For decades, environmental advocates have pushed back against “greenwashing” when polluting companies misrepresent themselves as environmentally friendly. Governments are finally starting to tackle the problem with stricter regulations: The European Union has agreed ban misleading environmental advertising in September, and the US Fair Trade Commission is updating its guidelines on green advertising.
But as new rules take effect, they add to another problem: Many companies, even honest ones, are afraid to talk about their climate change work at all.
The practice of “greenhushing” is now widespread, according to a new report released Tuesday 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. This is in contrast to just a few years ago, when headlines were full of splashy corporate promises about climate change and even oil companies pledged to zero their emissions. The report suggests that this newfound lull could hinder real progress on climate change and reduce pressure on the big emitters that are already lagging behind.
South Pole found that climate-conscious companies in fashion, consumer goods, technology, oil and even environmental services are “greenhusking”. Almost half of sustainability representatives reported that communication about their climate goals has become more difficult in the past year alone. 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 reduce carbon emissions. They just didn’t want to talk about it much.
“We really cannot afford not to learn from each other,” said Nadia Kähkönen, a deputy director at South Pole and the lead author of the report. Companies should share the lessons they’ve learned from trying to reduce their emissions, and engage each other in hard conversations about “what works and what doesn’t, and how we can improve it,” she said.
Greenhushing was most common, unexpectedly, among the greenest companies. Some 88 percent of those in environmental services, a category that includes renewable energy and recycling, said they were reducing their messaging about their climate goals, even though 93 percent said they were on track to meet their goals. Consumer goods companies, such as those that sell food, beverages and household goods, were the next most likely to be green (86 percent), ahead of the oil and gas industry (72 percent).
The survey, which was conducted anonymously, is the first to offer insight from companies about why they remain silent. Environmental service companies had one of the same main reasons as oil companies: increased scrutiny from investors, customers and the media. More than half of all the companies that admitted to being pressured listed changing regulations as a reason for not talking about their climate pledges. Some companies also referred to a lack of sufficient data or clear industry guidance on how to communicate their green claims.
Their hesitation has real consequences, South Pole researchers said. For one, it reduces the sense of competition and pressure that can drive companies to be more ambitious with their environmental targets. “If you hide what you’re doing, or don’t talk about it in a prominent way, it can hold others back,” said George Favaloro, South Pole’s head of climate solutions for North America. The trend can also reduce the sharing of decarbonization tips and tricks that can help others reduce their carbon emissions.
The report found that a green push is not unfolding evenly across the 12 countries surveyed. American companies are not so quiet – probably because the United States has less regulation around environmental claims. American companies were the second least likely to go green, behind Japan. European companies were at the opposite end of the scale. France, which has laws that expressly restrict greenwashingled the pack with 82 percent of companies staying mum.
“They’re really against it now in Europe, and in the U.S. it’s still a little bit down the road,” Favaloro said. “It’s coming, but it’s not quite here yet.” One of the first anti-greenwashing laws in the US took effect earlier this month in California, requiring large companies to 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 questionable claims about their environmental impacts.
It may be surprising that American companies are not afraid to communicate their climate goals, given the conservative backlash against “ESG,” short for “environmental, social and governance,” a set of standards that investors use to assess companies. But the ESG drama has more serious implications for asset managers such as Vanguard and BlackRock, which references to sustainability goals removed last year on their websites than for corporations.
The 1,400 companies surveyed in the South Pole report are some of the furthest to come in corporate climate action. However, in general, 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 even the leaders don’t talk about what they’re doing, it will provide less motivation to get that group in the game,” Favaloro said.
