02-October-2024-Editorial

GREENHUSHING: A GROWING TREND IN CORPORATE SUSTAINABILITY COMMUNICATION

In recent years, many companies have been certified as carbon neutral, taking significant steps towards environmental sustainability.

However, despite these achievements, several firms choose not to advertise their green credentials or future sustainability goals.

This practice, known as “greenhushing,” refers to the under-reporting or intentional withholding of environmental information.

Greenhushing is increasingly prevalent, driven by a range of factors including legal concerns, fear of backlash, and brand image management.

What is Greenhushing?

• Greenhushing occurs when companies deliberately withhold or downplay information about their environmental goals and sustainability initiatives.
• Purpose: Firms engaged in greenhushing avoid promoting their eco-friendly practices, often choosing not to disclose their achievements or future commitments to sustainability.

Reasons Why Firms Engage in Greenhushing

Litigation Concerns in the U.S.

• Risk of lawsuits: In the United States, publicly listed companies might face legal action if they are perceived to prioritize sustainability over shareholder profits.
• Legal consequences: The fear of litigation discourages open communication about environmental efforts.

Backlash Against ESG Efforts

• Political climate: In some conservative U.S. states, there has been resistance to ESG (Environmental, Social, and Governance) efforts, leading companies to downplay their environmental initiatives.
• Regulatory scrutiny: Firms avoid highlighting their sustainability goals to steer clear of political or regulatory backlash.

Concerns Over Product Perception

• Quality and price: Green products are often associated with lower quality or higher costs, which can harm the brand image if advertised too aggressively.
• Brand management: To avoid reinforcing negative consumer perceptions, companies may choose not to promote the environmental benefits of their products.

Avoiding Future Expectations

• High standards: Publicly discussing sustainability efforts can lead to increased scrutiny and expectations for more ambitious goals.
• Low-profile strategy: By staying silent, firms can avoid being held accountable for future environmental commitments.

Customer Discomfort

• Vacation mindset: In industries like tourism, companies avoid highlighting environmental issues, fearing it may disrupt the customer’s desire for a carefree experience.
• Business approach: Silence on sustainability efforts helps these firms maintain customer satisfaction without bringing attention to serious global challenges like climate change.

Fear of Greenwashing Accusations

• Reputation risks: Greenwashing—when a company falsely claims to be environmentally friendly—can damage a firm’s reputation.
• Defensive strategy: To avoid accusations of greenwashing, some firms prefer not to communicate their green achievements at all.

Lack of Consumer Demand

• Consumer awareness: Many consumers are not familiar with concepts like carbon neutrality, and few actively seek out eco-friendly products.
• Market reluctance: Without clear demand from customers, businesses may feel it is not worth spending resources on promoting their sustainability efforts.

Why Firms Still Seek Carbon Neutral Certification

Competitive Advantage

• Differentiation: Carbon neutrality can help firms stand out from competitors, attract talent, and secure better financial terms.

Social Relevance

• Public image: Firms aim to maintain their social relevance and build stronger ties with stakeholders, enhancing their public perception.

Ethical Commitment

• Moral responsibility: Some companies are driven by ethical reasons, seeking carbon neutrality because they believe it is the right thing to do.
• Environmental passion: These firms are motivated by a genuine desire to protect the planet and promote sustainability.

Concerns Related to Greenhushing

Growing Trend

• Global rise: Studies, such as one by climate consultancy South Pole, show that 58% of companies are reducing their climate-related communication due to increasing regulation and scrutiny.

Transparency Issues

• Lack of openness: When firms do not share information about their sustainability efforts, it becomes difficult to assess their progress in reducing carbon emissions.
• Accountability: The lack of transparency limits the ability to track and verify corporate climate action.

Slowing Sustainability Transition

• Global impact: The reluctance of companies to disclose their sustainability achievements may slow the adoption of eco-friendly practices, potentially weakening global efforts to combat climate change.

Domino Effect

• Fear of retaliation: Businesses may avoid sustainability initiatives due to concerns about backlash from regions or industries that oppose such efforts.
• Influence on others: This can deter other companies from adopting environmentally responsible practices.

Impact on Consumers

• Consumer choices: When firms remain silent about their sustainability efforts, it may lead consumers to continue purchasing products that are less eco-friendly.
• Demand for green products: This could inadvertently slow the demand for sustainable alternatives.

Addressing Greenhushing

Promoting Sustainability as a Journey

• Open communication: Companies should frame environmental sustainability as a continuous journey rather than a one-time goal.
• Engaging audiences: By sharing their progress and future goals, firms can reduce the risk of criticism and greenwashing accusations.

Stronger Regulations and Guidelines

• Clear rules: Implementing robust regulations, such as the EU’s Greenwashing Directive, can help companies navigate sustainability communication without fear of misleading consumers.
• Level playing field: These regulations can enhance trust, providing consumers with accurate information and preventing deceptive advertising.

Educating Consumers on Sustainability

• Awareness campaigns: Increasing consumer knowledge about sustainability and carbon neutrality can help reverse negative perceptions about green products.
• Informed choices: Well-informed consumers are more likely to choose environmentally responsible companies, driving demand for sustainable products.

Conclusion

Greenhushing is a growing trend among companies that are reluctant to advertise their environmental achievements due to concerns about litigation, greenwashing accusations, and consumer perceptions.

While firms may become carbon-neutral certified for competitive, ethical, or reputational reasons, many choose to remain silent about these efforts. Addressing greenhushing requires stronger regulations, consumer education, and a reframing of sustainability as a continuous process.

Transparency in sustainability efforts is crucial to accelerate global transitions towards eco-friendly practices and combat climate change.