Companies Aren’t Sharing Climate Goals to Avert ‘Greenwashing’

Companies are increasingly attempting to shield their climate commitments from public scrutiny.

Source: Bloomberg | Published on October 25, 2022

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According to a survey conducted by South Pole, a climate consultancy and carbon offsets developer, the phenomenon known as green hushing has become pervasive even as businesses set more ambitious internal targets.

South Pole polled 1,200 large companies from 12 countries, all of which have set net-zero targets and more than two-thirds of which are classified as "heavy emitters." It discovered that, while the majority of companies have set science-based targets to help them meet their commitments, 23% "do not intend to publicize" them.

According to the findings, the stigma of so-called greenwashing, in which a company exaggerates its green credentials, is so feared that executives will go to any length to avoid being accused of it. Being labeled a greenwasher brings with it reputational damage, financial harm, and, increasingly, regulatory scrutiny. When a company's reputation is tainted by such allegations, it can be difficult to restore it.

Green hushing, however, has a cost, according to South Pole.

"More than ever, we need companies that are making progress on sustainability to inspire their peers to get started," said Renat Heuberger, CEO and co-founder of South Pole. "This is impossible if progress occurs in silence."

South Pole's third annual survey of corporate attitudes toward net zero shows how much has changed in 2022. In the run-up to the COP26 climate summit last year, hundreds of companies around the world "publicized" net-zero targets through high-profile campaigns. ” However, with less than a month until this year's COP27, there is a "growing reluctance to publicize science-aligned climate targets," according to South Pole.

According to the survey, businesses are "exploring all the tools in the climate toolbox" to achieve their net-zero goals, with the preferred methods for doing so including switching to renewable energy sources, improving energy efficiency, and "addressing Scope 3 emissions," which cover a company's carbon footprint across its value chain.

Companies are also counting on "technological innovation swooping in to save the day," according to South Pole. Green or low-carbon hydrogen and carbon removals, either through so-called nature-based solutions or technological removals such as carbon capture and utilization, are examples of such technologies.