Greenhushing
You may have heard of Greenwashing, but have you heard of Greenhushing?
When organisations avoid mentioning or drawing attention to their emissions reduction/carbon offsetting targets and progress for fear of scrutiny and backlash in the form of bad-press.
In the Law:
Regulators have been urging companies to avoid using ‘anti-greenwashing disclosure rules’ as an excuse not to showcase ESG credentials. With ASIC warning against engaging in the practice of limiting or ceasing voluntary disclosure due to concerns about insufficient support for ESG claims.
In the Company Boardroom:
In an alarming trend, companies are withdrawing their climate commitments in response to regulatory scrutiny remains a widely debated topic within corporate boardrooms. A survey by Swiss-branded carbon consultant South Pole indicates approximately 23% of 1,200 companies have chosen not to disclose their net-zero commitments. The report has triggered a global discussion, with many criticising silence as another form of greenwashing.
In the Investment Houses:
Increased focus on greenwashing inspires investor confidence, while Greenhushing leaves analysts in the dark. Investors and other stakeholders require a clear understanding of company actions. Those engaging in Greenhushing practices risk reputational damage, potential financial liabilities, and ESG-related downgrading by investment professionals.
Our View:
While increased regulatory scrutiny regarding greenwashing is a positive development, it is imperative not to lower ESG ambitions. Companies need not worry if ESG claims are substantiated. Alignment of sustainability and financial reporting, and the use of third-party assurance measures can build confidence of Board / management teams regarding accuracy of information shared.
For additional information on this topic or ESG assistance, contact us today at info@anabranchesg.com.au
