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As I approach the conclusion in my MBA studies, sustainability and the United Nations’ Sustainable Development Goals (SDGs) for 2030 have become areas of intense interest. However, these goals often face criticism for being overshadowed by greenwashing – a deceptive practice where companies project a false image of environmental responsibility.

Greenwashing undermines genuine sustainability efforts. As David Vogel, author of The Market for Virtue, notes, companies can present a facade of environmental care while continuing harmful practices. For example, issues such as Indonesia’s palm oil industry’s unsustainable practices, weak commitments to carbon neutrality among Chinese tech firms, and the controversy surrounding Shell’s carbon offset schemes in China exemplify the challenges of combating greenwashing in the Asia-Pacific region.

Carbon Trading: The Good, the Bad, and the Ugly

Carbon trading is a market where it allows companies to buy and sell carbon credits, essentially trading the right to pollute. While this system incentivizes firms to invest in cleaner technologies, it can also be a loophole for avoiding genuine change. Critics liken it to buying pre-done homework, showing compliance on paper but fails to address the root problem of emissions reduction.

Studies reveal that carbon trading often suffers from inadequate regulatory frameworks and limited oversight. According to the Environmental Defense Fund, weak governance can lead to fraudulent carbon credit claims, undermining the integrity of the market. However, when properly regulated, systems like the European Union Emissions Trading System (EU ETS) demonstrate that carbon trading can reduce emissions effectively while encouraging innovation in green technologies.

Yet, the whole idea of sustainability using a financial equipment is hard to be conceived by profit-driven firms where the beneficiary should be the shareholders. How does an oil & gas, power emission or mining firm traditionally obtain the raw materials and sources for its production, will likely change with better standard of suppliers, but it will take time.

And on the optimistic note, there are and will be companies which are actively exploring means to help the environment with a stronger focus on improving their ESG commitment. Here are some ways that could be useful:

Transparency in Reporting: Transparency is paramount. Firms need to disclose verifiable environmental impact data, ensuring alignment with recognized standards like the Global Reporting Initiative (GRI) and the Task Force on Climate-Related Financial Disclosures (TCFD). Studies like that from KPMG highlight that transparent sustainability reporting builds stakeholder trust and drives accountability. Indeed this takes time, as a committed firm will require the disclosure from its value chain of suppliers and perhaps customers.

Invest in Sustainable Operations: Instead of relying on carbon offsets, organizations should focus on reducing emissions at the source. Transitioning to renewable energy, adopting circular economy practices, and minimizing waste are critical strategies. Research from the International Renewable Energy Agency (IRENA) confirms that switching to renewables not only lowers emissions but also offers significant economic benefits, including job creation and cost savings.

Initiate Partnerships: Partnerships with local communities, governments, and non-profits amplify ESG efforts. Collective actions can drive systemic changes, as seen in initiatives like the C40 Cities Climate Leadership Group, which unites cities worldwide to combat climate change through shared resources and expertise.

Continuous Education: Education is always key towards real adoption and impact. Educating employees, stakeholders, and the broader community about the importance of sustainability fosters a culture of environmental responsibility. Research from Harvard Business Review emphasizes that companies with well-informed teams, especially from support of the middle managers, are more likely to develop innovative, impactful green solutions.

Going Forward

Addressing greenwashing and improving carbon trading systems requires a multifaceted approach. Companies must embrace transparency, adopt sustainable practices, and work collaboratively to drive meaningful change. While these efforts demand significant resources and commitment, the long-term benefits—both for the planet and for business—are undeniable.

By aligning ESG goals with authentic actions, firms can move beyond superficial promises to genuinely contribute to the global sustainability agenda. As stakeholders, it is our collective responsibility to hold organizations accountable, ensuring a future that prioritizes the planet alongside profit.