The Cost of Greenhushing

"Greenhushing": Another month, another annoying sustainability term coined in the voluntary carbon market. Yet again, carbon markets fall victim to operating in a jargon-filled silo. Time to democratize understanding and change that!

So what is "greenhushing" and why should we care? New research indicates 58% of the US's top 100 public and private companies are responding to greenwashing fears by downplaying their genuine ESG advancements. This cautious approach, termed "greenhushing”, stems from a fear of greenwashing accusations, backlash and regulatory scrutiny. Companies are now opting for silence over transparency, missing out on significant opportunities for investment and consumer trust.

With global ESG assets surpassing $30 trillion in 2022, and 85% of investors believing in better returns from ESG assets (supported by studies from Kroll and Kyushu University), transparency is clearly crucial. The lack of clear communication on sustainability progress can deter investors and disconnect companies from a growing base of eco-conscious consumers.

‍The Cost of Under-Promotion

Brand Finance's latest Sustainability Perceptions Index underscores this issue, indicating that top brands are losing billions in potential value by failing to adequately communicate their sustainability achievements. Another Index, the Transparency Index 2024, published by Connected Impact and Ringer Sciences, delves into this by analyzing over 600,000 communications from 200 companies. The Index analyzes LinkedIn and Twitter (X) posts and publicly available revenue data from the FTSE 100 and the 100 largest US companies. The transparency gap was quantified by comparing the qualitative content of communications with the detailed quantitative disclosures in reports. The findings show a significant "transparency gap" where companies are more factual in reports but less vocal on social media about their ESG efforts:

1. Greenhushing Over Greenwashing: Only 2% of US companies over-promote their ESG efforts, while 58% under-promote them, reflecting a cautious approach to avoid greenwashing accusations.
2. Transparency and Trust: 40% of companies offer a balanced view, aligning external communications with factual disclosures, thereby earning greater trust.
3. Transparency Gaps: Emissions disclosures show the largest transparency gap, with 67% of companies sharing more in reports than on social media. Governance disclosures are more balanced, with a 40% gap.

Dr. Lucy Walton, CEO of Connected Impact, emphasizes the need for ESG transparency: "Our data reveal that businesses are more likely to under-promote than over-promote their ESG initiatives. This cautious approach can deter investment and undermine credibility. We know a well-governed, transparent business attracts more investment and top talent."

As the pressure for ESG transparency grows, businesses must balance honest communication with accurate disclosures. Transparent ESG practices not only align with consumer and investor expectations but also drive long-term value and trust. Embracing transparency is not just about avoiding risks; it’s about seizing opportunities for growth and leadership in a responsible business era.

The Solution?

You guessed it! TransparenC. We actively support companies to maximize the return on investment of carbon related investments. In a market where the primary value is marketing goodwill (apart from the actual environmental and social impact), very few companies actually market their carbon projects investments. We believe by visualizing actual project impact in a digestible and intuitive format, companies can fundamentally increase widespread trust in carbon markets, selfishly maximize ROI and eradicate the need for silly terms like "Greenhushing".