Stakeholder Capitalism

What is ‘greenhushing’ and is it really a cause for concern?

Greenhushing: Women are seen amidst green smoke during a protest to mark the International Day for the Elimination of Violence Against Women, in Guatemala City, Guatemala November 25, 2021. REUTERS/Sandra Sebastian

Not blowing smoke: 'greenhushing' may be on the rise. Image: REUTERS/Sandra Sebastian

John Letzing
Digital Editor, World Economic Forum
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on Stakeholder Capitalism?
The Big Picture
Explore and monitor how ESG is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

ESG

This article is part of: Centre for Nature and Climate

Listen to the article

  • Many companies are opting to stay quiet about their emissions-reduction goals.
  • A recent report raised concerns that such 'greenhushing' will lessen transparency and hinder climate ambition.
  • But one expert says companies have long found reason to leave things unsaid.

Sometimes good intentions are not rewarded.

Companies vocal about their pursuit of green initiatives and greater sustainability, for example, can face backlash. Case in point: the US state of Texas, which recently banned local entities from doing business with certain financial firms, due to their declared intention to factor concerns about fossil fuels into investment decisions.

A subsequent report issued by the consultancy South Pole seemed to indicate that many companies are now trying to avoid similar retaliation – by going radio silent. Nearly a quarter of the 1,200 firms it surveyed don’t plan to publicize their science-based emissions targets, which are deemed necessary to help curb the worst impacts of climate change. That’s stirred speculation that a new era of "greenhushing" may portend a lack of progress.

But according to Jason Jay, director of the Sustainability Initiative at MIT Sloan, companies have long felt a need to occasionally turn down the volume on their sustainability focus.

“This is not new,” he said. “Making claims ratchets up people’s expectations, expectations lead to greater scrutiny, that scrutiny can lead to a kind of gotcha phenomenon.”

“If a side effect of setting a goal is that a bunch of people are yelling at [companies] from the outside for not getting there fast enough… that creates an incentive to be a little quieter.”

In any event, Jay noted that only about 160 large companies are believed to be responsible for 80% of global emissions. “They’re all under heavy scrutiny,” he said, making a global outbreak of regressive greenhushing unlikely.

It remains to be seen if greenhushing will have the same sort of staying power as its antithesis greenwashing.
It remains to be seen if greenhushing will have the same sort of staying power as its antithesis greenwashing. Image: World Economic Forum

Still, silence could be problematic in some circumstances.

Among big, publicly-traded companies in the US and Europe, well-established sustainability norms would dull the impact of greenhushing, Jay said.

But among smaller businesses in these places, and for bigger firms in other regions, those norms are less established; “In that sense greenhushing could be a problem, if it slows the expansion of the norms into that new terrain.”

A fear of being called out

It remains to be seen if greenhushing will have the same sort of staying power as its antithesis greenwashing. That term was coined nearly 40 years ago to describe the way companies exaggerate about their environmental credentials, and has become so commonplace it was recently added to the dictionary.

One assessment of greenwashing in the European Union last year found that nearly half of the “green online claims” being made by companies were exaggerated, deceptive, or false.

Glaring data points like this have triggered legal crackdowns; Australia’s competition watchdog recently made greenwashing an enforcement priority, and new EU Directive could prohibit environmental performance claims that can’t be backed up. The UN Secretary-General just called for “zero tolerance” for the practice.

Heightened sensitivity to such scrutiny might speak to the idea of not speaking at all.

Loading...

There are other practical reasons for greenhushing, according to Jay. One is a perception that green products will require undesirable trade-offs: If I tell you I’m buying a green cleaning product for my house, you might not expect it to get mildew off the shower tiles.”

There’s also a perception issue related to timing. “If I’m the first company to go net-zero then I get more press for it, if I’m the 347th company to go net-zero, nobody cares,” Jay said. “And if I’m the 1,500th company then I’m actually seen as a laggard.”

The South Pole report spells out a similar explanation: science-based sustainability targets are “increasingly expected rather than exceptional.” So, why bother sending that press release.

This may be particularly true as long as doing so could create difficulty for you in places like Texas. Though, it’s unclear how sustainable it is to target sustainability efforts.

According to one study, the decision in Texas to prohibit contracting with banks that have certain environmental, social, and governance policies could cost local entities as much as $532 million in additional interest – in just eight months.

More reading on greenhushing and greenwashing

For more context, here are links to further reading from the World Economic Forum's Strategic Intelligence platform:

  • “There is greenwashing at COP.” According to this piece, the head of an environmental law firm had some choice words for a soft-drink giant sponsoring the COP27 climate talks in Egypt. (Eco-Business)
  • “We can see how maybe firms are caught in the trap.” This accounting professor says choosing whether or not to report progress on sustainability targets boils down to “who you want to make angry.” (Wharton)
  • According to this analysis, it remains to be seen whether greenhushing proves to be a short-lived meme (see: “plastic-washing”) or a genuine trouble spot for companies. (GreenBiz)
  • This piece describes a company that labelled products as “green” and promptly got slammed for greenwashing; several months later it parted ways with its head of sustainability and stopped talking entirely about its green efforts. (Eco-Business)
  • Why greenwashing might be here to stay – according to this piece, it will take more than new reporting requirements and artificial intelligence to put a stop to this pernicious practice. (Raconteur)
  • This study tracked the performance of companies in the Shanghai Stock Exchange’s Social Responsibility Index, and found a positive correlation between the quality of carbon disclosure and “enterprise value.” It also suggests that any benefit from greenwashing is short-lived. (Frontiers)
  • “Greenwashing on an industrial scale.” This piece delves into the impact that failing to meet stated social responsibility goals can have on a company’s bottom line. (Harvard Business Review)

On the Strategic Intelligence platform, you can find feeds of expert analysis related to ESG, Corporate Governance and hundreds of additional topics. You’ll need to register to view.

Image: World Economic Forum

Jason Jay co-curates the Forum’s Transformation Map on ESG.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

To create a 'sustainomy' businesses must focus on the ecosystem, not just the market

"Arm" Piyachart Isarabhakdee

June 17, 2024

About Us

Events

Media

Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum