Corporate Greenstalling—a Threat to Advancing Climate Action | Opinion

The theme for this year’s Climate Week NYC is “It’s Time”—and it’s time for leaders to address a major risk to climate progress—greenstalling.
As companies in the U.S. face inflation, economic and political uncertainty, increased greenwashing litigation, and the realities of the high costs of resourcing decarbonization, some are considering greenstalling—walking back their greenhouse gas (GHG) emissions reduction targets and delaying investments in decarbonization.
The United Nations’ Emissions Gap Report 2023 said 2030 GHG emissions must fall by 28 percent for the Paris climate agreement’s 2 degrees Celsius pathway, and 42 percent to follow the 1.5 degrees Celsius pathway. Inaction is not acceptable. Decarbonization is a business imperative and corporate entities have a responsibility to act.
Delaying action is not smart business. A growing number of regulatory requirements in the U.S. and globally include disclosing emissions footprints and credible climate plans. Additionally, investor facing ratings and frameworks continue to strengthen criteria for climate progress, and consumers and employees alike continue to signal they expect companies to take climate action.
Greenstalling is often driven by misconceptions, which can be easily debunked. So as leaders gather to discuss action, we must collectively dispel the common fears of investing in decarbonization.
The Fear of Greenwashing
The crackdown on greenwashing in the United States has escalated over the past few years across various industries. Corporate concerns about setting sustainability goals publicly, including emissions reduction targets, have elevated—fearing they too may be at legal or reputational risk.
These crackdowns are not signaling a pause to climate action entirely, but pushing for a credible plan. In order to stay on track to limit temperature increases to 1.5 degrees Celsius, credible climate transition plans embedded in core business strategy are needed. Creating credible decarbonization plans will alleviate greenwashing accusations.
Fear of Backlash From Stakeholders and Customers
The backlash companies have experienced against climate targets from some stakeholders, such as activist investors and social media campaigns, has weighed heavily on many business leaders. Withdrawing or delaying emissions reduction targets, however, fails to take into consideration the full universe of stakeholders. Giving into such pressure campaigns can lead to a credibility gap, simultaneously hurting a company’s reputation with just as many, if not more, stakeholders.
Consumer trust continues to be influenced by a business’s commitments to sustainability. Understanding brand backlash is critical, including its origin and true reach, alongside customer demographics. Conceding to the loudest group in the moment can ultimately damage a brand reputation long-term with its most important audiences.
The Fear of Cost
Companies continue to cite the costs associated with implementing decarbonization initiatives as one of the reasons for greenstalling, according to the 2024 Net Zero Report. While it’s true that the process can be complex and capital intensive, a growing number of options are available to overcome resource limitations.
For manufacturing and industrial companies needing additional capital to tackle harder-to-decarbonize emissions, funding has been made available by the Inflation Reduction Act (IRA) grants and tax incentives. The IRA has deployed $56 billion in funding to date, and its Industrial Demonstration Program has issued awards to 33 projects with a total federal cost share of almost $6 billion. Kraft Heinz has been selected for award negotiations to receive up to $170 million from the U.S. Department of Energy to support the implementation of clean energy projects at 10 of the company’s U.S. plants.
Additionally, as-a-service models enable companies to implement decarbonization measures while keeping associated high capital expenditures off the balance sheet—leasing the asset instead of purchasing it.
Even in the absence of any outside funding, simple tasks can drive a significant impact. Focusing on no-regrets energy efficiency measures can then generate savings to then be used for decarbonization investments.
Finally, while companies fear the cost of action, inaction can result in significant near- and long-term costs. Capital improvements that only optimize for cost, without considering emissions requirements, can result in 30-year investments that do not keep companies on track for targets and are expensive to change.
Take Action and Drive Decarbonization Progress
Challenges and changing market conditions can disrupt even the best laid plans, and it’s true companies will need an abundance of expertise and grit to push forward. While the road to decarbonization may be intimidating, the benefits of starting now are well worth any initial challenges. Delayed action will only lead to higher costs in the future.
Having a credible decarbonization roadmap can give companies the ability to act amid shifting dynamics. If companies understand what to invest in, when, and where to decarbonize, bring an emissions lens to capital expenditures, and identify the right funding, success is within reach.
During Climate Week NYC, it’s time for organizations to have the confidence to take action and get ahead of the hurdles that will accompany those that sit on the sidelines.
Abby Davidson is managing director of strategy and implementation at ENGIE Impact.
The views expressed in this article are the writers’ own.