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Is Your Favorite Company Greenwashing — Or Even Greenhushing?

Concerned about negative repercussions, some companies have stopped sharing their net zero goals — which prevents the public from understanding the full press toward renewable energy that needs to take place.

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Wouldn’t you think a company that has set green goals would want its customers to know it? Not so fast. A new trend is emerging in the business world in which companies have zero emissions targets but decide not to make them public. It’s called “greenhushing,” and it’s becoming common for companies to stay muted about their climate strategies, whether due to caution, restraint, anxiety, or defiance.

Greenhushing has a little in common with greenwashing — it’s actually its counterpart. Let’s determine the nuances and figure out why environmental pressures are pulling and pushing companies in various directions and with curious results.

What is greenwashing? According to NRDC, greenwashing is the act of making false or misleading statements about the environmental benefits of a product or practice. It can be a way for companies to continue or expand their polluting as well as related harmful behaviors, all while gaming the system or profiting off well-intentioned, sustainably minded consumers.

Section 5 of the FTC Act — guides set forth from the Federal Trade Commission that delineate its current views about environmental claims — prohibits deceptive acts and practices in or affecting commerce. A representation, omission, or practice is deceptive if it is likely to mislead consumers acting reasonably under the circumstances and is material to consumers’ decisions. Labeling that uses terms like “natural,” “green,” “eco-friendly,” “environmentally friendly,” and “sustainable” may be more deceptive than actual.

A plastic water bottle with labeling that boasts its natural source, for example, is doing more environmental harm than good — the bottled water industry’s global success comes at a huge environmental, climate and social cost, according to a report published by the United Nations University Institute for Water, Environment, and Health.

How is greenwashing different than greenhushing? In greenwashing, businesses exaggerate their commitment to sustainability. Claims in these cases are hyperbolic in order to assuage an increasingly bio-conscious consumer base. When brought to public attention, greenwashing claims spur anger and even legal repercussions — consumers were led to believe that their favorite brands were making a significant effort to green their services and products, and they were led astray.

Greenhushing, on the other hand, captures the tensions that have arisen due to the politicization of the environment. Companies that join in greenhushing do their best to hide their sustainability goals — they don’t want to be categorized as greenwashers, which could suppress their customer base and cast a negative light on their profitability.

What is greenhushing? Firms engage in greenhushing when they have active company net zero goals and policies. They recognize it is important to reduce their carbon footprint, so they’re cutting energy use, regulating business travel, doing business with sustainable suppliers, taking advantage of carbon offsets, strategizing solutions to waste, conserving water, choosing sustainable materials over plastic, and seeking out other methods to build greater sustainability.

However, many of these companies aren’t transparent about their zero emissions efforts — they’re staying quiet about climate goals and progress.

A 2022 report by South Pole, the climate consultancy and carbon offset developer, revealed that nearly a quarter of surveyed global climate leaders “will not be publicizing their achievements and milestones in the climate space beyond the bare minimum or as required.” Often that decision is a direct result of the fractured political climate, in which to be seen as embracing climate mitigation goals may project the image of an outsider to a conservation base.

South Pole notes that 1 in 4 of the 1,200 large private companies that have set climate targets do not intend to publicize them.

On one side you have progressives who are seeking legal recourse to require Big Business to do their part to alleviate rising global temperatures. On the other side you have conservative legislators who have struck out at companies that have stepped up to ESG (environmental, social, and governance) responsibilities with prohibitions and public shaming. Partly, it’s the ESG goals that have spurred the greenhushing controversy — companies who announce such milestones need to actually produce them, and, if they don’t, shareholders complain.

“Greenhushing gained traction in fall 2022 in response to the groundswell of scrutiny of companies’ ESG commitments and disclosures,” states Lisa Sachs, director of the Columbia Center on Sustainable Investment. Remember how Tesla, the all-electric car company, was removed from the S&P 500 ESG Index? At the same time, Exxon and Marathon Oil were added. Tesla’s “lack of a low-carbon strategy” as well as “codes of business conduct” were cited as reasons for its ESG scrutiny.

What’s a business to do?

What are some examples of greenhushing? As the Washington Post noted, Wall Street greenhushing is often a reaction to Republican state treasurers and attorneys general in several states who have blacklisted banks that factor climate risks and social concerns into their investment decisions.

Greenhushing is part of a US political battle over the climate crisis. Several states, such as Florida, are divesting billions of dollars from BlackRock because it has developed strong ESG portfolios. BlackRock has removed several references on its website to the firm’s climate commitments. BlackRock CEO Larry Fink, a major proponent of factoring in climate change risks to investing strategies and corporate leadership, has been navigating difficult financial terrain as he finds himself a top target of conservative politicians. So he’s modified the language he uses to describe green investments. “I don’t use the word ESG anymore because it’s been entirely weaponized … by the far left and weaponized by the far right,” Fink told attendees of the Aspen Ideas Festival. But he said BlackRock would continue to discuss climate and social issues with the companies in which it has stakes.

HSBC also has been accused of greenhushing in recent months. According to EuroNews, the asset management firm downgraded a number of Article 9 funds — exclusively invested in sustainable assets — to an Article 8 category. The latter are funds that promote environmental or social factors but do not need to target a sustainable outcome.

ASOS removed the “Responsible Edit” clothes filter section of its website without any public announcement.

Final Thoughts

GOP lawmakers on the House Financial Services Committee have planned 6 hearings on what they call “woke investing.” They claim progressives are using financial tools for the purpose of advancing their political goals. These “freedom loving” Republicans face an uphill battle against ESG flows of money and their own voters’ preferences.

If all companies were made to adhere to ESG metrics to quantify climate pollution impact, no company would be exempt from setting climate action goals. The number of governments that have introduced legislation making ESG reporting mandatory reflects how ESG reporting is not a fleeting trend – it is here to stay to help businesses avoid risks of global stranded assets. The value of future lost profits in the upstream oil and gas sector are projected to exceed $1 trillion under plausible changes in expectations about the effects of climate policy.

Shareholders have every right to know what’s ahead, and greenhushing is one more obstacle to a full and robust transition to global renewable energy usage.

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Written By

Carolyn Fortuna (they, them), Ph.D., is a writer, researcher, and educator with a lifelong dedication to ecojustice. Carolyn has won awards from the Anti-Defamation League, The International Literacy Association, and The Leavy Foundation. Carolyn is a small-time investor in Tesla and an owner of a Model Y as well as a Chevy Bolt. Please follow Carolyn on Twitter and Facebook.


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