The Truth About ESG Goals: Why Companies Are Falling Short and Engaging in Greenwashing

The Challenges Companies Face in Meeting ESG Goals

In my previous blog post, we discussed the most recent Progress Report and the challenges companies face in meeting their sustainability commitments. Most reports indicate that we are falling behind on our ESG targets. I do not doubt the intent and desire of large brands to meet their sustainability objectives, but the question remains whether these companies are willing to pay the price to achieve these objectives. While some companies are brave enough to admit their failures and are very open about their struggles, others often engage in what is called "greenwashing." This term was first used back in the 1960s and is defined as "advertising and public messaging to appear more climate-friendly and environmentally sustainable than [a company] really is." Just like the cartoon below illustrates:

Beyond Plastic ESG Cartoon

The Pitfalls of Greenwashing in ESG Advertising

There are several reasons companies may resort to greenwashing, but none of them can be justified, and none of them should be tolerated. Greenwashing usually starts with some form of "ignorance," but it never stops there. Initially, companies see ESG commitments as a great marketing tool and a demonstration of commitment to responsible corporate standing (in some instances, there are also legal requirements). These commitments are rolled out with great fanfare, like joining a list of signatories of the US Plastics Pact (there are 117 of such signatories as of October 2022). Everybody applauds, the company gets positive news coverage, a large portion of the company website is devoted to the cause. Unfortunately, for way too many companies, it is where their "sustainability journey" peaks.

Beyond Plastic Greenwashing Infographic

Balancing Profitability and ESG Commitments

Companies may have legitimate reasons to adjust their ESG targets and timelines, as sustainability commitments can be expensive and must be balanced with other shareholder and stakeholder interests, such as profitability. While achieving a balance between sustainability and profitability should be discussed openly and transparently, some companies choose to resort to greenwashing instead of honestly acknowledging their failure to meet ESG objectives. As a result, greenwashing is becoming more elaborate, with some companies engaging in more nuanced tactics to avoid criticism and negative press. Calling practices “sustainable” and “eco-friendly” is no longer sufficient to demonstrate a commitment to sustainability, as shareholders and society at large demand action.

Two Types of Greenwashing that Undermine ESG Goals

There are several types of less-than-honorable corporate behavior that can be classified as greenwashing, and one of the most widespread is "green labeling." This occurs when close examination of sustainability claims reveals that they are mostly misleading. With regards to bio-plastics, a significant portion of products labeled “biodegradable” or “compostable” are in fact neither. Although regulations have been enforced to prevent unsubstantiated claims, the green labeling practice continues to this day. For example, PLA products have been labeled as “biodegradable” and “compostable” for many years without proof that they will degrade in the environment. PLA is a bio-based polymer/plastic, but it can take hundreds of years to degrade in an environment like a composter or a landfill, and it does not meet the majority of technical criteria required for the material to be called “biodegradable” or “compostable.” Although some research shows that some additives can accelerate degradation, it is clear that the majority of PLA biodegradability statements are not true. Furthermore, PLA products represent one of the largest threats to existing plastics recycling infrastructure.

Another type of greenwashing is “green rinsing,” which is an emerging tactic that involves companies continuously replacing their ESG targets with different metrics or different dates. Rather than acknowledging difficulties or inability to achieve ESG targets, the company announces that it is “elevating” its commitment, conveniently forgetting to mention its simultaneously extended implementation timeline and a very obvious fact that its previously announced (lower) commitments have not been or will not be met. The biggest problem with green rinsing is a lack of desire to explain the root cause of missing the original targets and a complete absence of legitimate discussions of why the public should believe that the new target had a better chance of being achieved.

The Importance of Accountability in ESG Reporting

During the recent COP27 climate conference in November, a prominent case of greenwashing was discussed. Major brands have been under immense pressure to reduce their harmful emissions and these initiatives are among their primary ESG objectives. It is hard to believe, but combined pledges by large companies to achieve net-zero emissions cover a whopping 80% of current emission levels. Clearly, reducing emissions by 80% is not realistic. In fact, the UN Secretary General has called such pledges a form of greenwashing, stating that they demonstrate “a surplus of confusion and deficit of credibility”. When faced with scrutiny, companies are revising their pledges with different metrics and timelines but without acknowledging any wrongdoing. Most major oil and gas companies are no longer advertising net-zero emissions as regulatory documents now prohibit such claims for any company with investments in fossil fuel projects. Instead, the companies are switching to more ambiguous metrics such as “low-carbon” rather than specific targets like “CO2-free”.

Beyond Plastic ESG Reporting


In conclusion, it is worth noting that one of the main reasons greenwashing is still so prevalent is that fulfilling ESG commitments is still seen by many as a “nice-to-have” rather than a “must-have” factor. In the corporate world, senior executives are often fired for barely missing EPS targets, but how many are fired for not meeting ESG targets? Very few, if any. This explains why greenwashing still exists.

About the Author

Alexander Delnik

Alexander Delnik is a seasoned professional with close to 20 years of experience in plastics recycling, material circularity, and related regulatory policies. His expertise spans from the development of PET recycling technologies to the creation of innovative enterprises that promote circular economy in plastics and plastics packaging. What he is most passionate about is promoting innovative solutions and products that can improve the quality of life. Throughout his career, Delnik has built successful companies and developed business models that identified key success factors for building a sustainable recycling model. He strongly believes that responsible use of plastics, including assuring circularity of plastic products, is becoming the norm. He advocates for effective plastic recycling, responsible material compostable materials, and all solutions to eliminate pollution while allowing us to benefit from the tremendous opportunities that biopolymers offer. Delnik is particularly excited about initiating legitimate and honest conversations about hot topics such as plastic bans and replacing plastics with other products. He encourages an informed and objective discussion on how plastics participate in our lives, lifting the conversation beyond catchphrases, sensational screen shots, and emotional outbursts. He aims to compare recycled, reused, and composted solutions, evaluating their impacts and abilities, as well as end-of-life solutions, and the impact if they are not composted. Delnik's accomplishments are many, and he has a long history of building successful enterprises, but he prefers to promote his overall experience and concepts over his history. His ultimate goal is to help move beyond the sensationalism surrounding the plastics industry and to have an informed conversation about how we can improve the quality of life while reducing plastic waste.