A quarter of 1,200 companies surveyed say they would not publicize their net-zero emissions targets
By Madeleine Speed
A trend known as “green hushing” is growing as companies are increasingly choosing not to publicize details of their climate targets in an attempt to avoid scrutiny and allegations of greenwashing, a new study showed.
A quarter of the 1,200 companies in 12 countries surveyed said they would not publicize their science-based net-zero emissions targets, a road map for reducing emissions in line with the goals of the Paris agreement, said climate consultancy and carbon offsets developer South Pole.
This was despite the proportion of respondents setting science-based targets that had more than tripled from the previous year to 72 per cent.
After the COP26 climate summit in Glasgow last year, companies raced to tout their sustainability credentials. But the ensuing flurry of climate pledges opened companies up to allegations that their targets were unsubstantiated or misleading.
Lawsuits over greenwashing in ad campaigns have since been filed against oil companies such as TotalEnergies, while financial regulators are cracking down on lax oversight at ESG-branded investment funds.
“There is a high degree of scrutiny now around anything to do with professing your sustainability,” said Michael Wilkins, head of Imperial College London’s Centre for Climate Finance and Investment. “Together with the ESG backlash, I think it is scaring a lot of companies.”
Companies are also aware that the integrity of frameworks used to measure sustainability is being called into question. The Science Based Targets initiative (SBTi), which has become the arbiter of corporate climate action, has faced complaints about its governance and potential conflicts of interest.
“You have to pay the initiative to be accredited, which leads to the assumption that you’re paying to get yourself a good score,” said Wilkins. “This can taint the company trying to follow the targets.”
SBTi charges companies US$9,500 to have their climate targets assessed.
Companies may be implementing legitimate targets but not disclosing them due to the politics around climate change in their region, said Nina Seega, research director for sustainable finance at the Cambridge Institute for Sustainability Leadership.
In the U.S., the state of Texas in 2021 passed a law that attacked ESG investing for damaging the fossil fuel industry on which it relies economically, and this year accused BlackRock and nine other financial groups of boycotting oil and gas.
“We know that climate and sustainability goes hand in hand with profitability. However, if the overarching discourse in their country is contrary to that, they might not want to attract the ire of customers or beneficiaries,” said Seega.
Climate groups have long called for stronger disclosure requirements in order to drive competition between companies to up their commitments.
Green hushing, by contrast, makes targets harder to scrutinize and could deter businesses from setting more ambitious goals, said Bethan Halls, sustainability adviser at South Pole.
“If green hushing becomes a trend, it will make inspiring some of the climate laggards even harder,” she said. “As long as companies are transparent about their progress, and communicate that in a transparent way, then they can’t go wrong.”
Despite the caution reflected in the survey, South Pole found that companies were setting more net-zero targets than ever before, with more science-based targets to back them up, and to more ambitious timelines.
“It’s great that we’ve got more organizations setting SBTs,” said Seega. “Perhaps it’s a sign of climate going mainstream that they don’t feel the need to scream about it.”
© 2022 The Financial Times Ltd
Source: Financial Post