The term ‘greenwashing’ has grown exponentially in recent times, to such a degree that it is now officially listed in the Merriam-Webster dictionary. With more scrutiny over climate pledges than ever, companies are starting to turn towards a new and worrying trend – greenhushing.
In the last year alone, allegations of greenwashing have been levied against several major companies and public figures, including Amazon, HSBC, Deutsche Bank, and even the mayor of London, Sadiq Khan.
Companies can use misleading marketing to intentionally manipulate a growing market of value-driven consumers. But, there are also instances of well-intentioned businesses falling victim to similar allegations as the result of unintentionally overstating their green strategy.
In a world where reputations can be easily destroyed, many companies are instead resorting to another tactic – Greenhushing.
But what is greenhushing?
To avoid accusations of deceptive sustainability marketing, or ‘greenwashing’, some brands and businesses now feel compelled to remain quiet about their environmental agenda. Choosing to sit quietly instead of highlighting their sustainable initiatives.
What reason would a company have to greenhush?
There are several reasons why companies turn to greenhushing, but the most common ones are the fear of being criticised for not doing enough, and the fear of being accused of greenwashing, which can lead to boycotts, increased staff turnover, and reputational damage.
According to environmental services provider Small99, some companies also greenhush because they feel that only a minority of customers are attracted to businesses because of their sustainability practices. Others feel that customers may even judge them to be of lower quality if they place an emphasis on sustainability, assuming the overall quality will be lower.
Which companies are greenhushing?
Generally, small businesses are the main culprits of greenhushing. This is because small businesses are often left out of sustainability reporting legislation, such as Climate-related Financial Disclosures (TCFD) requirements and the upcoming Corporate Sustainability Reporting Directive (CSRD) which is usually only applied to large corporations and public sector organisations.
However, research published by the South Pole last year revealed a trend towards greenhushing can also be linked to large corporate climate targets. The research surveyed 1,200 large businesses with net zero targets and found that 26% of the companies who had applied to the Science-Based Targets Initiative (SBTi) had not published information about the new targets on their own websites or reports.
Will changes in reporting help?
The upcoming, Corporate Sustainability Reporting Directive (CSRD) will replace the existing Non-Financial Reporting Directive (NFRD), and with it comes a wider pool of companies that are required to report. The directive includes a “double materiality” requirement. This would see organisations not only report the material impacts they have on the environment and society, but also the material impacts of sustainability and accompanying requirements and regulations on that organisation.
The media and green groups are more willing than ever to call out cases of corporate greenwash and therefore putting a transition plan into the public domain can feel daunting. But while some corporates are waiting for regulation to push them towards greater transparency, the finance sector is beginning to take note of the risks of greenhushing. deliberate or otherwise.
Chasing perfection
Investors and stakeholders are now actively seeking better ESG data, so understandably some companies may feel unconfident about sharing the lack of progress they may be making. This is evident in the fact almost 30,000 large businesses, collectively worth around $25trn, did not answer CDP’s requests for information in 2022.
One in four companies withholding climate strategies is enough for South Pole’s CEO Renat Heuberger to warn that the trend may be catching on.
“We see that sustainability-minded businesses are increasingly backing up their targets with science-based emissions reductions milestones, which is absolutely the right approach,” he said in a statement accompanying the report’s release. “But if a quarter today aren’t coming forward with details on what makes their target credible, could corporate green-hushing be spreading?”
It’s a simple chain: greenhushing can put companies at odds with their ESG goals; ESG goals are part-motivated by investors and other stakeholders; therefore, greenhushing risks putting companies at odds with their stakeholders.
With suggestions that the concept is now more popular, boards should embrace it as a wake-up call. They should know what the concept means and be crystal clear whether their organisation is using the strategy in its reporting.
Greenhushing is withholding information on climate strategy for fear that releasing it will bring some form of reputational risk. For some, it’s a way to avoid accusations of greenwashing. For others, it’s a sign that an organisation is already greenwashing. Boards should be conscious of the longer-term consequences of such an action, particularly in a corporate world more concerned by climate change than ever.
