How to Avoid Greenwashing and Improve the Integrity of Sustainability Assessment

sustainability assessment to avoid greenwashing

How to Avoid Greenwashing and Improve the Integrity of Sustainability Assessment

sustainability assessment to avoid greenwashing

The covid pandemic has brought sustainability into the consciousness of the public, and by extension, investment firms. The question on everyone’s lips is: are we prepared for the next crisis on the horizon?

 

Environmental, Social and Government (ESG) assessment isn’t just a matter of corporate social responsibility, there is a strong correlation between ESG rating and market performance as fund managers urge investors to take hold of the issue capturing the world’s attention.

 

But in the grapple to secure companies with a commitment to sustainability, how assured can you be of the legitimacy of a sustainability companys’ claims? Furthermore, how confident are you of the veracity of the sustainability assertions of companies throughout the supply chain?

 

In order to avoid accusations of greenwashing you need to do all within your power to research the legitimacy of sustainability claims and, if possible, carry out your own sustainability assessment with reliable and consistent data. 

 

Here’s a rundown of what to include in your sustainability assessment, and how you can protect your company from misleading information and greenwashing.

 

 

6 Things to Adress in your Sustainability Assessment

 

 

1. Obeying national and international standards

Does the company conform to and respect the rules and boundaries of national or international regulators? This consideration is an absolute bare minimum.

 

As a key performance indicator, consider measuring the quantity of fines or infractions against the company.

 

2. Use and disposal of raw materials

What raw materials does the company use? Are they sourced responsibly and locally? How are they produced? Does the production of the materials expose workers to toxic chemicals? What waste and emissions do they generate? How long do the materials take to decompose into organic matter once disposed of?

  

3. Labour standards

What regulations are in place to protect the health, safety and wellbeing of employees? How many workplace incidents have occurred? How were workplace complaints resolved?

 

You can use Symanto’s natural language processing (NLP) AI technology to measure employee sentiment on social media and through employee review sites such as Glassdoor.

 

 

4. Supply chain

As well as running checks on labour standards within the target company, you’ll also need to consider standards across the entire supply chain from sourcing raw materials to distribution. Do suppliers share the same commitments to labour protection and the environment as the target company?

 

 

5. Social impact

In a globalised system of outsourced production, there are increased social risks. What is the impact on local territories and communities and how is the target company implicated in shifting international relationships?

 

6. Life cycle and disposal

What is the average duration of the product? Once it is no longer fit for purpose, can it be easily repaired by purchasing separate parts? How safe is it to dispose of? Can it be recycled or reused?

 

 

How to Spot (and Avoid) Greenwashing

Greenwashing is when a company or organisation falsifies sustainability claims or makes cynical attempts to deceive consumers into believing that the company’s products or services are environmentally sound.

 

It’s easy enough to write sustainability into your corporate communications and publish them on your website, it requires a lot more commitment and dedication to take action and enact meaningful change into your work processes. For that reason, it isn’t enough to take corporations at their word or send out box-ticking ESG surveys. More needs to be done to mitigate the legal risks of unsubstantiated sustainability claims.

 

In search of more reliable and consistent data for sustainability assessment, investment firms are turning to cutting edge AI technology to weed out the greenwashers.

 

Symanto uses advanced AI technology and natural language processing (NLP) to expedite the process of extracting sustainability and social responsibility claims from corporate communications.

 

Compare this information against year-on-year against data such as carbon footprint emissions, international standard infractions, employee satisfaction, to see if they’re living up to their pro-social and pro-environmental promises.

 

NLP can also be used to rapidly identify emerging risks. For example, in recent years social movements such as Black Lives Matter, and #MeToo have led many companies to make important policy changes. NLP technologies together with machine learning can identify sudden increases in topic mentions and alert you early on to help you protect your investment.

 

 

Get Started With Symanto

Symanto technologies have a diverse range of applications including supporting ESG and due diligence reporting. To find out more about our services and tools, get in touch or book your free personalised demo.

 

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