We are finally closing the chapter on Big Oil. While it's taken incredible destruction to get us here, there's finally momentum to clean up the mess left by our petroleum dependency, and build a more sustainable future. Startups are pouring into the scene, and money is pouring into startups.
I’m sure most of the founders of these greentech, climate tech and sustainability startups have the best of intentions. Yet some of these startups are using the exact same greenwashing tactics used by the incumbents they want to disrupt.
This is extremely dangerous for our efforts to protect the climate. If the oil companies are not doing enough, governments are too slow, and startups cannot truly disrupt the industry, then who will tackle humanity’s biggest threat?
Here are a few strategies used by startups that are reminiscent of those used by oil companies to deflect responsibility and delay action.
Outsourcing the problem
A myriad of carbon offset platforms are popping up and “disrupting and democratizing voluntary carbon offsets.” This mechanism is very similar to Big Oil’s strategy of shifting responsibility to the end consumer. Moreover, many software creators leave the real innovation and hard work to someone else; they are nothing more than a platform. Scratch a little deeper than the shiny app, and you see third-party projects of arguable impact. Gamifying CO₂ offsets also creates the completely wrong incentive, by actually encouraging consumers to have a larger carbon footprint, so they can plant more trees.
To believe that offset platforms will solve climate change is to say that Uber would lessen emissions by reducing reliance on personal automobiles, or that Airbnb solved the housing crisis in the world’s biggest cities. Spoiler: it doesn’t, and it didn’t. Software is just the packaging, below — someone still needs to do the messy work. In the case of the climate crisis, the bottleneck is not the lack of marketplaces, it's the lack of high-quality offsets. I sometimes half-jokingly say that by now, there are more apps to buy CO₂ offsets than tonnes of CO₂ actually removed from the air.
To believe that offset platforms will solve climate change is to say that Uber would lessen emissions by reducing reliance on personal automobiles, or that Airbnb solved the housing crisis in the world’s biggest cities.
Distracting the public
A second strategy is to distract the (often not fully-informed or confused) consumer with shiny props that are either not yet operational at an industrial scale or will never be operational at the scale needed to solve the size of the problem. With these projects, the true carbon impact tends to be inversely correlated with the marketing promise.
The pinnacle of this category are diamonds made from CO₂ captured from the atmosphere. Technically, this is possible, but practically, it doesn’t make any sense. Diamonds are weighed in carats, multiples of 0.2 grams. Global yearly CO₂ emissions are around 40bn tonnes, which is 200 quadrillion (million billion) times larger. Needless to say, air diamonds are not going to get us very far in saving the planet.
Synthetic fuels — fuels that can be used with internal combustion engines but have a carbon-neutral manufacturing process — are another example. The aeronautics and oil industry uses them as an excuse to not change anything about the business model of air travel, shifting responsibility further in the future. Yet the current production of synthetic fuels is nowhere near the consumption of aviation fuels, and there is no clear path ahead. Again, it’s like trying to drain the ocean with an eyedropper.
'Sustainability’ as the new ‘blockchain’
Because so much funding — both private and public — is flowing into sustainability initiatives, there is bound to be greenwashing as founders co-opt the term to get in on the action. This reminds me of the blockchain craze years ago: slapping on a label to please a wider range of investors. It is also reminiscent of the oil industry’s lobbying efforts to frame natural gas as a ‘bridge fuel’ for the energy transition.
This is exacerbated by the fact that the field desperately needs hardware startups for sustainable infrastructure projects. From my own experience, this scares investors. From the very beginning, hardware startups require more capital and carry more risk than software startups. The physically moving parts are harder to operate and scale and the path to profitability is long. However, a fundamental change cannot be cut short by a simple app.
With climate-related natural disasters happening at an ever-increasing rate globally, and the window to turn back the clock closing soon, all sustainability startup founders and investors need to look in the mirror and be honest with themselves.
Are you using the green filter with moderation? Are you putting more effort into actually reducing CO₂ emissions rather than convincing your customers or partners?
At some point, you may be held accountable in the same way Big Oil is being held accountable now. Most importantly though, in the end, even if you can convince all your stakeholders, you won’t fool Mother Nature with greenwashing. In the end, She will decide whether our collective actions were enough.