Evian Natural Spring Water’s image is pure as snow. But a lawsuit is throwing mud at the beverage company, saying its “climate neutral” claims are misleading. The plaintiff asserts that the company is greenwashing, maintaining that any carbon offsets are decades away.
The complaint makes claims under California’s Consumers Legal Remedies Act and New York General Business Law prohibiting false advertising.
Indeed, the carbon credit program has come under intense scrutiny. The World Economic Forum has said the voluntary carbon market lacks transparency, causing corporations to question them. The voluntary carbon markets are proprietary and outside the purview of national governments.
Enter blockchain technology: companies face challenges keeping their shareholders and other stakeholders updated about climate initiatives. But public ledgers allow companies more visibility into their net-zero efforts. Carbon programs can track the offsets' origins and the scrutiny given to them before they are issued — collectively updated by the companies purchasing those offsets.
“The key is transparency. Companies can show step-by-step what they are doing and bring along their stakeholders,” said Dave Dickson, founder, and chief executive of PicoNext, in an interview. Cloud technology permits the ledgers to be globally available and able to get updates from various participants — an effective way to add integrity to the issuance of carbon offsets.
Consulting firm McKinsey & Company estimates that 88 percent of Generation Z consumers don’t trust companies’ environmental claims. They’re looking for increased transparency from the brands they interact with and for companies to back up their talk with action.
Shareholders also hit Delta Air Lines with a class action suit alleging its carbon-neutral claims were bogus. So were Nivea skin care products, French energy company TotalEnergies, and Dutch airline KLM. Even FIFA, the international soccer federation, was dragged into the imbroglio.
There’s a difference between voluntary and sovereign carbon credits issued by national governments. Last year’s COP 27 meeting in Egypt put those credits on a fast track to getting corporate finance — credits that the United Nations monitors. This writer is the editor at large for a rainforest coalition that includes about 65 countries, which could potentially issue those sovereign carbon credits.
“Sovereign carbon credits offer a more rigorous and verified way for corporations to meet sustainability goals,” said Terry Dickson, co-founder and business development officer, in an interview. “Because they are higher-quality, they are more attractive to corporations pursuing net-zero targets. And they also represent a capital investment directly in natural assets – forests and land – that sequester carbon.”
For example, companies purchasing REDD+ sovereign credits can update a public ledger to show their specific activities – including the number of credits purchased, the sovereign supplier, links to registry information, and details about audit and verification activities. They can also include other information that helps give context to their actions, like how the sovereign credits impact the local economy and other in-country projects the credits are helping to fund.
The ledger system, which is in the cloud, will have the following information:
The carbon credit market has gotten a black eye. But the goal is to save the rainforests, which are natural CO2 vacuums. Undoubtedly, companies will first deploy more renewables and energy-efficient technologies. But to fulfill their net-zero pledges, they will buy carbon offsets — financial vehicles that independent third parties must thoroughly vet. And blockchain technology is one way to give stakeholders more confidence in the carbon market.
