Companies who are scared of greenwashing are now engaging in greenhushing, or refusing to say anything about what they’re doing around sustainability and environmental initiatives for fear of facing adverse action.
Greenwashing is defined by the ACCC as "a business using any claim, or omitting key information, that makes a product or service seem better or less harmful for the environment than it really is".
United Nations Global Compact Network Australia’s (UNGCNA) executive director, Kate Dundas, said that there are a large number of businesses reporting to UNGC that they are intentionally greenhushing, because they are concerned that they're not able to substantiate their sustainability claims or they're worried they’re going to get taken to court for misrepresentation.
“That's not at all what we want. We want business to be able to talk about what they've learned, what they've done wrong, how they're going to do better next time,” she said.
The lead consultant for Publicis Groupe's sustainability consultancy Salterbaxter Australia, Tess Ariotti, said greenhushing is just another form of greenwashing, because it's not accurately representing the sustainability actions that a business is taking, and therefore it's not accurately and comprehensively communicating with their stakeholders on matters of importance to their business.
“While some might view greenhushing as helping to avoid some legal risks, there are other risks created by not disclosing to stakeholders what you’re doing - issues that have a material impact on a business, such as reputational risks, employee risks and a lessening of competitive advantage,” she said.
Last week, corporate regulator ASIC landed its first greenwashing case with Mercer Superannuation ordered by the Federal Court to pay a $11.3 million penalty.
The fund admitted it made misleading statements about the sustainable nature and characteristics of some of its superannuation investment options.
Ariotti said that marketers and businesses are starting to understand that this is a risk for their business, with such rulings revealing the consequences of communicating false statements to the market.
“When companies started working in sustainability, it created a sense of excitement and desire to communicate what they’re doing, which is great, but sometimes it doesn't have the knowledge behind it or the deep understanding of the full implications of what those claims that they're making are, and that is where marketers, communicators and businesses in general can get stuck,” she told AdNews.
The UNGCNA recently partnered with Salterbaxter and digital workforce learning provider Cahoot Learning to develop an anti-greenwashing training course for marketers and communicators.
The course, Greenwashing: Time to stop the spin cycle, was developed after the ACCC did an internet sweep of 247 Australian businesses and found 57% were making concerning claims about their environmental credentials.
Dundas said one of the takeaways the UNGCNA found from the course is there's a high awareness that greenwashing is a problem, but a low awareness of what that actually means in practice, with the bulk of greenwashing content coming from little sustainability knowledge and poor internal practices.
“While most Australians have heard the terms net zero and carbon neutrality, no one actually knows what that means at all; it's just all this waffly jargon,” she said.
“Businesses that are really trying to do the right thing, it costs money, and businesses who are saying they're doing the right thing, but are not, they gain an unfair competitive advantage.”
Ariotti said the course is designed to respond specifically to helping people avoiding greenwashing, but it contextualises itself in sustainability as a business function.
“There has been a lot of participants report that they do have increased confidence to then address this in their business - they're asking the right questions, they're challenging actions or decisions and they can do that in a professional and confident way, because they've got that knowledge," she said.
Ariotti said part of the shift also has to come from businesses themselves, adjusting their mindset from thinking of avoiding greenwashing as a problem for marketing and communications professionals to handle and instead be a whole of organisation responsibility.
“You need to have the credible action that might be done through operations or commercial arms or procurement and then how you communicate that is when you start to involve marketers and communicators,” she said.
Dundas emphasised that it’s important to remember that not all companies who are greenwashing are being intentionally misleading when it comes to their claims of sustainability.
“Some of them are intentionally misleading, and that's why we need legislation to really stamp that out; we need education for those who just need education and legislation for those who are intentionally misleading,” she toldAdNews.
“Studies show that climate related keywords in annual reports rose sharply from 2009 to 2020, with a company like BP using the word climate change 22 times in 2009 and 326 times in 2020. However, the actions do not follow suit. Fossil fuel continues to expand. Emissions continue to rise.
"They are intentionally greenwashing, but there's other companies who are not.”
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