by: Caroline Kelleher | June 18, 2024
Decades of pressure to take action on sustainability issues have led organizations to report on the sustainability of their products and organizations. Until recent years, there was little pressure or regulatory need to disclose any metrics around these claims, and sustainability could be invoked as a tactic to differentiate a product or company without having the data to back up the claim. This practice of overstating environmental attributes has become known as greenwashing.
Recently, a similar term has emerged: Greenhushing. Companies across the globe are stepping back from communicating sustainability goals amidst fears of heightening scrutiny from customers, regulatory bodies, and investors. Rather than make exaggerated environmental claims, as in the case of greenwashing, some organizations are now deliberately under-communicating or not publicizing their environmental efforts whatsoever. This can take the form of setting science-based targets but not publicizing them, quantifying but not reporting carbon footprints, or avoiding making ‘green’ claims at all, even for products and services with improved environmental attributes.
While greenhushing can seem like the opposite approach to greenwashing in ESG communication, it still results in misleading stakeholders through omission, rather than exaggeration.
Why Are Organizations ‘Greenhushing’?
Several factors might influence an organization’s decision to scale back on climate and ESG communications, from avoiding scrutiny or controversy to the threat of legal repercussions.
Organizations may be caught in a paradox regarding the public reception of their climate communications. If their targets must be ambitious and climate progress needs to be on track with their goals, they risk heightened scrutiny from stakeholders who think they must increase their efforts in the fight against climate change. Conversely, they may upset stakeholders at the other end of the spectrum who oppose any ESG action, believing they shouldn’t participate in this agenda.
Meanwhile, a rapidly changing regulatory landscape has led to uncertainties that may deter companies from being more forthcoming with climate disclosures. Within Europe, the Green Claim Directive[1] seeks to address false environmental claims and combat greenwashing – a side effect of this may be tempering legitimate environmental claims out of fears and repercussions of claimed greenwashing. Within the United States, some disclosures within the SEC climate rules[2] are required only for organizations pursuing certain activities such as target setting or transition planning. In contrast, these disclosures are not applicable for some organizations not setting targets. While this may not impact communication in the long term, it could lead to delays in disclosures.
What Are the Implications of Greenhushing?
While it is good practice to avoid blatant greenwashing claims, the impacts of halting all climate communications for fear of scrutiny could be detrimental to climate action. The loss of robust reporting around climate targets, actions, and strategies has impacts beyond the businesses failing to report. Leaders inspire action, and if fewer sustainability-focused organizations are taking the initiative to report on what they are doing, there may be less incentive for peers or climate skeptics to meet the standards the leaders are setting.
This loss of competitive pressure could stagnate climate progress across industries and decrease the pressure on big emitters. Reducing communications means fewer opportunities for organizations to share ideas publicly, meaning valuable lessons learned, best practices, and other innovative ideas might not get the traction they otherwise could in a public forum. Organizations practicing greenhushing also forgo the opportunity to lead honest discussions around the successes and challenges of climate action and progress towards net-zero, opening yet another path for knowledge exchange between peers. Ultimately, silence around ESG initiatives and action could stall climate progress.
How Much is Greenhushing Happening?
The uptick in conversations around greenhushing came from a report[3] on climate-conscious companies, which stated that nearly half of those surveyed said external communications on climate targets have become more difficult in the past year and will decrease climate communications as a result.
However, these findings are not definitive. A 2024 report from the New Climate Institute[4] questions the evidence behind greenhushing, finding that some of the reduction in communications could come from the retraction of unsubstantiated carbon neutrality claims. As organizations work to align with emerging regulations and stricter voluntary standards, they retract unsubstantiated claims in favor of more transparent targets. The reality is likely more nuanced than a simple label of greenwashing or greenhushing.
The drivers for climate action and reporting still seem to be more robust than those for greenhushing. The combination of customer demands to set net-zero targets, investor requests, and regulatory requirements to report on climate-related risks means that climate action and reporting will still move forward.
Many companies have net-zero targets in place, dedicated funding, and resources to achieve these targets, even if they do not publicly advertise their goals.
How Should Companies Approach Climate Communication?
Despite the pressures that might push an organization towards greenhushing, several factors could help an organization manage climate communication risks:
- Strengthen Internal ESG Programs
- Businesses should prioritize implementing and maintaining robust and effective internal ESG policies and programs. Integrating sustainability practices into the core business strategy will demonstrate a commitment to climate action and risk management while ensuring a company has the knowledge and resources to address challenges proactively.
- Stay Up-To-Date On the Changing Regulatory Landscape
- Having teams dedicated to monitoring existing and upcoming ESG-related regulations at the local, national, and international levels will ensure that companies have time to adapt proactively to new requirements.
- Have Data to Back it Up
- To ensure that you can talk the talk, you must also walk the walk. Before focusing on how to report and communicate climate action, there should be a focus on what that action is. Efforts should be made to measure and reduce emissions across a company’s value chain, using science-based targets to guide that ambition and well-established methodologies and protocols to guide quantification.
- Honesty is the Best Policy
- Transparency and accuracy are essential in climate communications. Having an integrated ESG program that can guide both climate action and the communication and reporting of that action will help avoid risky situations with unsubstantiated claims or overstated achievements.
Striking a balance between transparency and risk management is essential, and organizations must find ways to communicate their sustainability goals and climate action without falling into the traps of either greenwashing or greenhushing. In such a pivotal time in the climate crisis, the need for collaboration and inspiration amongst peers has never been greater. Sustainability communication and reporting provide a crucial platform to help drive this change.
ClimeCo has experts to help navigate the changing landscape of Regulatory Compliance & Policy Advisory and ESG & Climate Strategy Consulting. We offer guidance for setting and meeting sustainability targets and crafting effective messaging to accurately reflect your efforts and commitments. Please contact us today to get started!
Works Cited
[1] Resourcify – Unveiling the Green Claims Directive and Its Impact for Businesses
[2] U.S. Securities and Exchange Commission – SEC Adopts Rules to Enhance and Standardize Climate-Related Disclosures for Investors
[3] The Washington Post – Why Some Companies Quietly Hide Their Climate Pledges
[4] New Climate Institute – ‘Greenhushing’: an emerging trend or sign of less greenwashing?
About the Author
Caroline Kelleher is a Senior Associate on the Sustainability, Policy, an Advisory team at ClimeCo. Her work focuses on decarbonization strategies, including target setting, abatement and transition planning, and implementation strategies. Caroline holds a Master of Environmental Studies from the University of Pennsylvania.
