If a survey out this week is to be believed, the corporate drive to reduce carbon emissions may be at risk of shooting itself in the foot.
‘Green hushing’ has been the subject of multiple headlines, with the study by climate consultancy South Pole outlining that a quarter of 1,200 companies questioned had chosen not to declare their science-based net zero emissions targets, because they feared increased scrutiny and allegations of greenwashing if they did so. Separately, HSBC is the latest company ot be pulled up by the Advertising Standards Authority over its environmental claims.
It points to a pretty stark divide, given that 72 per cent of companies said they had set such targets, triple the level last year.
As this piece on the survey in the Financial Times illustrates, stating targets publicly and outlining intended progress towards them can now be forced under the microscope to the point that staying silent is seen as less of a reputation risk.
It’s a neat headline, as any new green ‘phenomenon’ tends to be initially. But it does raise the spectre of how non-transparency will play out as a risk management in the long run.
According to the Business Times, such an approach could actually slow broader decarbonisation efforts.
Silence is hardly a new strategy - indeed, it’s often a good one. Interestingly, the study also showed that fewer UK companies have set targets publicly than any other country examined, indicating that more companies here choose to play their cards close to their chest than their international counterparts.
And this piece points out that some companies may opt not to disclose targets fully because they worry about being accused of ‘not doing enough’ - although surely not having set out any target whatsoever is the pinnacle of inaction, unless stakeholders are supposed to take it on trust than climate-positive change is happening behind the curtain?
The underlying issue, unless I’m reading it incorrectly, remains the lack of - or flimsy - standards around ESG reporting, to the point that companies may feel they have to take a calculated risk not to state their targets because of wanting to avoid being labelled a greenwasher if they do. But with clear and robust standards more established, concerns over greenwashing should diminish as positive action becomes more black and white.
Do that, and fears of green hushing should quieten down.
The ESG News Review is written by Steve Earl, a Partner at BOLDT.
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