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Environmental, social, and governance risks and opportunities

Green Hushing versus Confidentiality

Companies with environmental successes choosing to stay quiet and not publicize them

There is a new answer to the philosophical question, “If a tree falls in a forest and no one is around to hear, does it make a sound?”

The answer has depended upon your definition of sound. If you define sound as our perceptions of vibrations that travel through air (vibrations from a falling tree), sound does not exist if we do not hear it. But today we are being told to define sound as the airwaves themselves and that whether or not they reach a person’s ear, the sound is being produced.

Green Hushing is the new phenomenon of companies with environmental claims and successes choosing to stay quiet and not publicize them.

In a survey released by South Pole last month as widely reported in print media, “We found a surprising trend: nearly a quarter of these surveyed global climate leaders will not be publicizing their achievements and milestones,” according to Renat Heuberger, CEO of the Swiss environmental consulting firm, who concluded it is impossible “to address climate change on the scale that is required .. if progress happens in silence.”

The survey went on to decry,

“This is a concerning trend, as less public-facing communication makes targets harder to scrutinize and limits knowledge sharing – which in turn could result in missed opportunities for sectors to work together to decarbonize. It could also give the impression that climate leaders are failing to lead, at least in the public eye.”

This is the first time South Pole surveyed green hushing, so it is not clear that staying quiet is on the rise.

Actually, the term green hushing was coined anecdotally in academia in 2008 to allude to a contrasting concept to “greenwashing” in the tourism industry describing “green hushing as the deliberate managerial undercommunicating of corporate social responsibility (CSR) efforts for fear of negative customer opinions and responses.” That 2008 academic paper found “little justification for green hushing in a hospitality context from the customers’ perspective,” but such may not be the same today in this era of ESG disclosures.

Consider if Dutch airline KLM had chosen to stay quiet given the pending greenwashing lawsuit in the Amsterdam District Court alleging the airline is making misleading advertising claims when among other statements it advertises the airline “is on track to reduce its emissions to net zero by 2050.” As we describe in our post, New Greenwashing Case is Troubling to Future of ESG, the suit challenges KLM’s future net zero goal saying it “undermines the urgent action needed to minimize climate catastrophe.”   

And be aware the SEC’s March 21, 2022, proposed ESG rule will require a company that has publicly announced a GHG emissions target or goal (e.g., including committing to be carbon neutral by 2030, or the like) to disclose GHG emissions from upstream and downstream activities in its value chain (i.e., Scope 3 emissions). Accepting how uncertain Scope 3 emissions are, the rule even proposes a safe harbor for liability from the SEC from Scope 3 disclosures (.. but not from state regulators or private actors). 

However, hosts of environmental interests, many unsophisticated, are piling on, criticizing ESG sensitive businesses as green hushing for saying too little or in the current vernacular, “going green but going dark.”

That said, there are very good reasons to stay quiet at times. Businesses can avoid charges of greenwashing and resultant litigation simply by saying little or nothing.

For many businesses, environmental claims are simply not part of their value proposition.

And there is existing federal government regulation of green claims by the SEC and FTC with more now proposed by the SEC and to be proposed by the FTC in the coming days.

As a law firm, we have long shielded businesses with confidentiality and attorney client privilege in environmental matters, ranging from ordering Phase 2 Environmental Site Assessments to commissioning scientific studies and engaging academics for research; and those longstanding strategies for mitigating risk remain valid today.

And it is not just our clients, a significant number of LEED projects, the most widely used green building rating system in the world, are registered as private and others are even uber confidential (e.g., a government spy facility that is LEED certified). And dramatically more Arc registered spaces, the largest database of the green built environment, are not public on the platform. 

Also appreciate that utility consumption data, including electricity, gas, and water (key to greenhouse gas calculations), is often not available to a landlord when the tenant pays for the utilities and vice versa if the landlord pays. Additionally, utility consumption data (and a host of other information) is at times “classified information” required by the U.S. government to be safeguarded both in civilian and military contexts.

Moreover, proprietary material and information relating to a company’s products, business, or activities, including trade secrets, product research and development, existing and future product designs and performance specifications, know-how, and so much more company information is confidential and not available to the government or to the public, can have a positive effect on society including promoting innovation and driving the development of new products that may even positively impact climate change, when the proprietary information remains undisclosed.

We urge our clients and friends to ignore the naysayers. We disagree with the idea that you are damned if you do and damned if you don’t. We do not need to hear the tree falling to know that it toppled over. There are very real reasons companies keep some matters confidential away from the ears of others. 

So, as businesses navigate the turmoil around ESG, we suggest this is not the right time to adjust your marketing. Some business matters are best and properly kept quiet.

Live webinar “Green Hushing vs Confidentiality,” 30 talking points in 30 minutes, this Wednesday, November 16 at 9 am EST presented by Stuart Kaplow and Nancy Hudes on behalf of ESG Legal Solutions, LLC. Webinar is complimentary, but you must register here.

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