The loud voices in the ESG universe that want to give themselves a green image with misleading slogans and empty promises (known as “greenwashing”) have long been an integral part of all sustainability debates. Far less well-known is the exact opposite, known as “green hushing”. This term refers to all measures taken by companies to hide their climate strategies.
Green hushing is more common amongst smaller companies in particular. There are three motives for this. One of the main reasons is the fear of criticism by shareholders, stakeholders and customers for not doing enough to combat climate change. This is linked to the fear of being accused of greenwashing. And, last but not least, finance plays a decisive role. For many smaller companies, sustainability certification is barely feasible because the entire process can be very expensive and is associated with complex procedures.
In the case of small cap companies in particular, green hushing is encouraged by the fact that statutory regulations for sustainability reports are not tailored to them, and apply to larger companies or public organisations. In addition, there are regulations such as the Green Claims Directive, which can be used to standardize and verify sustainability in a marketing context. Green hushing is therefore, in a way, a preventive protection mechanism developed by companies in order to avoid greenwashing allegations in the event that they miss their climate targets.
The most recent survey, conducted in 2022 by Swiss consulting firm South Pole, shows how widespread green hushing is among more than 1,200 companies from 12 countries and a wide variety of sectors. Twenty-five percent of the companies surveyed operate green hushing. In practice, this means that they are pursuing scientifically sound net-zero climate targets, i.e., an end state in which their own greenhouse gas emissions no longer have a net impact on the climate. At the same time, however, they refrain from publicly announcing them.
Unfortunately, green hushing also means that it is not possible to publicly monitor climate protection measures. If more and more companies keep their sustainability measures secret, it will not be possible to develop reliable standards for achieving climate and environmental protection. In addition, companies cannot learn from other companies if they do not share their tried-and-tested measures. “When green hushing becomes a trend, it becomes even more difficult to inspire some of the climate laggards,” warns Bethan Hall, Sustainability Advisor at South Pole.
How can we avoid green hushing? First and foremost, through transparent communication. Regularly providing information about the current status quo in ESG points is always better than nothing in terms of credibility and reputation. The use of common buzz words such as “green” or “climate-neutral” does not suggest an ESG quality seal. This is precisely why companies should avoid these terms in their ESG activities. Regardless of whether it’s a global corporation or a small company that’s only just building itself: sustainability is ultimately a process, and such a process does not have to be perfectly linear. It is precisely this that must be firmly anchored in the communication strategy.
Corporate governance must be equally clear about this: green hushing does not help to increase profitability, let alone attract new investors. Experience shows that investors are more likely to be patient when companies miss their ESG targets in the short term and then work to remedy their mistakes. Instead, sustainability measures must be communicated consistently to all stakeholders across all available channels – from quarterly reporting to online channels and social media platforms. We will be happy to advise you on which IR & PR channels are best suited for communicating your ESG activities.