Greenwashing is in the mouth of the investor

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Greenwashing is in the mouth of the investor

Greenwashing Extinction Rebellion protest v SSE Jun21 from Alamy 29Jun21 575x375

Accusations of greenwashing have been infrequent in the 14 year old green bond market, which mainly sticks to uncontroversial assets, such as renewable energy and railways. The sustainability-linked bond market is only a toddler, but already a much more difficult child. No wonder: it is handling tougher material.

This week, SLBs reached Canada. One issuer, Telus, is a teacher’s pet — it plans to cut emissions 46% by 2030. It might, because it’s a telecoms company.

Enbridge, which pipes a fifth of the oil produced in north America, is never going to win the greenness cup. But its efforts to become sustainable are just as important.

If the climate is to be saved, oil and gas use needs to decline fast. Enbridge is planning for them to be around a long time, if not to grow.

For as long as Enbridge exists, however, it will have operational emissions, and the sooner it lowers them, the better. Whether the SLB on balance encourages this modest improvement or perpetuates a dangerous sunset industry, every investor must decide.

For such a company to issue an SLB is not itself greenwashing. As long as Enbridge discloses its activity and what the SLB does honestly, the deal is what it is.

But when an investor buys a portfolio of SLBs or green bonds and says ‘look how sustainable I am’, without referring to the variable ambition and climate outcomes those bonds are consistent with, the investor is greenwashing.

That is exactly what investment banks do with their headline-grabbing trillions of sustainable finance targets. Everything goes in the pot, never mind the effects.

Catch up with your clients — report what matters: your financed emissions.

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