Why do Firms Do It?
Well, for various reasons. In the US, where public companies can be sued for violating their obligation to increase shareholder profits, firms 'green hush' to avoid costly litigation. In conservative states that have experienced a strong ESG backlash, regulators have turned their attention to sustainable investments, prompting firms to stop talking about their green efforts.
Some firms avoid advertising their green products because consumers often associate ‘green’ with lower quality, higher costs or reduced performance, even when this isn't true.
Research in the tourism industry shows that sustainable businesses communicate only a fraction of their environmental efforts to avoid discomfiting their guests. When on holiday, people like to indulge and do not necessarily care about everyday concerns like climate change, resource depletion, or unsustainable lifestyles. When sustainability is inconvenient, tourism businesses prefer to take environmental measures “behind the scenes” and “out of sight” to not upset their customers’ sense of indulgence.
Some companies remain silent about their environmental commitments to avoid scrutiny. Firms that promote themselves as environmentally responsible are often held to a higher standard than those that do not. Beating the drum can attract excessive attention and raise expectations about future commitments. In other words, firms tend to hide their climate goals to avoid scrutiny and questions about how they would achieve them.
Why Certified Firms Green Hush
Carbon-neutral certified firms remain silent for two major reasons – lack of customer demand and to avoid greenwashing accusations. Few consumers know about carbon neutrality or ask for carbon-neutral products. Without the demand from customers, companies are reluctant to spend money on advertising their carbon neutrality.
Many firms prefer to remain silent, wary of being publicly accused of greenwashing. The fact is that public accusations of greenwashing can harm a firm’s image and cause reputational damage to brands. Green hushing is, therefore, seen as a safer bet even by businesses genuinely committed to climate action and to adopting green practices.
Why Firms Become Carbon-neutral Certified
Some are driven by competitive motives. Carbon neutrality helps differentiate companies from their peers and attract talent and access finance at better terms. Other firms see carbon neutrality as a strategy to maintain their social licence and improve stakeholder relationships.
Finally, ethically-motivated firms become certified because it’s the right thing to do. Their passion and responsibility for the environment are the major drivers behind environmental sustainability. However, these firms differ in how they communicate their green credentials. Competitively-driven firms are proactive in promoting their carbon-neutral status. Firms motivated by altruism and a desire to maintain their social licence, on the other hand, are more reluctant to communicate and tend to green hush.
Is Green hushing on the Rise?
A recent report by Swiss-based climate consultancy South Pole revealed that companies across nearly all sectors are engaging in green hushing. Its global survey of 1400 sustainability executives discovered 58% of companies are intentionally dialling down their climate communications because of greater regulation and scrutiny. Despite their affirmative actions, including financing net zero goals, these companies refrain from publicising their efforts – something South Pole observes is a worrying trend.
Should We be Concerned and What Can Be Done?
When green companies communicate their environmental achievements, they make solutions more visible, which could motivate others to copy them. Green hushing, however, is a step in the opposite direction. While the reasons for being silent differ from case to case, a few things can reverse the trend. First, companies can emphasise that environmental sustainability is a journey and not a destination. Engaging their audiences and highlighting their efforts for continuous improvement can reduce criticism and allay concerns about greenwashing accusations.
Second, better regulations can bring clarity, build trust, and level the playing field. The EU’s Greenwashing Directive, approved earlier this year, is a positive step in this direction. Finally, educating consumers about sustainability can increase awareness of environmental efforts and help them to better understand what different terms mean. This can lower their negative association with green products, and choose companies that are more sustainable.
(Stephan Dua-Modest is a PhD Candidate and Research Assistant at Monash Business School, and the Woodside Monash Energy Partnership)
