The news: The European Commission said it would abandon efforts to pass a law against corporate greenwashing, citing a “simplification agenda” to remove red tape and make the EU more attractive for business.
Why it matters: The EC’s decision to scrap the proposed law marks the latest blow to the global environmental movement, which is losing ground in the corporate world as governments shift focus and conservative activists push companies to scale back their sustainability initiatives.
As with diversity, equity, and inclusion (DEI) policies, the US government’s current hostility toward green regulations and practices has enabled companies to walk back some of their prior commitments.
- PepsiCo said its decision to push back some of its climate goals by as much as a decade stemmed from the fact that many of the regulatory and policy shifts it expected when setting the targets in 2020 failed to materialize. The company pointed to inadequate recycling, reuse, and EV charging infrastructure as some of the external challenges, in addition to “varying and changing government approaches.”
- Walmart cited similar barriers to meeting its plastic and recycling targets for the year. Per a company update, while the retailer has “made significant progress toward our ambitious 2025 goals,” it expects to “fall short of achieving” them due to “many factors” beyond its control, including public policy, infrastructure, and changes (or lack thereof) in consumer behavior.
Our take: Many companies will take the easing of environmental oversight in the US and the EU as an excuse to water down their sustainability initiatives. That could lower costs in the short term—but at the risk of alienating the large swath of consumers who factor sustainability into their purchase decisions and are quick to identify greenwashing.
Go further: Check out our Data Drop: 4 Charts on Sustainability and Consumer Behavior.