Greenwashing is rampant among many iconic brands. Here’s how Allbirds avoids it

Many companies’ net-zero and decarbonization plans are often more about greenwashing than real progress. Keurig Dr Pepper, for instance, recently claimed a 12% reduction in supply chain emissions for 2023. However, an independent analysis of its numbers found that those emissions actually increased by at least 14%. Delta Airlines once claimed to be “the world’s first carbon-neutral airline,” yet a lawsuit alleges that about half of the offsets they purchased to achieve this goal were invalid, and some projects might have even generated emissions.

While genuine corporate action is crucial in fighting global warming, the truth is that most companies’ communications about their net-zero plans are suspect. For instance, while about 50% of the 2,000 largest publicly traded companies in the world have net-zero goals, only a few have provided credible plans to reach those goals, leaving many questions about whether they’re achievable to not.

Selective Accounting and Distant Time Horizons

One major issue with net-zero goals is selective accounting. Many companies only present emissions data from part of their supply chain, aiming to appear that they’re making more progress than if one were to look across their entire business. Keurig Dr Pepper for example, only included select PET and glass packaging in their reported “decrease,” ignoring many of the other sources of emissions they should account for, according to the leading framework they claim to follow. While company representatives defend this choice as within the guidelines, and that their approach is similar to peers, the fact that they broadcast these “accomplishments” does raise questions about their authenticity. Amazon is often accused of being a particularly egregious selective accounting greenwasher, for instance only reporting the emissions of its own branded products, which account for just 1% of its sales.

Another significant problem is the setting of distant goals. Many companies aim for net-zero by 2050, which seems reasonable on the surface, as that aligns with the UN’s goal for countries. But in addition to usually lacking specific plans, these far-off goals fall beyond the tenure of current CEOs or sustainability officers, making them less likely to be achieved.

Further, executive compensation and other incentives are focused on short-term returns, making it unlikely such areas of longer-term focus will ever be adequately addressed. Even fossil fuel companies like Exxon have publicized their aspirations of reaching net-zero by 2050—an impressive (albeit questionable) promise, given that it’s responsible for over 750 million tons of greenhouse gas emissions per year, about the same as Germany.

Allbirds: A Model for Genuine Action

But there are companies that are aiming to be more comprehensive and setting new standards for how to account for emissions in an authentically end-to-end way.

In my research on corporate sustainability, one company that has stood out for taking an especially thoughtful and rigorous approach is footwear and apparel producer Allbirds. Even amid challenges in the direct-to-consumer sector, the company remains focused on climate action.

First, instead of selectively carving out certain activities to report ostensible “progress,” Allbirds starts by examining the entire lifecycle of its products, from materials and manufacturing to transportation, product use, and end-of-life. This may sound simple and obvious, but it is rare given the lack of transparency in extended supply chains today. Beginning in this fashion, and looking across the entire value chain, allows Allbirds to gain an accurate understanding of the carbon emissions of each aspect of both its production and distribution processes, which also allows them to better see the levers to reduce emissions.

Hana Kajimura, Allbirds’ former head of sustainability, explained to me that they consider every input, asking questions that explicitly focus on emissions reductions, such as: “‘What if our wool was all from regenerative agriculture?’ ‘What if our factories ran on 100% renewables?’ ‘What if our customers were washing and drying our product less often?’ ‘How much would each of those things contribute to a reduction in our carbon footprint?’”

Part of what makes Allbirds unique in this respect is that the company’s products have relatively few inputs and they have purposefully engaged partners from the raw material stage, rather than relying on the long and complex supply webs of most companies. Given recent regulatory changes in the EU, such deep visibility will become increasingly important.

As a result of the design of their production processes and this type of analysis, Allbirds is better able to connect the dots between their goals and actual decarbonization plans. For instance, it announced 10 specific commitments for materials and practices by 2025, including sourcing 100% regenerative Merino wool, reducing raw material use by 25%, and using 100% renewable energy at owned and operated facilities. Allbirds also educates consumers on lower-impact ways to clean their products. Together, these efforts aim to reduce both direct and indirect emissions by 42% by 2030.

Importantly, Allbirds is transparent about its progress, publishing detailed reports on its carbon footprint and sustainability initiatives. In 2022, for example, the company detailed that it had completed 27 initiatives, achieving a 19% emission reduction. This type of specific listing of initiatives fosters trust and accountability among stakeholders and ensures reporting is not just a more sophisticated form of greenwashing.

Toward a Blueprint for Meaningful Action

While many corporate net-zero plans are flawed, companies like Allbirds show that meaningful climate action is possible. Their approach has three key steps: (1) starting with the current situation across the entire value chain, (2) setting near-term, specific goals that connect to plans, and (3) being transparent about progress. These offer a blueprint for other companies to move beyond greenwashing and make a real impact in our fight for a sustainable future.