A little less conversation, a little more action: Overcoming greenwashing traps

With greenwashing accusations on the rise, organizations must boost transparency to bolster customer trust. Our World in Balance 2024 report offers actionable advice on how to navigate the challenges and opportunities of environmental and social sustainability.

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What’s everyone saying?

• As the effects of climate change grow more visible each year, sustainability commitments from governments and corporations are intensifying. “Billions are pouring into the business of decarbonization,” ran a headline by The Economist in 2021. Three years later, this trend shows no sign of slowing down. Just on the energy front, “the world now invests twice as much in clean energy as it does in fossil fuels,” notes the International Energy Agency (IEA) .
• At the same time, accusations of greenwashing are mounting, with lawsuits and class actions on the rise as consumers and citizens demand more accountability.

What do we have to say?

• Undeniably, greenwashing suspicions are growing: The third edition of our annual research series, A world in balance 2024: Accelerating sustainability amidst geopolitical challenges, surveyed 2,152 executives and 6,500 consumers in 13 countries. The research shows a drastic increase in consumer distrust and skepticism across all age groups. A striking 59% of all consumers (and 80% of Gen Z) say they never, rarely, or only sometimes trust an environmental claim about a potential purchase. In comparison, 52% believe that organizations are greenwashing their sustainability initiatives, up from 33% in 2023.
• Executives, too, are taking note: 62% are now worried their organization’s efforts towards sustainability might seem insincere, a 51-percentage-point increase from 2023.
• Yet, our report also shows that sustainability has progressed faster than ever over the past three years of research. Our sustainability maturity index* shows a 22-percentage-point jump in the adoption of sustainable practices and initiatives from 2022 to 2024. These figures show that sustainability is not a fad, with significant progress being made in circularity, energy consumption tracking, water stewardship, and more.

• On the technology front, climate tech solutions, such as low-carbon hydrogen, industrial carbon capture, or electrification, are gaining momentum, with 67% of executives acknowledging their role in reducing greenhouse gas (GHG) emissions and meeting sustainability targets.
• Over recent years, regulation and policy have fostered the rise of climate tech. Funding availability has also played a key role – 73% of US executives report receiving federal funding, for example, through the Inflation Reduction Act, to invest in sustainability initiatives.
• Generative AI is another factor accelerating the rise of climate tech, with 65% of executives now reporting their organization uses Gen AI models to advance their sustainability agendas, nine percentage points more than last year.
• A pressing question remains: Why is there such a large gap between the progress being made and the consumers’ perceptions? Beyond the wariness caused by some companies’ unsubstantiated sustainability claims, the answer may well lie in the challenges organizations are facing in measuring (and thus proving) their sustainability progress. For example, while regulation has accelerated measurement and tracking capabilities, many organizations are still unprepared for upcoming directives like the EU’s Corporate Sustainability Reporting Directive (CSRD). Starting in 2025, the CSRD will demand detailed yearly disclosure reports on environmental and social impact, requiring increased data consistency from around 50,000 companies in the EU.
• More specifically, organizations remain insufficiently prepared for Scope 3 emissions assessments and disclosures – out of the organizations that will need to report in 2025, only 38% are prepared to report Scope 3 downstream emissions and 56% are prepared for Scope 3 upstream emissions.
• Additionally, the shortage of skilled workers remains an obstacle to climate tech adoption. Geopolitical tensions, ranging from US-China relations to the war in Ukraine and the European energy crisis, are also slowing progress, with 65% of executives citing geopolitics as a factor in slowing down sustainability investments and projects.

Who’s doing it right?

• In 2021, the International Air Transport Association (IATA) committed to achieving net-zero aviation emissions by 2050 . This is no small feat – according to the IEA, aviation accounts for two percent of global energy-related CO2 emissions, and demand is expected to keep rising in the coming years, making this industry one of the most crucial when it comes to decarbonization. To encourage sustainability and circularity in aerospace, Capgemini partnered with AWS to design Lifecycle Optimization for Aerospace , a solution that makes it possible to scan an entire plane’s spare parts to understand the full product lifecycle better. Powered by AI algorithms that combine three million analyses, the solution has the power to take aviation to the next level. Watch to learn more ??

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What’s the bottom line?

To foster consumer trust, companies must increase transparency and accountability and work to lift the obstacles that are slowing down their progress. Here is how:

1. Anticipate and prepare for regulatory changes and geopolitical uncertainties that may affect sustainability investments. Organizations should track regulatory changes over time and across regions and analyze them alongside geopolitical and climatic developments to build a robust regulatory intelligence program. Integrating regulatory intelligence within decision-making processes from the start can also help organizations better prepare for regulatory compliance.?
2. Frame sustainability as a driving force for innovation and business value. Organizations need to demonstrate that sustainability investments can indeed drive innovation and create value across all areas – operations, manufacturing, products, services, technology, and people. Setting sustainability goals is not just about compliance – it's also about driving growth and resilience. Measurement and reporting are key to proving this impact, as data can help show concrete results. In this regard, incorporating environmental, social, and governance (ESG) ratings and science-based target initiatives (SBTIs) into vendor selection criteria and working closely with suppliers to track carbon emissions in the supply chain can help organizations better control their Scope 3 emissions.
3. Embed circularity in the full value chain. Organizations should partner with recyclers who are committed to circularity principles. With the complexity of recycling and waste disposal laws and regulations, building an ecosystem of partners is essential. As consumers demand more sustainable products, adopting circularity in product design drives value by recognizing sustainability as a source of innovation. Conducting a life cycle assessment of products and services is also key to reducing carbon footprints and extending product life to reduce waste. Finally, technologies like AI and data analytics can support circularity by optimizing resources and processes. Sustainability is not just about cutting carbon emissions – water and biodiversity should be key priorities to organizations’ sustainability strategies. Implementing water audits, recycling systems, redesigning products and processes to limit water requirements, and exploring alternative cooling technologies for manufacturing processes or data centers are some of the solutions organizations can embed in their water stewardship program.
4. Invest in climate tech solutions and data and digital technologies that can help reduce emissions, optimize resources, and enhance resilience. Innovative business models, digitalized processes, and technological solutions that seamlessly align and integrate within organizations’ ecosystems will help drive climate tech adoption. Governments can support this trend through grants, subsidies, and tax credits.
5. Prioritize customer centricity in sustainability strategy and initiatives to build trust. Organizations should bolster their sustainability claims with evidence-backed data, building long-term trust and credibility around the brand among consumers and regulators. Such data can also help organizations support claims made on the health and safety impact of their products and services to customers. Adhering to external guidelines is one way in which frontrunner organizations mitigate greenwashing.
6. Ensure the achievement of sustainability goals is an enterprise-wide focus. Every function and business unit should understand, from their unique standpoint, the implications and opportunities associated with contributing to sustainability goals. Furthermore, employees should be educated on how they can help their organization reach ESG targets. Finally, the rise of sustainability regulation makes it crucial for employees to be aware of required guidelines and standards.?

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Looking for more?

• Last week, leaders gathered in New York for this year’s #ClimateWeekNYC. Capgemini was there, with its #BusinessToPlanet Connect event, featuring inspiring stories of sustainable business transformations that show sustainability and economic interests can go hand in hand. Our panels provided practical insights on how to leverage investment, regulation, Climate Tech, and circularity to fuel sustainable growth. Read a recap by Vincent Charpiot , Head of Group Sustainability Business Accelerator and Executive Vice President at Capgemini, for key takeaways from the event.

• Capgemini recently partnered with America's Cup Media to design and operate WindSight IQ? , a technological innovation that provides real-time wind visualizations in AR/VR . This engineering feat offers more insights to commentators and viewers than the teams on the water themselves have access to. Beyond race sailing, WindSight IQ? is the type of innovation that can make a significant difference in sustainability and drive business value in a wide variety of industries.

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And you, what are you saying?

We’d love to hear how your organization is navigating the challenges and opportunities of sustainability. How are you addressing consumer trust? What steps are you taking to integrate circular design, track Scope 3 emissions, or adopt climate tech? Share your insights and experience in the comments below.

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* To benchmark organizations’ progress in adopting sustainable practices and initiatives over the past three years, we developed a sustainability maturity index across 93 questions in our sustainability framework. We took 2022 as the base year. An index value of 100 indicates that a result matches the baseline average. From 2022 to 2023, the index increased by 12 percentage points (pp) and from 2023 to 2024, it increased by 10 pp, representing a cumulative increase of 22 percent over the three-year period.