The term ‘greenwashing’ has been particularly prevalent in recent months, with more people scrutinising companies for misleading business practices, whereby they make unsubstantiated, and often false, claims about the sustainability of a product or service. If you are not up to date with the term, we have written a blog on greenwashing which will tell you all you need to know about the phenomenon, as well as the other forms of ‘washing’ that companies can engage in. However, another phenomenon to be aware of is ‘Greenhushing’, a term that often appears alongside greenwashing, although many do not know what it is.
What is Greenhushing?
Greenhushing, put simply, is where a company or organisation actively decides to withhold information from the public regarding the steps they have, or haven’t taken, to address their environmental impacts and meet their climate targets. The motivation behind greenhushing is to avoid the risk of scrutiny if their targets and actions fall below what is expected of them, and to avoid potential greenwashing accusations.
As the Financial Times reported, one of the reasons driving the increase in greenhushing is the increased number of allegations levied against companies following their COP26 targets, mainly that the targets are ‘unsubstantiated or misleading’. Essentially, some companies may feel that, if they report on climate issues in the wrong way, they may face scrutiny, whereas if they don’t report on it at all, they won’t be scrutinised.
It’s easy to see why some companies may be afraid of the risk of inadvertently greenwashing, especially given the increased number of lawsuits and public scrutiny some companies are facing for the practice. For example, Nike is currently facing a lawsuit in the US for misleading green claims after the plaintiff alleged that only 239 products in Nike’s sustainability collection, totalling 2,452 products, is actually sustainable.
The Problem with Greenwashing
Not only is greenhushing an irresponsible business practice, but it is also something that will soon become essentially outlawed with the increase in domestic and international legislation requiring companies to report annually on their climate-related issues, such as the EU Corporate Sustainability Reporting Directive. Similarly, there is an increase in legislation that requires companies to perform mandatory sustainability due diligence. For example, the EU recently published their Draft Directive on Corporate Sustainability Due Diligence that will apply to EU and some non-EU organisations. There are similar laws emerging in France, Germany, and the Netherlands. With this in mind, companies may soon be required by law to report on their environmental impacts, and steps they are taking to reduce adverse environmental impacts.
Similarly, it has been evidenced on countless occasions that there is a substantial increase in investment and positive financial returns for organisations that can demonstrate sustainability and a robust ESG strategy, for example, a survey of asset owners in 2019 found that 80% actively integrate sustainable investing. Additionally, Reuters reported in 2021 that sustainable investments make up over a third of all assets in five of the world’s biggest markets. Therefore, actively deciding to withhold climate reporting could put off potential investors, particularly at a time where the EU Green Deal is looking to mobilise private finance towards sustainable investments. Of course, in order to reap the benefits of bringing in potential investments, climate reporting will have to be substantiated, so organizations will have to take meaningful steps towards addressing their environmental impacts. On a consumer level, a recent survey found that 86% of adults in the UK want businesses to provide more transparency on sustainability and environmental issues.
In the long term, it is more beneficial for companies to be transparent about their climate-related shortcomings than it is to deceive stakeholders and consumers, or to avoid reporting at all. Organisations that are honest about where they are falling short may garner more long-term support if they can show that they are taking steps to improve. A notable example is the chocolate company, Tony Chocolonely, who have been open about the fact that their supply chains are not 100% slave free, but that they are taking steps to eradicate it. Not only is this a commendable way to report on sustainability matters, but it has also served to improve the reputation of the brand, despite the fact that they are admitting that they have serious issues in their supply chains. Both greenwashing and greenhushing carry the risk of reputational damage, whereas honestly and transparency leaves room for growth.
What Can Businesses Do?
Not only will climate-related reporting and mandatory human rights due diligence be a legal requirement for many businesses, it can also lead to increased investor interest. Organisations should take steps to ensure that they are open and transparent about the environmental aspects of their business, even if they are not perfect in terms of their carbon footprint, targets, or the steps they are taking to address negative human rights impacts. Here’s a few steps that businesses can consider taking:
- Make sure that any climate-related disclosures can be substantiated with data and evidence.
- If you feel as if you could be doing more to address environmental impacts, be transparent about this.
- Conduct environmental and human rights due diligence across your supply chain as a way to mitigate actual or potential adverse environmental and human rights impacts.
- Provide training to the board, and relevant employees, on sustainability issues.
- If organisations are unsure about the validity of a green claim, they can seek advice from legal counsel, or avoid making the claim until it has been verified.
How Can Ardea International help?
Ardea International understands that businesses must ensure that they establish robust due diligence procedures. We support our clients by helping them identify how to manage human rights impacts and risks, ensuring they meet legal compliance obligations and integrate best practices into their policies and procedures.
Ardea International has developed a number of effective compliance solutions, including a human rights and environmental disclosure legal register. The legal compliance due diligence register allows businesses to track incoming legislation as well as current laws they may be subject to. We can also assess your business’s compliance with human rights regulations, including preparedness to comply with new legislation. In addition, Ardea can examine your business’ due diligence procedures and provide priority steps to improve performance.
We have an upcoming workshop on Developing an environmental and human rights mandatory due diligence framework. This course will equip you with an understanding of the key legislative developments and how to develop a due diligence framework to implement in the business.
We also have a range of free and paid resources on our website and we hope that you will enjoy browsing!
Sign up for our quarterly news bulletin and receive the occasional communication from us about pertinent issues.
You can also get in touch with us at: email@example.com
We are a specialist sustainability, business and human rights consultancy with expertise in modern slavery.
If you’d like to know more about this report, or other reports we create, give us a call on: +44 (0) 1273 491423 or drop us a
Fieldview • 21 Staples • Barn
Henfield • West Sussex • BN5 9PP
T +44 (0) 1273 491423
Contact us to see how we can support you.