The fear of greenwashing accusations is spreading “greenhushing” among companies. 10 rules for communication

The climate of intense scrutiny surrounding ESG reporting, together with the fear of fines and reputational damage in the event of greenwashing accusations, is leading companies to keep their sustainability goals “secret”.

Fear of so-called greenwashing (surface-level environmentalism) is pushing companies away from transparent reporting of the main practices adopted in the ESG field. According to the Transparency Index 2024 report, among the 200 largest public and private companies in the United States and Great Britain, almost 6 out of 10 (58%) are in fact “silencing” their real ESG goals in public, thus exposing themselves to the risk of greenhushing (from the English “to hush”, meaning “to silence”); a new trend under which, as also revealed in the pages of the Wall Street Journal, organizations deliberately avoid promoting and communicating their progress in ESG in order to steer clear of greenwashing accusations.

With the growing scrutiny exerted by political and regulatory authorities, and because consumers are paying closer attention to the real, concrete and measurable commitments companies are making on sustainability, where any mistakes and the disclosure of false information can lead to fines and serious damage to corporate reputation, companies therefore seem increasingly hesitant to promote their efforts on ESG issues. With the global value of ESG assets, according to Bloomberg, expected to exceed $40 trillion by 2030, and with 85% of investors believing that they deliver better returns and resilient portfolios, companies that remain silent about their progress on sustainability could end up missing out on attractive investment opportunities, with the possible resulting flight of customers from their brands.

Confirmation of this came from the latest edition of the Sustainability Perceptions Index report drawn up by Brand Finance, which found that the world’s biggest brands are losing billions of dollars in potential value because they are failing to communicate their sustainability results and progress adequately.

Whatever the underlying reason, greenhushing deprives companies and, ultimately, consumers of the intrinsic value that underpins businesses’ sustainability programmes and initiatives in the ESG arena. By stifling the sharing of knowledge and limiting the spread of best practices and the most innovative solutions, greenhushing hinders progress and collaboration at sector level, as organizations fail to learn from the successes, challenges and sustainability efforts of competitors. “With emerging regulations and ever-stricter reporting standards on the horizon, there is potential for companies to communicate more transparently and accurately about the business strategies they have adopted on ESG matters – explains Ada Rosa Balzan, founder, president and CEO of ARB SB. Sustainability issues are relatively new for most Italian companies, and the fear of getting it wrong, which often leads people to choose silence, stems mainly from the fact that there is not yet a strong knowledge base and enough experience in handling sustainability communication,” Balzan concludes.

Here are the 10 C’s a company must have for proper sustainability communication, according to the experts at ARB SB:

1. Concreteness: communicate only concrete actions the company has taken;
2. Consistency between the behaviors the company adopts and the sustainability principles it communicates;
3. Awareness that solid, recognized scientific foundations must exist when communicating any ESG aspect;
4. Certification: having a third-party certification strengthens the message of what is being communicated;
5. Clarity: use simple language accessible to everyone;
6. Culture: promote the spread of the culture of sustainability among all stakeholders;
7. Internal and external sharing of the principles the company has chosen as sustainability goals;
8. Competence: have adequate in-house expertise and knowledge of sustainability issues;
9. A corporate sustainability committee to guide ownership in strategic choices on sustainability issues;
10. Communicate: do first, then communicate!