Photo (L to R) – Garrett Bond (Senior Director of Analytics, Ringer Sciences), Dr Lucy Walton (CEO, Connected Impact) and Taylor Schott (Senior Manager – Analytics, Ringer Sciences), who conducted the report research. Photo: Business Wire
From Business Wire • Reposted: July 11, 2024
New research suggests that almost six in ten (58%) of the top 100 largest public and private US companies are responding to greenwashing concerns by keeping quiet on genuine ESG progress.
With global ESG assets surpassing $30 trillion in 2022 and 85% of investors reporting that ESG assets lead to better returns1, companies that remain quiet may be missing out on potential investment opportunities and consumer demand2.
The Transparency Index 2024 report, published by data insights company Connected Impact, and data science consultancy Ringer Sciences, reviewed over 600,000 corporate communications from 200 companies to identify the “transparency gaps” between what businesses communicate on social media about ESG topics, and what they factually disclose about their targets and performance in annual reports, websites and other corporate documents.
The findings reveal only 2% of US companies “over promoted” their ESG progress, with 58% “under promoting” and disclosing more factual data on ESG than promoted. In a climate of stringent regulatory scrutiny, where mistakes can result in fines and reputational damage, companies may be hesitant to promote their legitimate ESG credentials due to fears of greenwashing accusations. This puts them at risk of “greenhushing” – where organizations choose not to publicize details of their climate targets, or their plan to reach their targets, to avoid scrutiny and allegations of greenwashing.
Dr. Lucy Walton, CEO of Connected Impact, said: “Businesses are under increasing pressure to avoid greenwashing – with increasing regulations and potential fines for those who misrepresent their legitimate ESG efforts.
“But businesses must also take action to avoid ‘greenhushing’. Our data reveals that businesses are more likely to under-promote than over-promote their ESG initiatives. This cautious approach can deter investment and undermine credibility.”
Only four in ten (40%) of companies offered a “balanced” picture, with a minimal transparency gap. The report argues that businesses with a small gap are more trustworthy than their peers. The report examined emissions, ethics, diversity and inclusion topics to represent E, S and G criteria. Emission disclosures had the largest gap, with 67% of companies disclosing more on emissions than they communicated. While governance had the smallest gap, with 40% of companies having a gap between their ethics discloses and communications.
Dr. Walton added, “ESG transparency is currently a missed opportunity for the top 200 businesses in the UK and US. We know most consumers favor responsible brands and transparent businesses. We know a well-governed transparent business attracts more investment and top talent3. This report equips businesses to identify – and close – transparency gaps so we can all make better decisions about where to invest our money, time and attention.”
By Emma Lewis from Sustainable Brands • Reposted: April 10, 2024
s we work to find a balance between greenwashing and greenhushing sustainability claims, here are several tips for brands to keep authentically guiding consumers toward better purchases.
Easter. A time for fun and family time, or a case of excessive consumerism? It’s no secret that Easter candies, chocolates and gifts often come in plastic, non-recyclable or multi-material packaging. Consumers can find themselves caving to the pressure of the yearly egg- and treat-buying ritual, and in an ethical conundrum where the build-up of waste is almost inevitable. But are brands doing enough to encourage sustainable behaviour in the frenzy?
Only last year, the UK Advertising Standards Authority (ASA) began stamping down ongreenwashing — introducing new guidelines and issued a record-breaking 29 formal rulings on sustainability issues, notably banning adverts by airlines including Air France, Lufthansaand Etihad for portraying a misleading picture of their environmental impacts. This year, the ASA is focusing on the food and beverage industry and has introduced new AI tools to help identify and evaluate claims from brands making sustainability assertions.
Yet, these greenwashing countermeasures may have inadvertently swung the pendulum towards ‘greenhushing‘ — with some companies not actively promoting their sustainability progress to avoid criticism. This may create the unintended knock-on effect of limiting sustainability action and instituting a vicious cycle where such activities are deprioritised.
Sustainability and shopping — a dichotomy?
Shopping sustainably should be a seamless and stress-free experience. But complexity can burden shoppers with a myriad of products, promotions and promises — particularly during holiday seasons. Confusing consumers around the meanings of terms including ‘carbon neutral’, ‘compostable’ or ‘recyclable’; or by over-egging their sustainable offer and listing an overwhelming number of sustainable practices intensify the complexity.
By applying a philosophy of simplicity when integrating sustainable claims, brands can make it intuitive and easy to engage with. This is a win for the consumer — which, in turn, is a win for the brand; and ultimately, a win for the planet.
Simplifying your sustainability claims
Brands ought to consider how to authentically embed sustainability credentials into their business strategy, product offering, portfolio approach and manufacturing in a way that is simple and standardised. They should then communicate these successes clearly — when they have the power to influence other brands as well as the sustainability footprint of millions of consumers, getting it right matters. Take IKEA — its ‘People & Planet Positive’ sustainability strategy is embedded into all of its business practices; and the brand clearly outlines itsambitions and commitments.
The below considerations should be key for any brand looking to become a beacon for sustainable business and attract like-minded partners and consumers.
Design
On-pack sustainability credentials should be direct, provable and to the point. Don’t bombard the pack with too much information, as this will only increase shopping stress. Streamline product packaging and eliminate unnecessary layers and components that will contribute to waste. In terms of the actual product, consider using minimal, eco-friendly packaging materials and durable, high-quality items. There are alternative materials out there which are both sustainable and innovative — think seaweed plastic or shrimp-shell polystyrene!
Digital transparency
Incorporating QR codes into packaging and marketing materials provides easy access to more detailed information about sustainability terms, sustainable practices and the supply chain. Link these codes to a dedicated webpage or digital platform to enable customers to learn about environmental initiatives, product lifecycle, and tips for reducing waste.
Local & domestic sources
Domestically or locally source products and materials to secure and simplify your supply chain, reduce your carbon footprint and support the community. This enables companies to build an authentic story into the brand — after all, people don’t buy products; they buy stories.Patagonia is a key example of a brand built around locally sourced materials and fair labour practices, working directly with farmers wherever possible.
Forge partnerships
The above point also rings true when developing brand partnerships. Actively participate in initiatives that contribute to reforestation, renewable-energy projects, or other sustainable practices.
By simplifying your brand offer, consumers are less likely to be overwhelmed by decision paralysis and be more thoughtful about purchases. Instead, consideration is made towards important sustainability factors — such as the supply chain, manufacturing processes, materials used and impact on local communities.
Empower consumers
While brands should make every effort to embed sustainability initiatives, consumers should also be making a conscious effort to join up with brands — the brand sets the target and consumers finish the race.
For example, if a brand communicates its involvement in a closed-loop recycling system, it should also provide recommendations for how consumers can do their own due diligence and participate. This could be through recycling collection programs, reusing or repurposing packaging materials, or supporting brand take-back programs that accept products back for recycling or refurbishment.
Brands, this Easter and throughout the year … while it’s tempting to cave to pressures to enhance your sustainability credentials, you must consider the authentic reasons you are evolving for the future. Take meaningful steps to tangibly simplify the customer experience and your own practices at the same time.
For decades, environmental advocates have been pushing back against “greenwashing,” when polluting companies misleadingly present themselves as environmentally friendly. Governments are finally starting to tackle the problem with stricter regulations: The European Union agreed to ban deceptive environmental ads in September, and the U.S. Fair Trade Commission is in the process of updating its guidelines around green advertising.
But as new rules go into effect, they’re contributing to a different problem: Many companies, even honest ones, are afraid to talk about their work on climate change at all.
The practice of “greenhushing” is now widespread, according to a new report released last week by South Pole, a Switzerland-based climate consultancy and carbon offset developer. Some 70 percent of sustainability-minded companies around the world are deliberately hiding their climate goals to comply with new regulations and avoid public scrutiny. That’s in contrast to just a few years ago, when headlines were full of splashy corporate promises on climate change and even oil companies were pledging to zero out their emissions. The report suggests that this newfound silence could impede genuine progress on climate change and decrease pressure on the big emitters that are already lagging behind.
South Pole found that climate-conscious companies in fashion, consumer goods, tech, oil, and even environmental services are “greenhushing.” Nearly half of sustainability representatives reported that communicating about their climate targets has become harder in just the past year. But companies aren’t giving up on going net-zero — just the opposite. Of the 1,400 companies surveyed, three-quarters said they were pouring more money than before into efforts to cut carbon emissions. They just didn’t want to talk much about it.
“We really just cannot afford to not learn from each other,” said Nadia Kähkönen, a deputy director at South Pole and the report’s lead author. Companies should be sharing the lessons they’ve learned from trying to cut their emissions, engaging one another in hard conversations about “what is working and what is not, and how we can improve it,” she said.
Greenhushing was the most common, unexpectedly, among the greenest companies. Some 88 percent of those in environmental services, a category that includes renewables and recycling, said they were decreasing their messaging about their climate targets, even though 93 percent said they were on track to meet their goals. Consumer goods companies, like those that sell food, beverages, and household goods, were the next likely to be greenhushing (86 percent), more than the oil and gas industry (72 percent).
The survey, conducted anonymously, is the first to offer insight from companies as to whythey’re keeping quiet. Environmental service companies had one of the same top reasons as oil companies: heightened scrutiny from investors, customers, and the media. Among all the companies that admitted to greenhushing, well over half listed changing regulations as a reason why they’re not talking about their climate pledges. Some companies also cited a lack of sufficient data or clear industry guidance around how to communicate their green claims.
Their hesitation has real consequences, researchers from South Pole said. For one, it cuts down on the sense of competition and pressure that can drive companies to be more ambitious with their environmental targets. “If you’re hiding what you’re doing, or not talking about it in a prominent way, it can hold back others,” said George Favaloro, South Pole’s head of climate solutions for North America. The trend also could also cut down on sharing tips and tricks for decarbonizing that could help others trim their carbon emissions.
The report found that greenhushing isn’t unfolding equally across the 12 countries surveyed. American companies aren’t as quiet — likely because the United States has less regulation around environmental claims. U.S. companies were the second least likely to be greenhushing, behind Japan. European companies were on the opposite end of the scale. France, which has laws that explicitly limit greenwashing, led the pack with 82 percent of companies staying mum.
“They’re really up against it in Europe now, and in the U.S., it’s still a bit off in the future,” Favaloro said. “It’s coming, but it’s not quite here yet.” One of the first anti-greenwashing laws in the U.S. went into effect in California earlier this month, mandating that large companies disclose their emissions to back up climate-friendly claims. Lawsuits are also a growing threat: Last year, Nike and Delta Air Lines were sued for making questionable claims about their environmental impacts.
It might be surprising that U.S. companies are unafraid of communicating their climate goals considering the conservative backlash against ESG, short for “environmental, social and governance,” a set of standards investors use to assess companies. But the ESG drama has more serious consequences for asset managers like Vanguard and BlackRock, which removed references to sustainability goals on their websites last year, than for corporations.
The 1,400 companies surveyed in the South Pole report are some of the furthest along when it comes to corporate climate action. Overall, however, most companies haven’t even started yet. Only 8 percent of a broad group of 77,000 corporations, which includes global Fortune 500 companies, have set a net-zero target, the report found. “The more that even the leaders don’t talk about what they’re doing, it’s going to provide less motivation to get that group in the game,” Favaloro said.
This article originally appeared in Grist. Grist is a nonprofit, independent media organization dedicated to telling stories of climate solutions and a just future. Learn more at Grist.org
By Mike Maynard from Sustainable Brands • Reposted: December 28, 2023
The ostrich approach to inconvenient problems is a reason why the climate crisis exists. It’s refreshing to see a brand stand up and say, ‘This is what we’re doing. It’s tough. We can’t be perfect. But we’re working hard and this is what we’ve achieved.’
“One in 5 businesses admit to greenwashing, with half saying their sustainability efforts are failing.” So screams one headline in Business Matters. And you don’t have to be a cynic to note that little word, “admit.” The number could be higher — much higher.
This tells us a few things. One is that public pressure to be (or be seen to be) climate-conscious and climate-friendly is sufficiently great to motivate companies to lie. It also tells us that many companies are falling short with respect to sustainability; they wouldn’t have to lie otherwise. And it tells us that to some extent, greenwashing is considered if not quite acceptable then forgivable. Even when anonymous, even when giving information voluntarily, companies aren’t quite worried enough to say they’ve done nothing wrong.
This is a luxury that brands in the B2B tech space don’t have. Because in B2B tech, you frequently don’t choose products — you choose a longer relationship with a vendor by reputation. Truly proprietary tech is rare in the industry; there are usually multiple alternatives to any product you might want. So — especially when dealing with hardware — you distinguish between one vendor and another on the basis of their reputation, the strength of their brand and your relationship with them.
Moreover, brands that sell to consumers — by virtue of their position — must be seen (and demonstrated) to show they care deeply about environmental, social and governance concerns. B2B tech companies are, on the whole, less engaged with ‘purpose’ as an approach to business; but this is changing rapidly. Consumer brands are hyper-aware of how the public — and the media — can freeze out brands that don’t consider people and the planet, and want to know that the companies in their ecosystem aren’t going to make them look bad. B2B brands increasingly face the same pressures.
It’s therefore critically important that B2B tech vendors don’t expose themselves to the charge of greenwashing. They can’t bank on the fact that they’re the only creators or sellers of a certain desirable product; they won’t be. Their reputation is a major part of their business. They need to take good care of it, or the outcome could be damaging — one false claim about their climate policy and they risk sending a large chunk of their customer base to their nearest rival.
Greenhushing — deliberately underreporting or downplaying environmental performance — also won’t cut it for long. Rightly or wrongly, this kind of strategic silence or deliberate ignorance — which might seem like taking a neutral position — is increasingly being seen as a sort of lying by omission. Brands know that climate performance matters to the public. By refusing to discuss it, they avoid being attacked if it doesn’t meet the mark. But the damage has been done by scandal after scandal; and as the planet heats up, public patience for this code of silence is wearing thin. Greenhushing might be tempting — especially in a product-focused space such as B2B tech, where climate comms seem peripheral. But it’s not a long-term solution.
So, here’s a radical suggestion for B2B tech brands: Don’t greenwash and don’t greenhush. Instead, be honest. Reflect on what you’re doing and its impact. Ask yourself if you could do better. And seriously consider the trade-offs that are part and parcel of what you do. Tech supply chains are complex, often global, and frequently opaque. And they’re usually responsible for the lion’s share of a brand’s emissions. Smartphone supply chains, in particular, are notoriously bad for both people and the climate; and yet everyone uses smartphones. There is an acceptance that there are good and bad sides to tech, both in its use and manufacture. B2B tech brands need to understand how the pros and cons stack up and, ultimately, find ways to talk about that.
Companies can then say what actions they’re taking and how it’s progressing. Committing to honesty will encourage your team to be creative in becoming more sustainable. (Necessity, after all, is the mother of invention.) And ideally, B2B tech would do this as a community. To a great extent, all companies are in the same boat — so, starting a conversation means one company doesn’t have to stick its proverbial head above the trenches.
Yet, at the same time, it’s important to note that individual companies don’t have to view climate action and communication as a necessary evil — B2B tech brands stand to make real gains if they go about it the right way. Amid so much distrust regarding sustainability, honesty invites respect. It strengthens bonds with customers. And thanks to its positive effect on brand reputation, it’s good for the bottom line. In B2B tech, it could be a key competitive advantage. It’s refreshing to see a brand stand up and say, ‘This is what we’re doing. It’s tough. We can’t be perfect. But we’re working hard and this is what we’ve achieved.’ Tender evaluation forms are also following this in terms of specifying clarity on environmental claims.
Arguably, the ostrich approach to inconvenient problems is a reason why the climate crisis exists, why we now live — to quote the UN’s Antonio Guterres — in the “age of global boiling.” To mix metaphors, we kicked the can down the road. The temptation in B2B tech, as in many other industries, will be to do the same: Rather than grapple with climate action and climate comms, wait it out. Hey, everyone thinks, maybe it’ll go away. But brands will only pay a bigger price further down the line. In contrast, if they act now, talk now, and try to do it together, they stand to benefit.
Unlike greenwashing, a quieter phenomenon raises concerns about transparency and authenticity. By Patricia Costinhas from impakter.com • Reposted: September 24, 2023
In the world of corporate sustainability, it’s not always about what companies proudly proclaim; sometimes, it’s the hushed secrets they keep that reveal their true shades of green. You’ve probably heard of greenwashing before, but now there is a subtler player lurking in the shadows: greenhushing.
While greenwashing wears its false eco-badges loud and proud, greenhushing prefers to stay in the background, quietly concealing its true colors. But make no mistake; silence can speak volumes. It raises questions about companies’ transparency, accountability, and their true sustainability efforts.
What is Greenhushing?
Though not a term that rolls off the tongue as easily as greenwashing, greenhushing has been growing in popularity. In essence, it revolves around companies deliberately opting to keep their environmental and social credentials discreet, almost as if they are hushing their sustainability efforts. Greenhushing involves downplaying or conveniently omitting mention of a company’s environmental initiatives.
Now, you might wonder, isn’t modesty a virtue? Indeed, in the realm of corporate sustainability, there is merit in humility. However, the practice of greenhushing raises a cause for concern when it comes to sustainability communication. Companies that embrace greenhushing may aim to convey that they are committed to sustainability without making a fuss about it. Yet, by choosing to remain vague and ambiguous, they can inadvertently give the impression that their environmental efforts are more substantial than they truly are.
his subtle approach to sustainability communication has its drawbacks, as it can obscure the reality of a company’s emissions and sustainability initiatives. Furthermore, it opens the door to sophisticated greenwashing tactics, which exploit this hushed narrative to create a façade of environmental responsibility.
Measuring Sustainability
Assessing a company’s commitment to sustainability in today’s corporate world can be a tough task. While financial metrics enjoy well-established and standardized criteria, the same cannot be said for sustainability metrics, which are often kept hidden.
Numerous organizations, frameworks, and industry groups within the business landscape have their own sets of reporting guidelines. This diversity of standards results in a fragmented sustainability landscape, making it challenging to compare how businesses fare in terms of sustainability targets and environmental credentials.
Then there’s the commonly designated ESG reporting field, a trio encompassing Environmental, Social, and Governance aspects. This reporting framework seeks to gauge a company’s commitment to sustainability, social well-being, and upholding ethical standards. However, it now finds itself in middle of growing scrutiny and criticism within the corporate world.
ESG Metrics and Growing Criticism
Quantifying social impact and ethical governance is no easy feat, and the absence of robust regulatory oversight has raised concerns about the relevance of ESG reporting. Many companies grapple with how to measure their environmental impact and fulfill their sustainability targets, adding to the complexity of the situation.
Last year, Tesla CEO Elon Musk made headlines by publicly denouncing ESG, going as far as labeling it a “scam.” This declaration came after Tesla’s removal from the S&P 500 ESG Index, a move that prompted Musk to voice his discontent on Twitter. He suggested that the integrity of the index provider had been compromised, pointing out the irony of oil giant Exxon Mobil retaining its top-10 position while his electric car company was removed from the list altogether.
Then there is the case of rampant greenwashing. Without clear-cut or standard sustainability reporting metrics, what we find is a breeding ground for corporations to exaggerate or falsify their initiatives.
The new EU CSRD Directive will make ESG reporting mandatory from January 2025. This means companies should start to collect their data from January 2024. Starting from larger companies and then later SMEs everyone will have to report on their sustainability efforts.
Motivations Behind Greenhushing
To truly grasp why organizations choose the path of greenhushing, we must first understand the driving forces behind it.
Resource Constraints
One significant factor in the greenhushing equation is resource constraints. Imagine a smaller company with limited manpower and budget resources. When they start trumpeting their sustainability achievements, they can quickly find themselves overwhelmed with demands for more data, additional proof, and numerous reports. These resource limitations can swiftly transform the green spotlight into a glaring interrogation lamp. Consequently, some organizations choose to maintain discretion as a shield.
Regulatory Costs
Navigating the labyrinth of regulations can be expensive, particularly for companies seeking to solidify their green credentials. The fear of incurring regulatory fines due to inadvertent missteps acts as a potent deterrent. Therefore, some organizations opt to remain under the radar until they are absolutely certain they can meet all regulatory requirements. Some companies prefer quiet, prolonged testing of their green initiatives before making grand announcements. This approach helps them avoid both the financial and administrative costs associated with compliance.
Shielding from Scrutiny
By selectively revealing their sustainability efforts, organizations can avoid intense scrutiny and accusations of greenwashing. Companies making exaggerated or false green claims not only risk reputational damage but also potential legal consequences. Thus, through greenhushing, firms can remain unnoticed by watchful eyes. An example is the recent accusation against global banking giant HSBC. They faced allegations of greenhushing when they downgraded funds exclusively invested in sustainable assets to those including environmental or social factors, without necessarily targeting a sustainable outcome. While the company claimed compliance with EU regulations, critics viewed it as an attempt to evade investor scrutiny.
Taking a critical stance on these motivations for greenhushing is vital. While resource constraints and regulatory costs are valid concerns, they should not excuse a lack of transparency. In an era where consumers and stakeholders demand responsible investment decisions, underreporting sustainability efforts can backfire. Some may inadvertently damage trust and credibility in their attempt to shield themselves from scrutiny.
The Sustainability Imperative
All things considered, sustainability rests on transparency and accountability. It goes beyond marketing or shielding from criticism. Despite ESG criticism, customers now focus on product carbon footprints, integral to their choices. This awareness drives firms to adjust emissions goals and prioritize strong sustainability credentials in their climate strategies.
Ultimately, the path towards sustainability is far from silent. By wholeheartedly embracing transparency and accountability, organizations can not only avert allegations of greenwashing but also make substantive contributions to the collective mission of combatting climate change and addressing environmental challenges.
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