenting an inaccurate picture of activities by overstating positive improvements and understating more negative elements of the business.”

On that basis, I would argue that the P&G Action Plan is greenwashing, because is creates a perception in the reader of better performance than is factually the case: e.g. the “Reduced Operation emissions 52%” statement. The verb “reduced” suggests that this was an action by P&G, when the majority of the reduction came from using REC/REGO/I-RECs which have not created the renewable generation. P&G is claiming emissions reductions it was not responsible for creating in the first place.

In fact my previous consulting firm ERM carried out a survey that indicates that a staggering 68% of US corporate leaders admit to engaging in greenwashing practices [r]. The problem is so severe that there have been considerable regulatory requirements introduced to combat the torrent of misleading practices. In Europe we have the EU Green Claims Directive, in Canada we have C-59, in the US the ESG Enforcement Taskforce has been set up by the FTC and SEC. ?

It comes back to perennial image over action problem. ?

The solution

Frankly corporate decarbonisation efforts are a mess. We have a few companies making great efforts and others relying on smoke and mirrors to appear to be acting. The fact that global emissions are rising has to be put down to business to some degree.

So, what is the solution? Jenny suggests that:

“We need to find a shade of green that everyone can buy into, and not shoot people down every time they pull up short.”

She also goes on to say that we need to replace cancel culture with accountability.

“We should hold everyone accountable for their actions because we can’t turn a blind eye in the middle of the era when our actions will change the course of history. But accountability tactics and shame tactics are vastly different in their application and effectiveness.

Accountability is rooted in the intention to hold entities responsible for their actions, decisions, and behaviors. The primary objective is to promote responsibility and ethical behavior to achieve our common goal of climate security.”

On this I agree: P&G’s management – not their sustainability practitioners – need to be held accountable for relying on discredited renewable electricity credits and for incorporating offsets into their future emissions plans. They need to be much more transparent about what they have actually achieved and what they plan to achieve.

I said that there is a simple solution to cancel culture: that is for companies to stop using devices to appear to be acting on emissions and actually start to deliver the quantum of emissions reductions needed.

If companies don’t want to be criticised, they shouldn’t do stuff that opens them up to criticism, or, better put, they should do what society expects of them when facing a monumental shared risk which many members of society are already addressing in their own actions and paying for through their own taxes.

So, the solution for P&G management is to set out a credible strategy with:

1. No renewable electricity credits. If you claim your electricity is from renewable sources, then you have to prove you paid for that generation yourself not “free ride” on others.
2. No offsets. The Science Based Targets institute do not allow any offsets in a company’s interim goals, and 5% at most at the final netzero date. That is the benchmark to follow.
3. Transparency. Folks need to be able to see if your absolute operational emissions are rising or falling, not a per-unit figure. They need to know where you are improving and where you aren’t.
4. Commitment to continuous improvement: you need to reduce your absolute emissions by 4.7% per annum as a minimum ?every year for a decade or two. One way to show that is to have the processes (e.g. ISO 50001) to achieve that, as well as the budget and personnel.

In Jenny’s method, Accountability has the following characteristics:

• Positive Outcomes: The final product is something positive and adds additional value to the cause.
• Transparency and Fairness: Accountability typically involves transparent processes and mechanisms for assessing and addressing wrongdoing.
• Consistency: A key factor in holding others accountable is consistency
• Constructive Outcomes: The goal of accountability is often to achieve constructive outcomes, such as learning from mistakes, promoting change, and preventing future harm.
• Legal Framework: Accountability can operate within a legal framework, where individuals or organizations are held accountable through courts, regulatory bodies, or legal proceedings

Conclusion

While I didn’t agree with all her conclusions, Jenny’s book is very important. By exploring a topic that is rarely discussed, Jenny has provided us an insight into a profession, the corporate sustainability practitioner, that sees itself very much under siege.

The root cause of the pressures those thankless practitioners are facing is the inability, by and large, of their companies to approach climate action seriously, systematically and effectively.

Many corporate sustainability practitioners are resorting to the easiest to sell, least disruptive, lowest cost solutions because that is all they know will be approved.

Unfortunately, consultants who should know better continue to advise companies to pursue those solutions as do vested interests like the VCM credit providers and RE100.

The rule-makers don’t help either, both the Greenhouse Gas Protocol and Science Based Targets permitting green electricity claims, adding false legitimacy.

Once those false solutions are adopted by some corporates they come to be seen as acceptable by others, so there is a negative network effect at play. “If they are using them, why can’t we?”

At the same time the external world is becoming more sophisticated in its ability to interpret the messaging emanating from companies, like P&G’s plans we have just analysed in part. The shortcomings in those false techniques, initially only understood by a technically literate niche, are now becoming much more widely understood.

As patience in lack progress by business increases, companies are bound to be caught up in the crossfire. The ire of the angry climate concerned folks is being directed at companies and their hapless sustainability practitioners because they aren’t doing a good job, not because they are doing a good job but are misunderstood. ?

We now have a new problem: popularist politicians, largely on the right, scapegoating netzero and “woke” policies for all manner of social ills, like the cost-of-living crisis, energy costs, unemployment etc. etc. In the US the formalisation of this antipathy is creating an impossible situation – on the one hand climate concerned folks are demanding that companies respond effectively to climate change and on the other hand politicians are attempting to forbid it or at the least shame it.

So, what would I urge those poor practitioners to do?

First, I would recommend that they join their trade associations – I am Fellow of the Institute of Energy, there is also the Institute of Environmental Management and Assessment (IEMA) and many others. They would also benefit from some of the Groups here on LinkedIn.

Next, I would recommend that they find within their organisations sponsors who are senior and can help them develop a much more strategic approach which will ensure that the climate plan is based on sound principles and delivers substantial real improvement. Jenny suggests that practitioners ask themselves the following important questions to design a program that is above reproach:

What are the clear goals and objectives that our team can achieve and progress towards?

How can I make sure that my reporting is both accurate and transparent?

Have I engaged a third party to verify my claims?

Is my communication consistent with all stakeholders and am I allowing for an open dialogue?

Am I tracking, monitoring, and encouraging continuous improvement?

Excellent stuff! These are the sorts of recommendations that I have in my own methodology designed to address the very same issue that Jenny has bravely spoken up about. On the back cover of my book [d], I describe corporate action on climate as a “landscape littered with disappointment, premature declarations of victory, exaggeration (to put it mildly) and outright failure”. ?

The “Three Ms” framework I devised, and used successfully on many projects, is intended to provide a structure for climate action/resource efficiency/sustainability which will enable the practitioner to thrive and the company to embrace and, importantly, sustain change over the long term.

The method starts with recognising the sources of Value that climate action provides to the organisation and ensuring that is understood and articulated clearly. In a private company that value might mean greater profitability, in a hospital it might mean better patient outcomes or throughput. The book explains how to identify and engage around that notion of value. ?

Then we have our three Ms in order.

First is the Mandate, which is the combination of the leadership commitment, the goals or targets, the resources committed and the governance. It is only with a strong mandate that we can lift climate action out of Corporate Affairs/Marketing etc and cross into the key business functions of procurement, finance, engineering, product/service design etc etc.

Having obtained that Mandate, we then turn to Method, which is the combination of people, systems and technologies that will drive the desired improvement. Method includes things like ISO 50001, Monitoring and Targeting, Carbon Literacy, GHG Inventories, internal carbon trading, external verification. The toolbox is extensive and there should be no need to resort to the aforementioned false solutions or zombie technologies.

Finally, we have Momentum which touches on the external engagement with stakeholders that Jenny is concerned about, but also includes advice on how to integrate the improvement process across an organisation and how to go about identifying opportunities for truly transformational change.

There is one final concept that I think is also important to sustain progress on climate action and that is to move in parallel on Optimise, Modify and Transform actions. ?

I will illustrate this concept with a simple example, an air-conditioning unit. In “Optimise” I ensure that the time switch and temperature controls are set correctly, an immediate change with quick benefits using the existing equipment. These are the “low hanging fruit of climate action” that many organisations possess, and which can deliver early success on which to build further engagement.

Later on, as the equipment ages, I may be able to justify replacing it for another air-conditioning unit altogether and add insulation to the building so that I can install a smaller system. These are “Modify” actions which may take some time to organise and plan and which may have dependencies on precedent actions, like adding the insulation. In “Modify” the assumption about the need for cooling via our air-conditioner remains, but we are changing the technology or environment to make that much more efficient. In many organisations this involves tapping into the capital replacement cycle and leveraging the small incremental changes that can yield big improvements for relatively little additional cost.

Finally, in “Transform” I may work out how we can eliminate the need for air-conditioning altogether by relocating/consolidating the business to a cooler climate or eliminating the business activity that requires the cooling in the first place. Those “Transform” decisions could take considerably longer to plan and implement and may have greater uncertainty, but ultimately could have a far greater impact than anything I do in the “Optimise” and “Modify” categories.

My textbook, link below, goes into huge depth on these techniques and many others which are designed to create a high-quality, effective, long-running program of continuous improvement whose value is recognised and which is best placed to weather the many storms that face sustainability practitioners like Jenny. ?

I would hazard a guess that the Microsoft shock at COP26 would not have happened if the organisation had a clear mandate, processes and sustained commitment that seems to have been absent when Jenny was trying to make her contribution.

So please do buy read this book and appreciate for yourself what a challenging role being a sustainability practitioner in a company can be. I would be particularly interested in the views of other sustainability practitioners working in companies as well as folks in NGOs who are lobbying companies to do better.

If you spot opportunities for improvement in a corporate plan please try to be civil and certainly don’t attack the messengers, in most cases it is their bosses who have failed. But, do feel empowered to call out bad faith actions, false solutions and deflections from the imperative to decarbonise. I have given you some of the arguments here. Rest assured that the criticism is not driven by animus but by the recognition that we need companies to be effective.

With time running out, it is time for business to walk the walk, not talk the talk. Half-measures are not enough.

Thanks again to Jenny Morgan for bringing this important topic to our attention.

Folks - if you have read this book please leave your own thoughts in the comments below - you may have picked out different aspects which others would find useful! You may also find my own textbook on energy and resource efficiency helpful - it's free to download :-)

Found this interesting/helpful? This is a link to all the book reviews so far with a brief summary and evaluation.