Greenwishing Woes

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    An offhand remark by a portfolio manager the other day gets me thinking. Am I perhaps being way too gullible and lenient when it comes to greenwishing? The universally despised practice of greenwashing is a different thing, of course. I’d never knowingly endorse intentional deception. Moreover, my colleagues and I consider it our duty to expose any gross omissions of available evidence we might stumble upon while devouring our daily ration of sustainable bragging. As to the more benevolent practice of aspirational greenness, though, I am worried my standards might be somewhat laxer.

    If you are unfamiliar with the distinction between the two phenomena, let me run you briefly through the definitions, to the extent that there are any. It was Duncan Austin who coined the term ’greenwish’ in a 2019 essay[1] that has since become a modern classic. According to him, instances of greenwash, in which companies exaggerate sustainability initiatives to divert attention from environmentally damaging core businesses they have no intention of changing, are relatively easy to expose. Greenwish, on the other hand, “may prove every bit as harmful as greenwash, and possibly harder to unpick, because it is more widespread and arises mainly from good intentions,” writes Austin. He defines this affliction as “the earnest hope that well-intended efforts to make the world more sustainable are much closer to achieving the necessary change than they really are.”

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    The essay, by the way, is well worth rereading in its entirety. It offers a sobering examination of the state of our industry, years before other famous insider critics, like Tariq Fancy or Stuart Kirk, would express similar thoughts. “There has been a troubling deterioration of many of the environmental and social metrics the sustainable business movement has explicitly sought to improve,” Austin sums it up rather gloomily.

    What I find most impressive, however, is his earnest desire to understand the origins of greenwishing before denouncing it. “The nature of competitive markets is that companies must talk up their goods and services; lackadaisical marketing rarely works,” writes Austin. “Hence, while it is not really their fault, commercial norms nonetheless trap sustainable business into portraying its initiatives and products as greater solutions than they often are.”

    And although such wishful thinking might seem like an innocent endeavour in isolation, it leads to mass deception, according to Austin. “Unfortunately, the many individual pitches for more-sustainable products aggregate into a loud, confident signal that business has got environmental protection covered,” he concludes. Which it hasn’t, of course.

    Could it be that the current surge in greenwishing is temporary, though, the result of growing pains? According to a recent PwC study, the phenomenon “is particularly prevalent where the rapid growth of new regulations outpaces market players’ ability to comply.” And we all know what an avalanche of sustainability regulations we have been blessed with in the past few years. Of course, hoping for greenwishing to fade away as companies slowly adjust to the new world order is possibly just another greenwish.

    And so, you can understand perhaps my inner struggle of late, trying to determine whether I am guilty of aiding and abetting the greenwish choir by guilelessly cheering all those self-proclaimed sustainability victories. Which would make me a meta-greenwisher, I guess. At least, I’ve been honest about it, declaring my sympathy for the (greenish) devil from the start. Should I reconsider, though? Perhaps it is time to stop endorsing the unintentional trespasses of financial institutions that claim to truly believe in ESG yet fail to achieve the intended impacts and results.

    [1] Greenwish: The Wishful Thinking Undermining the Ambition of Sustainable Business, by Duncan Austin, has quite a wistful subtitle too. Bad news for the environment: sustainable business isn’t succeeding. I’m frustrated, too. But we can make it succeed.

    Image courtesy of Valentin Petkov on Unsplash
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