Greenwashing – Are we the worst offenders?

Are we solely concerned about the appearance of being green?

If we really care about climate change, shouldn’t we focus on decisions that have real impact?

Language, like fashion or cuisine, undergoes trends. Currently, the popular term is "greenwashing." In simple terms, greenwashing refers to when an organization prioritizes marketing itself as environmentally friendly rather than actually reducing its environmental impact. Greenwashing is considered unethical because it deceives consumers who genuinely seek eco-friendly products or services. Major brands such as Apple, Starbucks, and Zara have all faced accusations of greenwashing.

As I stood in the morning coffee line with the other ponytails and their reusable cups, I pondered, "Could we be the biggest greenwashers of them all?".

Perspective

Let's put things into perspective: a paper cup contributes a relatively minimal 10.2 grams of CO2 to the world. On the other hand, Australian banks loaned a staggering $8.9 billion* to the polluting coal, oil, and gas industries. While a keep cup is a visible choice, you don't wear your bank's name on your T-shirt. Are we solely concerned about the appearance of being green? If our worries truly lie with climate change, shouldn't we focus on the banks instead?

Not only does the banking and finance sector represent approximately a quarter of the ASX, but it also indirectly controls the rest of the economy by deciding which companies to invest in or lend to. While some banks fund businesses indiscriminately, others prioritize the communities in which they operate or at the very least consider climate change a significant risk that must factor into their investment decisions. Before investing or lending to a company, they evaluate their greenhouse gas emissions, water and waste management practices, and their contribution to climate risks, all to determine their long-term sustainability.

Why are we so fixated on keep cups, but when it comes to crucial financial decisions in our lives, such as mortgages, we make no effort to seek sustainable solutions?

Cost

The first concern revolves around cost—more specifically, the perception of cost. It baffles me how we've transitioned from accepting that organic food is pricier to assuming that sustainable loans must also be more expensive. In reality, sustainability is determined by the banks' internal policies and practices and has no impact on the interest rates they offer borrowers. Sustainable banks are more likely to be forward-thinking, dynamic organizations. Furthermore, green loans, designed to promote the construction of energy-efficient homes, often come with significant interest rate discounts.

Complexity

Our second concern is complexity. With an overwhelming amount of jargon and countless options, selecting the right mortgage provider is already challenging enough. Now we're expected to add an additional dimension—sustainability—which is just as intricate. Having been involved in sustainable finance for fifteen years, I can attest that it's a bit of a minefield. Therefore, it makes sense to consult a specialized sustainable mortgage broker, just as you would engage an architect or engineer for your project.

Real Change

I adore Sydney and relish the opportunity to savor my coffee under the glorious blue sky. Fires, floods, and diseases have served as clear warning signs, indicating that while every little action counts, relying on keep cups alone is insufficient. To enact real change, we must incorporate sustainability into more substantial decisions, such as choosing a sustainable mortgage.

The Solution

Imagine if everyone who reads this article were to place their mortgage with a sustainable bank, then pass it along to their friends and colleagues who, in turn, do the same. We could truly make a difference. I can envision the joyous smiles of these people's grandchildren as they frolic in the waves at Bondi, thanking us for our efforts in enabling them to relish the beauty of this magnificent city.

Get in touch to find out more about your personal situation.

*(Market Forces 2020)