Greenhushing, greenwashing & bad ESG

MAKING exaggerated environmental claims about your green credentials in company literature, investor prospectuses and published financial accounts in order to benefit your finances or reputation has long been recognised as “greenwashing”.

Though in response the SEC has (finally recently) gained some legislative teeth to punish the most egregious who can’t actually verify their most outlandish ESG and climate irresponsible claims, it is hard to believe - beyond the hyperbole - that there seriously is going to be a counter-epidemic (for legal anxiety reasons) of so-called “greenhushing”.

With greenhushing the new investment climate crisis portmanteau word kid on the block – is describing a mostly imaginary situation where fear of legal jeopardy - often about exaggerated eco claims – is the anxiety and silence apparently provoked by ESG something of a self-serving myth or reality?

To my mind, the difference between so-called ‘greenhushing’ and doing nothing is almost impossible to tell apart. The idea that the SEC has made this self-silencing alleged outcome happen by requiring companies to validate their environmental credentials is a strange reading of their legalisation since that applies to false or exaggerated claims. Old school “greenwashing” talked – often shouted – its fake or exaggerated climate credentials. Whereas, if these ESG claims and climate investments are verifiable, why would there be a kind of hush over helping make it a better world?

What all these vocabulary changes connote is that the absence of the concept of ESG having an widely agreed definition is, perhaps, problematic since it is often something that only exists in the eye of its beholders? Larry Fink of BlackRock was briefly an ESG evangelist in financial investment and stewardship circles before having violent reformed-smoker style second thoughts pooh-poohing its benefits and utility before completely no-platforming the term ESG.

From a concrete actions point of view, apart from the noise (or lack of it) how on earth are our investors, employees, customers and institutions supposed to tell ESG or climate deniers apart from these new-fangled mostly fictitious apparently gung ho but silent green-hushers? It is the case that the big-fossil-fuel-industrial-complex is more currently confident and ebullient – not least with its current reinvigorated political support – but, in this context and post-COP29, with ‘clean energy’ nonetheless still the future making robust environmental investments and other ESG-led financial decisions is going to even more of a differentiator and competitive advantage.

For those not crying green wolf and, thereby, falling foul of the SEC, I would ask: why would you keep quiet about your eco and green facing investment decisions? For future generations, this indifference of investment finance towards sustainability, environment and the climate crisis – or, its alleged ‘greenhushing’ - is a betrayal that turns the climate good governance clock back to a yesterday once more, albeit one with a much darker investment, growth and sustainability future.

Photo credit: ESTINAJ