Al Gore warned that the “the mounting threat of greenwash” poses a significant and increasing risk to a successful transition away from fossil fuels.

“There remains a yawning gap between long-term climate goals and near-term action plans” at both the corporate and government levels, the former U.S. vice president said, adding that the chasm encompasses more than just environmental issues. “Large emitters must increase their climate ambitions with renewed credibility and urgency. Likewise, developing countries urgently need substantial support on vaccine access, climate finance and debt relief.”

At the same time, sustainable investing has “entered the mainstream,” providing even more openings for potential greenwashing, said Gore, 73, currently chairman of Generation Investment Management. “We must be vigilant about the rising threat of greenwashing or risk derailing hard-won progress” that has been made in recognizing the climate crisis, he said.

Generation Investment has just published its fifth annual assessment about the transition to a sustainable economy. It cites data from national consumer protection authorities, which estimate that 42% of environmental claims have been “exaggerated, false or deceptive,” and might even violate fair practice rules established by the European Union. Separately, Gore’s firm said data from Climate Action 100+ show that about 53% of the 159 companies it tracks—which includes the world’s largest emitters of greenhouse gases—don’t have appropriate short-term targets for net-zero emissions.

The Generation Investment report draws on more than 200 sources to highlight key tipping points in the shift to sustainability—from the widespread adoption of net zero to action on diversity, equity and inclusion, and the rise of clean technologies and natural solutions.

First, the good news from the report:

• Sustainability-related fund flows from the financial industry tripled over the past five years, with more than 6% of global market capitalization volumes now projected to come from the green economy, up from 2% in 2015.
• Since 2015, the market has seen a 10-fold gain in new investments in environmental, social and governance funds.
• During the same period, there’s been an eight-fold increase in sustainable debt issuance, and a doubling of private equity and venture capital deal flow in the areas of sustainability.
• Today, governments that represent three quarters of global gross domestic product have made national-level commitments to net zero.

Second, the bad news:

• Many governments and companies remain lacking when it comes to setting interim net-zero pledges and short-term action plans.
• More than half of the world’s GDP—some $44 trillion of economic value—is at moderate or severe risk due to nature loss.
• There’s growing unease about the low quality of some net zero commitments because of the gap between goals and actions, and the absence of guardrails for those using natural solutions such as offsets to meet climate pledges.
• Consumers are often faced with confusing and misleading claims about the benefits of sustainability.

To be sure, the past year has presented huge opportunities for sustainable investing, as the enormous flows of capital to green bonds and renewable energy attest. But a failure to tackle greenwashing is hobbling the transition to a low-carbon economy, Gore said. “The time for celebrating vague, distant goals on net zero has long passed,” he said, adding that “investors now need clarity over how companies will turn goals into actions.”

For example, about half of the Fortune 100 companies mention biodiversity in their reports, but only five have made specific, measurable and time-bound commitments on biodiversity, according to Generation’s research.

Large increases in “the deployment of sustainability solutions” are needed to limit global temperatures to 1.5 degrees Celsius above pre-industrial temperatures, Gore said. For the environment, this means deployment rates must increase by five to 10 times over the next few years for technologies like electric vehicles, solar, hydrogen and wind power, as well as carbon capture and storage.

Sustainable investors “will do more harm than good if we fail to set a high bar,” Gore said.

This article was provided by Bloomberg News.