A recent study has revealed a disturbing trend among major European energy companies: nearly half of the environmental damage they cause, particularly to biodiversity, goes unreported in their official sustainability documents. The research, conducted by Goizeder Blanco-Zaitegi from the University of the Basque Country, exposes how these companies, despite being subject to European transparency directives, are systematically concealing their adverse impacts on the environment. This investigation sheds light on the pervasive issue of corporate greenwashing and the urgent need for stricter regulations.
The study analyzed nearly 50 events involving 30 of Europe’s largest energy companies, focusing on incidents such as deforestation, habitat destruction, and the electrocution of birds. Shockingly, the researchers found that 47 percent of these damaging events were not mentioned in the companies’ sustainability reports. Of the events that were reported, only 23 percent were disclosed in a clear and straightforward manner.
Blanco-Zaitegi, a Ph.D. student with the faculty of economics and business at the University of the Basque Country, led the study. She noted that while European directives require large companies to publish environmental and biodiversity-related documents, the specifics of what must be included are often vague. This lack of clear guidelines allows companies to selectively report on their environmental impacts, often downplaying or completely omitting the most damaging events.
“European directives oblige large companies to publish documents relating to the environment and biodiversity, but the information that has to be included in them is not fully specified. Each company decides which aspect to cover. So they act freely and soften their image,” Blanco-Zaitegi explained.
The study uncovered several strategies used by energy companies to minimize their responsibilities and divert attention from their harmful practices. One common tactic is the emphasis on positive environmental efforts, which often serve to obscure the negative impacts. For instance, some companies highlighted their tree-planting initiatives in areas far removed from the locations where they were simultaneously causing deforestation for biofuel production. This tactic of diverting attention creates a misleading image of the company’s overall environmental footprint.
In addition to emphasizing positive actions, companies also often shift the blame for environmental destruction to other actors, such as suppliers. This deflection of responsibility further complicates efforts to hold these companies accountable for their direct contributions to biodiversity loss.
The study also found that the transparency of reporting varied depending on the type of event. For example, incidents that involved human communities or easily quantifiable impacts, such as the electrocution of birds by power lines, were reported more accurately. This is likely because these events are harder to hide—humans can speak out, protest, and demand accountability, while the deaths of birds often result in fines that require accurate reporting.
However, when it comes to more complex and less visible issues, such as the destruction or transformation of ecosystems, companies are far less transparent. The study pointed out that when wind farms are constructed in migratory corridors, causing significant disruption to bird species, these impacts are rarely communicated clearly. The deeper and more difficult the effects are to measure, the more likely they are to be concealed.
The under-reporting and selective disclosure by energy companies have severe implications for biodiversity. The long-term consequences of these practices can lead to the collapse of ecosystems, loss of species, and a significant increase in pollutants that pose health risks to humans and wildlife alike. Moreover, the systematic greenwashing efforts of these corporations prevent the public and regulators from fully understanding the extent of environmental degradation being caused.
The findings of this study highlight the need for stronger and more specific regulations that require companies to provide complete and accurate reports on their environmental impacts. Current European directives, while a step in the right direction, are insufficient to ensure full transparency and accountability. Without stricter oversight, energy companies will continue to use sustainability reports as tools for public relations rather than as mechanisms for genuine environmental stewardship.
The study’s methodology, based on a counter-accounting approach, is noteworthy. Instead of relying solely on the companies’ sustainability reports, researchers first scanned external sources, such as news outlets, social media, and counter-information websites, to identify incidents that led to biodiversity loss. They then cross-referenced these incidents with the official documents of the involved companies. This approach allowed the researchers to uncover a significant amount of unreported or under-reported environmental damage, providing a more accurate picture of the companies’ environmental impacts.
Blanco-Zaitegi emphasized the importance of this approach: “Counter-accounting is used in matters relating to corruption and society. In the case of biodiversity, however, it is more recent and is very useful. In fact, companies tend to conceal information in official reports. It is true that our research has limitations because it is qualitative and because the perspective of us researchers comes into play, but to measure transparency it is essential to look at information that is not under the control of companies, and we have been as objective as is humanly possible.”
Blanco-Zaitegi’s final thoughts: “It is more difficult to be non-transparent when humans are involved. People, unlike nature, speak, protest and engage in confrontation. Such events have to be communicated.
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