The Carbon Border Adjustment Mechanism (CBAM)
11 min
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In this article we’ll explore what the CBAM is, why it’s been created, and what importers need to know ahead of its introduction.
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Mitigating sustainability backlash: A new challenge for companies
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With a growing fear of backlash from consumers and regulatory bodies, companies are increasingly cautious about how they present their environmental efforts. This has given rise to 'greenhushing,' a growing phenomenon where businesses choose to stay silent about their genuine sustainability initiatives, wary of drawing criticism or accusations of greenwashing. While greenwashing involves making exaggerated or false claims about a product or service’s environmental benefits, greenhushing represents the other end of the spectrum, as companies opt for discretion over disclosure.
👉 In this article we’ll explore why a growing fear of backlash has given rise to greenhushing, and the negative impact that it has on the net zero transition.
What is greenhushing?
Greenhushing is where a company deliberately refrains from talking about or publicizing its sustainability goals or efforts (even if they are well-intentioned and the company has made strides towards achieving these targets) for fear of receiving backlash or being accused of greenwashing.
The very nature of the practice means that it’s not easy to spot, however, research suggests that it’s actually very widespread. A study by Swiss carbon finance consultancy firm South Pole highlighted that a quarter of respondents did not publicize sustainability achievements “beyond the bare minimum”.
“ Studies show that one in four companies avoid talking about their net zero commitments or sustainability targets! ”
The reason behind the rise of the greenhushing phenomenon is not that companies are backing away from establishing sustainability targets, or that they don’t want to work towards net zero. In fact, these companies are setting science-based net zero targets, with increasing budgets to support their ambitions. The issue is that they are increasingly reluctant to publicize these targets or their efforts.
So what’s the reason these companies are staying quiet? Well, the main reason is fear of backlash, let’s explore this in more detail…
The sustainability backlash
Being accused of greenwashing
With widespread awareness of greenwashing among customers and the media, there’s increased skepticism when it comes to a company’s eco-claims and environmental targets. This increased scrutiny makes companies more wary of publishing their ambitions or results.
Even with the best of intentions, it’s possible that a company makes a mistake and finds itself being called out for making misleading or exaggerated claims. This can be really bad news for a brand's reputation. A whole range of different stakeholders - from customers to clients to investors - care about sustainability and corporate transparency. Companies accused of greenwashing can face significant backlash and even lose out on business, investment, and customers as a result.
👉 To learn more about greenwashing, head over to our article.
Glass half empty
Other studies have found that companies are reluctant to talk about sustainability - even when they’re making progress - for fear that clients and customers will take more of a ‘glass half empty’ approach.
Take the example of supermarkets labeling some products as ‘fair trade’ (a trading partnership that ensures fair pay, usually between a company in a developed country and a producer in a developing country). Even though the stocking of Fairtrade products is a good thing, some supermarkets have reported that customers focused on the negative and wanted to know why all of the products were not fair trade. The result is that companies find it easier to talk about sustainability altogether.
Legal concerns
The laws and regulations around green claims are tightening, with restrictions on what companies can and can’t advertise becoming more and more stringent every year. And for good reason - in the past companies have been able to get away with greenwashing and deceptive marketing, leading consumers to falsely believe that products are more sustainable than they actually are.
However, this has also made companies more hesitant to talk about sustainability or environmental claims even where these claims can be substantiated. This is particularly true for companies operating in the US as the country is more litigious than other jurisdictions.
Concerns that they might not reach sustainability goals
Another consideration that gives companies pause for thought when it comes to communicating their sustainability targets and progress is concern that they might not be able to reach their goals, resulting in more backlash than if they’d not said anything in the first place.
Even if a company makes genuine efforts to achieve its goals, sometimes it may fall short, which can damage the company’s reputation and result in negative publicity.
Politicization of sustainability
Sustainability shouldn’t be a point of contention, but sadly in some countries - particularly the USA - sustainability has been victim to the ‘anti-woke’ sentiment. Increasing numbers of people are turning against companies that purport sustainability sentiments, which has caused some companies to turn away from talking about sustainability altogether.
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Why does greenhushing matter?
You’d be forgiven for wondering why greenhushing is a problem - if companies are continuing to work towards their sustainability goals, albeit silently, what’s the issue?
The problem is that greenhushing may slow down environmental progress. When companies share their sustainability targets and communicate their progress transparently they’re helping to change the culture of sustainability in the corporate world. This has a significant effect on consumers and other companies in the market - for example, if all your competitors are working to reduce their environmental footprint, you risk being left behind if yours is the only company that's not on board. When companies are silent on their sustainability journey they make it much easier for other companies to get away with doing nothing and eschewing sustainability altogether.
The other problem is that it prevents consumers from making an informed purchase decision. Studies regularly show that the majority of consumers prefer to buy from sustainable companies. But when companies aren’t transparent about their own sustainability targets or actions, selecting an eco-conscious brand becomes very tricky.
Another consideration is that greenhushing can actually be used as a type of greenwashing. By hiding under the idea of being ‘quietly conscientious’ and being vague about their sustainability actions, companies may give consumers the impression that they’re more environmentally conscious than they really are.
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Why companies that participate in greenhushing are missing out
Greenhushing can lead to significant missed opportunities for businesses that are genuinely committed to sustainable practices. Brands that engage in greenhushing often do so out of a desire to avoid backlash. However, this means they fail to connect with a growing demographic of eco-sensitive consumers who are actively seeking products and services from companies that align with their values. By not promoting their environmental initiatives, these companies lose out on the chance to improve their market attractiveness and differentiate themselves from competitors.
And it’s not just consumers who increasingly care about the sustainability of brands, it’s investors too. Investors are increasingly looking to back companies that demonstrate a commitment to sustainability, as these companies are seen as better long-term investments. By being transparent about their sustainability efforts, companies can attract financing and opportunities, helping to ensure their long-term viability and success.
👉 To learn more about the benefits of sustainability take a look at our article on the topic.
How can companies minimise the risk of backlash and avoid greenhushing?
Embrace transparency
Companies should openly share their sustainability initiatives, even if they are small-scale. Transparency about supply chains and business practices helps in building trust. Small businesses, in particular, can focus on behind-the-scenes looks and other means to showcase their commitment to sustainability, even if they cannot afford big certifications.
Admit imperfections and take responsibility
Brands should be confident enough to share their sustainability journey, including the setbacks. Yearly sustainability reports that honestly admit faults and describe steps toward meaningful improvements are valuable. This approach shows the brand’s commitment to transparency and continuous improvement.
Navigate legal landscapes
With stricter laws against greenwashing emerging, companies should stay informed and compliant, ensuring that their sustainability claims are accurate and verifiable. This approach helps in avoiding legal troubles and building a trustworthy brand image.
Educate consumers
Brands have a role in helping consumers understand the challenges and nuances of sustainability. By adopting an educational approach and explaining the measures taken, companies can contribute to public awareness and education on ecological issues.
Utilise independent verification
Engaging with third-party organizations for certifications, audits, or validations of sustainability efforts lends credibility to a company’s claims. This independent verification assures consumers of the authenticity of the company’s commitments.
Ensure consistency in actions
Maintaining consistency between what is said and what is done is paramount. A company that aligns its actions with its sustainability commitments is more likely to build trust among consumers and avoid backlash.
Get help with communication
Collaborating with agencies and partners that have expertise in communicating sustainability can help in avoiding the pitfalls of greenwashing and greenhushing. These partners can guide companies in sharing their environmental commitments authentically and effectively.
👉 Why not enlist the help of Greenly? Our experts are on hand to help companies communicate their sustainability journey in the most effective way, reducing any risk of greenwashing and backlash.
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Round up
Amidst the escalating scrutiny surrounding greenwashing, companies are increasingly tempted to embrace greenhushing, choosing silence over the risk of potential backlash. However, this silence stifles progress in the fight against climate change and hinders the development of a transparent corporate culture. Companies need to foster transparency, honesty, and consistency in their actions to build trust with consumers, stand out from the competition, and actively contribute to the collective awareness required to tackle the climate emergency.
Finding a middle ground between the extremes of greenwashing and greenhushing is crucial. By communicating their genuine environmental efforts in a clear and truthful manner, companies can play a pivotal role in the global sustainability movement, bolstering their own reputations while driving meaningful change.
What about Greenly?
At Greenly we can help you to assess your company’s carbon footprint, and then give you the tools you need to cut down on emissions. Why not request a free demo with one of our experts - no obligation or commitment required.
If reading this article has inspired you to consider your company’s own carbon footprint, Greenly can help. Learn more about Greenly’s carbon management platform here.
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