A new report has brought the practice of “green hushing” back into the spotlight and raises questions about long-term effects on business climate strategies.
The term was created by consulting firm Tree Hugger in 2008 when they recognised that many companies they met were reticent about publicising sustainability initiatives.
It’s resurfaced with publication of a study by Swiss carbon finance consultancy South Pole – Net Zero and Beyond – which advises that 72% of the 1,200 private companies surveyed in 12 countries and 15 sectors have set emissions targets in line with global climate goals.
But the survey also identified that nearly 25% of the companies were not planning to shout about their plans. The report says: “Nearly a quarter of those surveyed . . . will not be publicizing their achievements and milestones beyond the bare minimum or as required by for example the Science Based Targets initiative.”
This green hushing – deliberate under-reporting of sustainable practices – is in a way the distant twin of greenwashing. Instead of bragging to the point of mistruth about eco-friendly actions and plans, companies are hiding away the best of their climate mitigation strategies and practices.
Focus on ESG
Green hushing stems from a fear of falling foul of regulations, and/or being called to account by climate activists, so being viewed by customers as overstating eco activities, with a significant impact on profitability.
The increasing focus on Environmental, Social and Governance (ESG) that informs investment decisions is a key factor in the current resurgence of green hushing.
Underlying this is the anxiety that promoting the adoption of science-based climate targets or any progress towards meeting them could be too rigid while also being over-ambitious. This is where the concerns then arise, that disclosure exposes companies to regulatory enforcement and civil litigation challenges around issues of greenwashing.
Businesses globally are all acutely aware of some commercially painful outcomes from the post-COP26 stampede by many companies to promote their sustainability strategies after the climate summit in Glasgow last year. The over-enthusiastic actions swiftly led to legal action around greenwashing in advertising, notably against oil company TotalEnergies and at the same time financial regulators are taking action against at ESG-branded investment funds for poor oversight.
Given the intense scrutiny on climate-abatement strategies, it’s not so surprising that the status of commercial measurement frameworks for sustainability are being closely examined. This includes the gold-standard Science Based Targets initiative (SBTi), de facto arbiter of business climate action, which faces questions potential conflicts of interest and complaints on governance.
According to the FT, companies could be tainted by the procedure with the SBTi, whereby they pay $9500 to have their climate targets assessed. Clearly this seems a harsh view, given the ubiquity of commercial accreditation payments.
The FT also reports that may not be disclosing climate targets due to the political environment in the regions where they are based. Last year, Texas passed a law attacking ESG investing for damaging the fossil fuel industry on which the state relies economically. This year it accused BlackRock and 9 other financial groups of boycotting oil and gas.
However, despite current conditions and concerns, no company can embrace non-reporting or under-reporting climate targets as a long-term strategy if they wish to be sustainable. Regulators in Europe now require it, with regulation in the US looking very likely, all of which build on a decade or more of pressure from institutional investors.
The fear remains though that green hushing might over time lead to analysis paralysis as companies seeking a perfect climate strategy pull back from actions that just might land them with regulatory or brand-tarnishing problems.
Balanced against that is the undeniable fact that the cost of climate inaction grows daily and 2022 is the cheapest year make a move towards net zero.
And it’s also important to remember the progressive adoption of comprehensive sustainability strategies by companies around the world. Despite the South Pole survey’s identification of a trend for non-disclosure by a minority of the companies surveyed, nearly three-quarters of responding companies have set or committed to a science-based target to reduce emissions.
What’s more, a further 18% plan to implement targets in the next year, while 67% have both a net-zero target and an SBT. An example of an SBT commitment for a financial institution would be the alignment of in-scope assets under management to 2.19°C by 2030 and 1.5°C by 2040.
While corporates pursue climate-friendly policies with more caution and less noise, smaller businesses face similar issues around green hushing.
For many SMEs sustainability certifications seems to remain unattainable on economic grounds but environmentally conscious customers increasingly search for certification to confirm the legitimacy of sustainability practices. Lack of certification can undermine the confidence of small businesses in their sustainability initiatives and can lead to reluctance to report.
For other companies, green hushing is simply because they view climate action as still being a minority interest with customers caring more about personal benefits and experiences in their choice of business. Some businesses feel the focus on eco action might lead customers to judge them as an inferior brand.
A study of 31 tourism businesses in the Peak District which had been awarded the Environmental Quality Mark, identified that only 30% of their sustainability actions were communicated to customers. And a 2016 survey of over 2,000 hotels across 44 countries highlighted that only 48% of respondents had a page on their website dedicated to sustainability practices.
But the UN’s Sustainable Development Goals (SDGs) emphasise the need for companies to be transparent in their sustainable initiatives as they play a vital role in influencing market change. Corporations set a standard and transparency inspires as well as communicating new ideas around sustainability.
Companies that green hush also run the risk of missing out on attracting new investment from investment groups that rely on extensive, accurate ESG reporting to guide where they place their funds.