Speak up or shut up?

Chris Seekings investigates the rise of corporate ‘greenhushing’ as companies look to downplay their sustainability credentials

With consumers, governments and investors increasingly wary of companies publicising their sustainability credentials amid accusations of greenwashing, a new trend is emerging. A recent poll by consultancy firm South Pole found that one in four large companies with science-based net-zero targets have decided not to publicise them, and separate research has uncovered similar findings.

As a result, more sustainability professionals are now discussing ‘greenhushing’ – the practice of downplaying climate and environmental policies out of fear that they will be perceived as insincere, or as deliberately deceiving the public in pursuit of higher market share and profit.

Although the term was first coined as far back as 2008, it is likely that we will see more firms staying silent on their sustainability credentials this year. “I’ve seen a really big shift from 2018, when we had the big boom in everyone saying ‘Let’s sign up to this new alliance and let’s commit to this ridiculous proposition’,” a contact who advises large companies on sustainability and governance tells me. “CEOs were thinking, I’m not going to be here in 2050, so all these promises will be someone else’s problem. The risk of making a false promise is so much higher now.”

Eco scrutiny

A huge driver of this trend has been the impact of new regulation and government scrutiny. The UK’s Competition and Markets Authority last year opened an investigation into how products and services claiming to be ‘eco-friendly’ are being marketed, and whether consumers could be being misled. Meanwhile, new EU legislation could soon prohibit companies from making generic or vague claims about environmental performance that cannot be backed up.

There is also additional pressure from investors, who want to be sure they are not funnelling money into companies that could be accused of greenwashing. “The impact of regulations, and of their own investors, is growing quite significantly,” my contact tells me. “They might be mid-sized companies, but they’re looking at European regulations, the impact of the Task Force on Climate-Related Financial Disclosures, and being asked questions about their sustainability claims by large investors like BlackRock.”

The public backlash

Caution when publicising sustainability credentials shows that many companies are starting to take the issue seriously, rather than simply trying to entice new customers. Public pressure has also driven greenhushing. A survey by consultancy firm Sensu Insight found that just 23% of the UK public take environmental, social and corporate governance claims at face value, while 14% typically disbelieve them.

However, these people may well be among the first to voice their anger if businesses are seen to be doing nothing on the climate and environment, leaving sustainability professionals caught between a rock and a hard place. “The impact of consumer mindset changes in the past three years is massive, and companies are reluctant to make promises they can’t keep,” my contact says. It is also the responsibility of companies leading on the climate and environment to inspire others to follow in their footsteps, and greenhushing could be seen as a failure of leadership.

Total transparency

As well as failing to inspire others, companies that practise greenhushing may themselves be accused of adopting a more sophisticated form of greenwashing if they are perceived as being deceptive and avoiding scrutiny. This idea was explored in a January report by the think tank Planet Tracker (see bit.ly/3XfntOZ).

The solution is transparency – backed by evidence – so the public, governments and investors can see all the outcomes of a business’s operations, whether it be turnover, profits, carbon footprint, biodiversity impact or effect on society, and make decisions objectively. Although greenhushing may have unintended consequences, it could be a sign that the era of misleading corporate jargon is dead, and that honesty is starting to prevail as businesses get serious about their impact. They have no choice.