This post originally appeared on Forbes on March 30, 2023.
ESG, which stands for "environmental, social and governance" is the hot business acronym making the rounds right now. As ESG grows more prominent in the dialogue with both consumers and shareholders — with a particular focus on the environment— many companies are making net zero promises. More than a third of the world's largest companies now have a net zero target in place, and 84% of companies are planning to increase their investment in sustainability initiatives.
Companies are keen to promote their "greenness" to customers. Or, in some cases, the perception that they are green. On one hand, Patagonia is a shining example of how to run an ethical and sustainable business. They made headlines last fall when the founder announced that he had transferred company ownership to a trust and non-profit dedicated to fighting climate change. On the other hand, many businesses still engage in rampant displays of greenwashing.