The sound of silence

The greenhushing phenomenon is largely rooted in the fear that companies may:

• turn off some stakeholders by prioritising green issues ahead of immediate profit;
• face a backlash if they fail to meet ambitious green targets; and/or
• risk accusations of greenwashing if their claims are not entirely supported by evidence in the same way that financial outcomes can be monitored.

The issue is essentially one of reputational management and communication, which you’d imagine rests within the organisation’s control. However, with changes to reporting requirements – particularly those stemming from CSRD – silence is not an option, and transparency on what companies really do and are faced with becomes pivotal.

Being seen to be green

Today’s companies face increasing pressure from a multitude of stakeholders to ensure their activities are sustainable. This has led many organisations to develop sustainability targets and invest in green technologies, but there remains a reticence among some companies to publicise these efforts. Openly discussing sustainability initiatives can draw in eco-conscious customers and investors, but it also opens the door to public scrutiny, including from critics who can quickly dissect a company’s claims and compare them to actual performance – perhaps leading to allegations of greenwashing.
For companies operating in sectors traditionally viewed as less eco-friendly – such as extraction industries, manufacturing, and fashion – this issue is particularly acute, and the margin for misstatement is slim. Any form of overstatement or misrepresentation can severely damage a company’s reputation, as well as lead to direct actions (including legal), outweighing the benefits of revealing its green endeavours.

The right to remain silent

One response to the risk of turning stakeholders off or being accused of greenwashing is greenhushing. Here, companies deliberately downplay or entirely omit information on their green credentials and initiatives – even if they are substantial or groundbreaking. The logic here is that it’s better to operate under the radar and get ready first, rather than to speak up and risk public humiliation or loss of trust.
This silence can come at a cost, though. First, it sets back the progress that could be gained from sharing best practices and inspiring other organisations to follow suit. Second, it can engender suspicion among stakeholders, making it harder for a company to build the trust platform it needs to operate. And third, it prevents the consumers and investors who care about sustainability from making informed choices. Typically, organisations that adopt a silent approach to sustainability compound this by failing to engage with stakeholders in ways that could pave the way for green communications, and build stronger relationships. Such engagement doesn’t necessarily need to be in the public glare, and can help establish internal confidence to be more forthright in talking about green matters.

Getting the balance right

Achieving the right balance between transparency and silence inevitably involves selective disclosure, where businesses only release information that has been rigorously verified and stands up to compliance scrutiny. This strategy allows businesses to build their green credentials without risking accusations of greenwashing, as long as the feasibility and impact of their targets can be substantiated. It is one point on the spectrum that runs from complete silence, to full disclosure of intent and ambition.

Be true to your brand

At the heart of this issue are the values and character of the organisation, its management, and its stakeholders. This is a key issue in industries such as oil and gas, where one organisation may choose to be silent on green promises and achievements to preserve stock market value, whereas others may choose to favour new classes of investor that prioritise green issues.
For companies that strive to be open and ethical in all their dealings, standing by targets and ambitions made in good faith – whether these are deemed by the outside world to be too much or too little – is the only way they can operate to stay true to the stated values. For other businesses, a more tactical approach and selective communication will feel more in tune with the balance to be struck between the demands of different stakeholder groups, however risky this tactic is. This can lead to greater scrutiny and increased dialogue between the business and its stakeholders, which is arguably a good thing anyway.

A credible narrative 

A business that gives its green performance the silent treatment is also exposed to the risk that information vacuums rarely last. At best, the absence of statements on sustainability approach and activities will invite speculation; at worst, the company may be open to active misinformation about its affairs. Although legal claims about an organisation or its directors’ activities in the sustainability arena would need to be supported by evidence, sometimes the hint of an accusation can be enough to affect corporate and personal reputations.

In the end, it comes down to the principles of ‘balance’ and providing a ‘faithful representation’ alongside decision-usefulness. These principles should drive businesses to disclose on their journey – complete with challenges and failures – which, in line with the upcoming CSRD requirements, would include the policies, targets, metrics and action plans to achieve the objectives. When not in place, disclosing green performance in a balanced manner is the way to go about it.

Move the needle

Getting the balance of ESG and sustainability communication right isn’t easy. Saying more than what’s legally required runs the risk of greenwashing accusations, but saying too little – greenhushing – can create suspicion, and damage stakeholder relations. Although the caution associated with greenhushing may be understandable, silence is not a manageable strategy in the long term.
As stakeholders demand transparency and action, companies will need to find better ways to communicate their environmental efforts without fearing the consequences of performance good or bad, or accusations of greenwashing. The task is to find the right middle ground for your organisation’s circumstances; to move the needle in the right direction, at the very least.