Sustainability
For consumers, it’s becoming increasingly difficult to evaluate the commitments of companies to environmental and climate protection in between their greenwashing and their greenhushing.
Most companies like to boast about their sustainability efforts. However, the European Union Commission found that over 50% of environmental claims audited in the region were vague, misleading or unsubstantiated. Another 40% were unfounded. The lack of common rules for companies making voluntary environmental claims leads to greenwashing and creates an uneven playing field to the detriment of truly sustainable companies.
The EU is planning to take tougher action against green fraud with its proposed Green Claims Directive, which aims to encourage companies to make clear, precise and substantive claims about the environmental performance of their products or services. The guideline contains rules for using terms like “environmentally friendly,” “climate neutral” or “recyclable” and requires clear and comprehensible documentation of such claims.
However, what initially sounds like a good way to ensure transparency could encourage greenhushing, referring to businesses and organizations staying quiet on their sustainability strategies. The term was first coined in 2008 by consulting firm Treehugger in response to many businesses’ reluctance to celebrate sustainable initiatives for fear of criticism that they were insufficient or false. Greenhushing can make it more difficult for consumers to identify which products are truly environmentally friendly.
Motivations for greenhushing are diverse. Some companies want to avoid greenwashing accusations if they fail to meet climate targets. Others don’t want an “eco” image they think isn’t relevant for their customers. Also, sustainability may no longer be a unique selling point. Some companies may want to discourage other players from emulating their success by keeping tight lips. Lastly, not all brands know what to say. Sustainability can be complex and overwhelming—so can storytelling. Fear of having to provide data, which can strain already scarce resources, leads to under-communicating. Smaller companies especially may not have the resources to undertake large-scale sustainability measures.
In some cases, greenhushing seems praiseworthy when companies appear to act, not just talk. But if large corporations conceal their sustainability measures, it becomes harder to develop reliable, industry-specific standards that encourage smaller companies to follow suit. It also forces individual companies to establish their own sustainability measures on a trial-and-error basis, reducing sustainability efforts’ effectiveness.
According to Swiss consulting firm South Pole, 25% of 1,200+ companies surveyed worldwide deliberately refrain from communicating scientifically sound net-zero targets. In Germany, a third of companies conceal their climate targets. In the U.S., a study found that while more than 70% of S&P 500 companies report their greenhouse gas emissions, not even 30% of smaller companies do. The EU will mandate climate disclosures in 2025 and for more companies due to the Corporate Sustainability Reporting Directive. In the U.S., the SEC aims to roll out stricter regulations for 2024. This may discourage greenhushing.
In all fairness, between washing and hushing, many businesses do a decent job communicating their sustainability efforts and promoting products and services ethically and transparently. More transparency should help consumers recognize greenhushing and greenwashing in the future.
STAY SuSTAYnable!
Apu Gosalia is a sustainability expert. He can be reached at apurva.gosalia@web.de.