How to avoid ‘green hushing’ without resorting to ‘greenwashing’ 

  • 16 February 2024
  • Blog | Green Finance | Blog

How to avoid ‘green hushing’ without resorting to ‘greenwashing’ 

We’re all familiar with the concept of ‘greenwashing’; the act of using marketing claims to mask negative environmental activities. Not only has this practice been widely exposed by critics and the media, but it has gained the attention of regulators, with several jurisdictions passing laws against the practice in recent years—including the EU and UK. 

Growing cultural and regulatory pressure to avoid greenwashing has lead to the rise of its opposite; a practice now known as ‘green hushing’. This is when companies deliberately downplay their sustainability credentials in order to avoid greenwashing accusations.  

While this may be understandable, it can have the affect of distorting market perceptions of sustainability and hindering customer choice; if your company is doing great work around the environment, your customers will want to hear about it.  

So how can FS companies champion their sustainability credentials without committing greenwashing and without succumbing to green hushing? 

Get your definitions right 

The caution that many companies have around their green claims is often the result of a lack of understanding of what it means to underclaim about your activities, versus what it means to overclaim. By becoming familiar with the definition of greenwashing in your jurisdiction you can have the confidence that your green claims fall within regulations.  

An excellent point of reference is the EU’s proposed Green Claims Directive. Under its auspices, companies would be required to ensure that their green claims are specific and proportionate. For example, specifying whether certain claims apply to the entire business or just certain aspects of its operations. It also requires that generic claims that products are ‘eco-friendly’ or ‘more sustainable’ are backed up by firm evidence and that companies are transparent about the impact of their operations across the entire value chain.  

Collaborate with your peers 

If companies are to avoid green hushing, they need to work together to agree on and promote best practices around green claims within the FS industry. This can give all market participants greater clarity and confidence over which claims are appropriate (and can be shouted about) and which aren’t—and should be avoided.  

In order for this kind of collaboration to be effective, businesses need to be open and transparent about their sustainability measures and the veracity of their green claims. This requires sharing information where possible and setting the bar high enough to ensure ethical adherence while supporting smaller firms in their communication efforts.   

Embrace the opportunities in going green 

Some companies see sustainability-related obligations as potential impediments to their growth potential, with more resources being required to make their operations sustainable and requirements for greater scrutiny over their environmental messaging. This can lead to companies ignoring incorporating green claims into their marketing for fear that it will be ‘more trouble than it’s worth’.  

Instead, FS firms should learn to embrace the potential in telling the world about their environmental activity. The UN’s Special Envoy on Climate Action and Finance, Mark Carney, has said that investing in net-zero “could become the greatest commercial opportunity of our time,” explaining that “we need fifty shades of green to catalyse and support all companies toward net zero.” 

How can financial firms achieve this if they don’t responsibly share their sustainability stories? 

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