Greenhushing' May Not Be the Best Policy

Companies are under pressure to tone down on climate issues. They should resist it.

- Barry Porter

Companies now more frequently refer to climate change as a "business risk" rather than a matter of morality. They talk about "supply chain resilience" and "operational efficiencies" rather than "ethical commitments" or "corporate responsibility".

Executives who once gushed about aggressive climate and environmental, social and governance (ESG) goals are now sitting quieter on their progress, or lack of it. By turning down the volume, they are engaging in something that now has a name: "greenhushing".

US President Donald Trump and his climate change-denying followers are not the sole cause of this language shift. Tuning down the volume on climate-related advocacy began before his return to power, with three shifts already emerging:

Exaggeration: Companies previously set highly optimistic net zero targets for 2030 or earlier. As deadlines near, they do not want to be seen as struggling.

Regulation: Firms fear regulatory or legal challenges if they make false claims. Asia-Pacific countries are following the European Union in clamping down on greenwashing.

Attrition: Investors have not seen sufficient proof of ESG benefits in financial performance, pushing firms to prioritise short-term profits.

Add to this mix: Mr Trump, tariffs and inflation. Businesses in the US and Asian firms doing business in the US fear political reprisal from Mr Trump's administration and his followers for pursuing so-called "woke" green or diversity agendas.

At the same time, inflation and tariffs are making discretionary spending on ethical projects harder for executives to justify. Some see these as privileges only rich firms can afford, particularly in emerging Asia.

With all this in mind, saying as little as possible is now often being recommended. That may not be wise.