AMONG companies in Singapore which felt that climate communications were getting harder, close to 40 per cent of them were found to be greenhushing – or deliberately under-reporting their environmental, social and governance (ESG) initiatives – to avoid scrutiny, a survey by sustainability consultancy South Pole indicated.

In the report, 55 per cent of respondents here said they found it increasingly difficult to communicate their net-zero targets or climate goals to external parties, and have hence opted to reduce their external communications.

The phenomenon, however, is not unique to Singapore.

The survey results, which were recently published in South Pole’s net-zero 2024 report, found that greenhushing is increasing across countries and is present in every sector, with 70 per cent of listed companies that are finding communicating their net-zero goals more difficult, admitting to it.

This is despite the majority (81 per cent) of surveyed respondents claiming to be on track to meet their net-zero goals.

Since setting their net-zero targets or investing beyond their direct value chain on their way to net zero, nearly half (44 per cent) of the respondents found that communicating their climate goals has become more difficult than before.

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The vast majority of surveyed companies (93 per cent) recognised that communicating their net-zero goals was critical to their business and vital for current or future commercial success. But many are staying quiet about their climate action and progress.

Of those that found communicating their climate-related efforts harder than before, 58 per cent said they are decreasing their level of external communication due to the increased difficulty. 

Among them, over half (57 per cent) said that changing regulations or more demanding industry requirements on environmental reporting and communications are the main reasons for decreasing their external communication.

Heightened scrutiny from customers (45 per cent), lack of sufficient data to inform claims (43 per cent), as well as increased media scrutiny (41 per cent) were other key concerns for respondents.

Investor pressure and scrutiny was ranked the least important reason on average, with only 38 per cent of companies listing it as a factor in decreasing their levels of external communication regarding climate efforts.

Interestingly, the survey found that the highest proportion of companies greenhushing came from the green sectors, specifically environmental services. Close to 90 per cent of environmental services companies admitted to greenhushing, more than any other surveyed sector, and even outstripping those working in oil and gas (72 per cent).

Unlike most other sectors, environmental services companies, alongside those in oil and gas and consumer goods, cited pressure from investors as the primary reason for greenhushing. This is unique to the sample, as most other sectors said that regulation is the main factor behind greenhushing.

The survey polled over 1,400 sustainability executives from across 14 sectors and 12 countries, including Japan, the United States, the United Kingdom, France and Germany.

South Pole said in its report that investors are now investing more in environmental services as part of their portfolio decarbonisation plans. When faced with new and complex regulations, investors are also limiting the risks presented in their investee companies communicating and making claims about climate action.

The report added that the trend of green companies leading the “hush” is highly concerning.

“It seems to us that the risk of being criticised is greater for companies founded on a green promise, as the bar for such companies is higher when it comes to climate action,” it said.

Because their business models tend to be more vulnerable, the risk of criticism for imperfectly communicating climate-related efforts or products is greater for companies in the environmental services sector, as compared with oil and gas.

“Ultimately, if we wish to see dramatic change and deter greenhushing, sectors must have a level playing field when it comes to communicating and evaluating climate action and ambition – and this will only truly happen with more regulation,” said the report. “Standards should be high for all, but scrutiny should be higher for those sectors that still have the furthest to go – especially energy-intensive private businesses with high and very-hard-to-abate emissions in loosely regulated jurisdictions,” it added.

South Pole noted that, unfortunately, many companies seem to be interpreting the rise in regulation around climate claims as an effective ban on communicating climate action.