Companies are hiding their climate progress. A new report explains why. – Grist

For decades, environmental advocates have been pushing back against greenwashing, when polluting companies misleadingly present themselves as environmentally friendly. Governments are finally starting to tackle the problem with stricter regulations: The European Union agreed to ban deceptive environmental ads in September, and the U.S. Fair Trade Commission is in the process of updating its guidelines around green advertising.

But as new rules go into effect, theyre contributing to a different problem: Many companies, even honest ones, are afraid to talk about their work on climate change at all.

The practice of greenhushing is now widespread, according to a new report released on Tuesday by South Pole, a Switzerland-based climate consultancy and carbon offset developer. Some 70 percent of sustainability-minded companies around the world are deliberately hiding their climate goals to comply with new regulations and avoid public scrutiny. Thats in contrast to just a few years ago, when headlines were full of splashy corporate promises on climate change and even oil companies were pledging to zero out their emissions. The report suggests that this newfound silence could impede genuine progress on climate change and decrease pressure on the big emitters that are already lagging behind.

South Pole found that climate-conscious companies in fashion, consumer goods, tech, oil, and even environmental services are greenhushing. Nearly half of sustainability representatives reported that communicating about their climate targets has become harder in just the past year. But companies arent giving up on going net-zero just the opposite. Of the 1,400 companies surveyed, three-quarters said they were pouring more money than before into efforts to cut carbon emissions. They just didnt want to talk much about it.

We really just cannot afford to not learn from each other, said Nadia Khknen, a deputy director at South Pole and the reports lead author. Companies should be sharing the lessons theyve learned from trying to cut their emissions, engaging one another in hard conversations about what is working and what is not, and how we can improve it, she said.

Greenhushing was the most common, unexpectedly, among the greenest companies. Some 88 percent of those in environmental services, a category that includes renewables and recycling, said they were decreasing their messaging about their climate targets, even though 93 percent said they were on track to meet their goals. Consumer goods companies, like those that sell food, beverages, and household goods, were the next likely to be greenhushing (86 percent), more than the oil and gas industry (72 percent).

The survey, conducted anonymously, is the first to offer insight from companies as to why theyre keeping quiet. Environmental service companies had one of the same top reasons as oil companies: heightened scrutiny from investors, customers, and the media. Among all the companies that admitted to greenhushing, well over half listed changing regulations as a reason why theyre not talking about their climate pledges. Some companies also cited a lack of sufficient data or clear industry guidance around how to communicate their green claims.

Their hesitation has real consequences, researchers from South Pole said. For one, it cuts down on the sense of competition and pressure that can drive companies to be more ambitious with their environmental targets. If youre hiding what youre doing, or not talking about it in a prominent way, it can hold back others, said George Favaloro, South Poles head of climate solutions for North America. The trend also could also cut down on sharing tips and tricks for decarbonizing that could help others trim their carbon emissions.

The report found that greenhushing isnt unfolding equally across the 12 countries surveyed. American companies arent as quiet likely because the United States has less regulation around environmental claims. U.S. companies were the second least likely to be greenhushing, behind Japan. European companies were on the opposite end of the scale. France, which has laws that explicitly limit greenwashing, led the pack with 82 percent of companies staying mum.

Theyre really up against it in Europe now, and in the U.S., its still a bit off in the future, Favaloro said. Its coming, but its not quite here yet. One of the first anti-greenwashing laws in the U.S. went into effect in California earlier this month, mandating that large companies disclose their emissions to back up climate-friendly claims. Lawsuits are also a growing threat: Last year, Nike and Delta Air Lines were sued for making questionable claims about their environmental impacts.

It might be surprising that U.S. companies are unafraid of communicating their climate goals considering the conservative backlash against ESG, short for environmental, social, and governance, a set of standards investors use to assess companies. But the ESG drama has more serious consequences for asset managers like Vanguard and BlackRock, which removed references to sustainability goals on their websites last year, than for corporations.

The 1,400 companies surveyed in the South Pole report are some of the furthest along when it comes to corporate climate action. Overall, however, most companies havent even started yet. Only 8 percent of a broad group of 77,000 corporations, which includes global Fortune 500 companies, have set a net-zero target, the report found. The more that even the leaders dont talk about what theyre doing, its going to provide less motivation to get that group in the game, Favaloro said.

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Companies are hiding their climate progress. A new report explains why. - Grist