Sunday Read: Whistleblowers Protect Our Planet
This overview of whistleblowers’ role in environemental protection efforts was sent as part of NWC’s Sunday Reading series that aims to educate supporters about specific whistleblower legislative or policy initiatives. For more information like this, please join our mailing list.
Friday, April 22nd, marks Earth Day, where over 140 countries celebrate the largest environmental movement, soon to be 52 years old. With Earth Day just around the corner, we are reminded of the importance of protecting our environment and how individuals and organizations alike are responsible for safeguarding our planet.
Unfortunately, some companies and organizations use misleading marketing tactics to deceive consumers into believing their products are more environmentally friendly than they actually are, this is a practice known as greenwashing. Whistleblowers around the world have attempted to raise concerns about these deceptive practices for decades, and NWC has been fighting alongside them to gain the protections needed to empower these whistleblowers to report safely and be rewarded for their courageous efforts to protect our planet.
In this Sunday Read, we discuss greenwashing and other environmental crimes, describing the important role that whistleblowers play in holding companies accountable for their actions.
What is Greenwashing?
Greenwashing when a company uses marketing and other method of communication to spread an inaccurate or intentionally misleading image or protecting the environment. This can include the use of green colored imagery and environmental terms like “eco-friendly” or “sustainable” on products, making excessively vague or general claims. Sometimes these tactics een include focusing on one part of a business to divert unwanted attention, or simply lying about the environmental outcomes of a business, and many other forms of deception.
Originating from the term “whitewash,” greenwashing was first used to describe the hotel industry’s attempt to save on water costs by claiming to be concerned about coral reefs. Noticing signs that asked guests to reuse towels to “save the environment”, environmentalist Jay Westerveld commented that the industry had an ulterior motive to reduce laundry costs. Since 1986, misleading concern for the environment has come to be known as greenwashing.
Greenwashing is important to combat not only because it undermines environmental protection, but also because it misleads consumers and the public. When investing in companies, the public needs to have as much information available to them as possible. If this information is coated in environmental euphemisms, ambigous language, or outright falsehoods, it can be extremely difficult for investors and consumers to make accurate decisions.
This year’s Earth Day theme encourages us to “Invest in our Planet”. In order to do so, it is very important to uncover and avoid greenwashing efforts before making investment decisions so that investors and consumers alike can make informed decisions. Whistleblowers are key to this effort.
What Can Whistleblowers Do to Protect our Planet?
Whistleblowers can be extremely helpful in stopping greenwashing, ultimately helping the environment, by exposing businesses that intentionally mislead the public. Comparing publicly available climate disclosures to insider information, whistleblowers are in a unique position to keep companies honest, and they need to be empowered by strong rules, guidelines, and protections.
The Securities and Exchange Commission (SEC), the federal organization responsible for promoting fair market activity and combatting fraud, recently proposed rule changes that would require public companies to disclose climate-related risks associated with their operations as we discussed in a previous Sunday Reading.
These changes, if enacted, would be extremely helpful for whistleblowers. Clearer guidelines are always beneficial to the public as companies become bound by stricter rules, and whistleblowers gain a better understanding of the types of violations they can report. NWC strongly believes it is important for the public to understand these requirements as anyone can be a whistleblower.
Current reporting standards require companies to make certain financial disclosures that become available to the public. These disclosures, provided through Form 10-K, currently include minimal climate-related acknowledgments, even though climate-related risks are extremely important to consider when making investment decisions. The proposal for additional disclosures would allow investors to make more educated decisions while also forcing companies to be honest about their climate-related impact, because whistleblowers would be able to deter companies from lying because they would fear being exposed.
What Would Companies Have to Report?
One of these proposed changes would require companies to disclose their internal carbon price. This price can be very complex, and refers to the damage to the environment that would be caused if a ton of carbon dioxide equivalent ( tCO2e) were produced. Some companies use this as a tool to guide their decisions regarding climate risks associated with business ventures. Requiring this reporting would enable the public and investors to know what the business is bassing decisions on and better be able to evaluate those decisions when deciding where to pu their money.
Specifically, companies would be required to disclose complicated and specific information. Whistleblowers are extremely useful in ensuring that companies display this type of information honestly. As experts and insiders, Whistleblowers are perfectly positioned to report misleading information and explain to SEC investigators exactly what the company is lying about and how the concerning statements are misleading. In addition, considering requirements that would force companies to explain how climate-related risks affect their financial decision-making process, whistleblowers are well-positioned to expose instances of corporate greenwashing and would be helped greatly by these rule changes. Whistleblowers can help expose companies that are intentionally misleading the public and investors by making claims outside of, or different from their 10K filings in order to appear “eco-friendly” when they are not.
Investors are increasingly interested in how a company’s environmental impact effects its bottom line, and these rules reflect that interest. These impacts both align with the public’s investment in protecting our planet, but also the trillions of dollars of anticipated crisis management and business adjustments that are foreseeable due to environmental realities. Whistleblowers will benefit greatly from this guidance because if these rules are adopted engineers, analysts, and other insiders will know what types of misleading conduct should be reported to the SEC and understand that they can report confidentially, with anti-retalition protections, and be eligible for any award. Whistleblowers are the key to preventing greenwashing in emmissions reporting and beyond.
There’s More than Just Air:
As Earth Day is approaching, it is important to note that there are many other environmental issues that whistleblowers can help address, aside from carbon emissions. NWC is particularly involved in deterring fraud associated with illegal wildlife trafficking, a practice that stands to make many species go extinct.
Wildlife trafficking refers to illegally traded fish, plants, and other wildlife. Wildlife crime can involve various types of criminal activity, including the illegal timber trade and money laundering. Through our Wildlife Whistleblower Pledge we are able to keep those passionate about supporting wildlife whistleblowers informed and empowered, you can sign our pledge here.
The industries connected to wildlife trafficking can be surprising. Illigal timber trade and illegal fishing negatively impact U.S. farmers and loggers and impact prices across markets. Illegal wildlife sales, which are rampant on social media, impact domestic species and put naïve pet owners at risk and pose major concerns related to public health. Unfortunately, wildlife impacts were not considered in the SEC regulations, but other laws such as the Lacey Act can be used by whistleblowers to report these violations regardless of where they live.
NWC continues to raise awareness about programs like our Global Wildlife Whistleblower program and legislation like the Wildlife Conservation and Anti-Trafficking Act of 2021. Realizing that biodiversity is extremely important to the well-being of our environment, NWC wants the public to be made more aware of how current practices are damaging different ecosystems, often leading to the extinction of many species. NWC is dedicated to educating the public so that everyone can use the law to protect our planet.
NWC’s Continuing Mission
NWC is committed to empowering whistleblowers who fight greenwashing and other environmental crimes and has shown dedication to increasing awareness concerning the ways that the public can be misled concerning climate-related risks. From supporting whistleblowers in the plastics industry to teaching everyday citizens how to fight environmental crime, NWC is continuing its mission to serve the public by protecting and advocating for whistleblowers, a group that is underrepresented and deserves public acknowledgment for the grave risks they face.
In honor of Earth Day and to raise awareness for environmental issues, NWC is hosting a panel featuring featuring three climate activists who will offer multiple perspectives on whistleblowing and the climate crises we face. Be sure to RSVP today to learn more about how courageous whistleblowers can stand up to corruption and other forms of misconduct to better our world.
Thank you for reading this edition of the Sunday Reading series. Please subscribe to our mailing list to be notified of new publications, share this article, and donate to support climate whistleblowers today.
This story was researched and drafted by NWC Intern, Shawn Robbins, a Sophomore double major in Economics and Sociology at University of California, Irvine.