“Green hushing”, the emerging trend for companies to stay silent about their positive environmental efforts, makes it more difficult for consumers to choose eco-friendly options and discourages companies from taking meaningful sustainability actions.

America offers a good case in point, with a noticeable 31% decrease in green fund mentions on U.S. company earnings calls by mid-2023 compared to the preceding year. The UK soon followed, with a growing number of asset managers even removing the term “sustainable” from fund names.

So why is green hushing becoming an issue? Corporations hesitate to discuss their efforts to be environmentally friendly for several reasons.

Why companies hush

Firstly, they fear criticism from the media, NGOs, and the government if their efforts are seen as inadequate. Secondly, there is a concern about being accused of greenwashing, where their actions don’t match their promises.

This coincides with the growing anti-ESG backlash in the US. Recently, several prominent US financial institutions decided to withdraw from Climate Action 100+, an international coalition of money managers dedicated to pressuring large companies to tackle climate-related problems.

Lastly, companies worry about potential lawsuits and the high costs of defending themselves, even if they are innocent. Some companies choose to stay silent because the potential risks outweigh the potential benefits.

Giving up on green?

Nevertheless, there is still a movement towards incorporating ESG factors (environmental, social, and governance) into investment decisions without explicitly stating it. This suggests a growing recognition of sustainability’s importance.

In turn, new regulations and the ongoing demand among consumers for greener products and services will hopefully encourage companies to be more open about their sustainability efforts.

Thus, increased transparency and less green hushing would benefit both consumers and businesses, fostering a more sustainable future.