Greenwashing in the US metal industry?

By combining satellite data and webAI information, ISTARI.AI developed a methodology to detect greenwashing in the US metal industry.

Jan Kinne

Due to the increasing consequences of climate change and political movements such as “Fridays For Future”, the topic of sustainability has become much more important in recent years. The emission of pollutants and the associated air pollution are particularly important in the collective discourse.  One of the most harmful substances is sulphur dioxide (SO2). The gas is released by processes in the metal industry, among others, and is a trigger for particulate matter formation and acid rain.

Social pressure and the need for a “green image” lead to many companies presenting themselves as particularly committed to “sustainability”. In this context, “greenwashing” refers to the discrepancy between a company’s positive image and its actual environmental impact. Companies that engage in greenwashing thus place a lot of emphasis on their image without actually implementing effective measures, which can be associated with high costs. One difficulty, however, is to detect such greenwashing. ISTARI.AI, in cooperation with researchers from the University of Salzburg, Heidelberg University, the University of Giessen, the Centre for European Economic Research and Harvard University, has developed an innovative approach to this problem. For this, the companies’ self-portrayal on their websites is linked to globally available pollutant data from the Sentinel 5-Precursor satellite.

Using ISTARI webAI, we examined the websites of around 9,500 companies in the US metal industry and classified the companies’ self-portrayals into two categories: “sustainable” companies and “non-sustainable” companies. In total, 760 companies were classified as “sustainable” (8.1%) and 51.3% as “non-sustainable”. A further 40.6% of companies in the US metal industry do not have their own website and were therefore not assessed by webAI. The map below shows an example of the distribution of the “sustainable” and “non-sustainable” metal industry in the Northeast of the USA. It becomes evident that there are some “hotspots” with a high share of sustainable companies, especially in the north of Chicago, but also e.g. in Pittsburgh and Buffalo.

In combination with the satellite data, it was shown that the self-reported “sustainable” metal industry actually had a lower impact on local SO2 concentrations than the “non-sustainable” companies. From this, the research team concluded that there is indeed no evidence of systematic greenwashing in the US metal industry. “However, this statement refers to the industry as a whole and not to individual companies. In individual cases, greenwashing will certainly occur,” says Sebastian Schmidt, first author of the study.

The development and provision of detailed and up-to-date company information on the topic of sustainability will be further expanded at ISTARI.AI. “We are currently working on being able to evaluate companies throughout Europe with regard to their positioning on the topic of sustainability. To do this, we are relying on our multi-lingual webAI, which can process over 100 languages. We are currently testing the results in cooperation with the OECD. Linking with satellite-based measurements will also become part of the ISTARI webAI,” says ISTARI founder Dr. Jan Kinne.

You can find more information about our project in the following publication:

Schmidt, S.; Kinne, J.; Lautenbach, S.; Blaschke, T.; Lenz, D. & Resch, B. (2022): „Greenwashing in the US metal industry? A novel approach combining SO2 emissions from satellite data, a plant-level firm database, and web text mining.“

Author: Sebastian Schmidt