Two-thirds of FTSE 100 underplay ESG to avoid greenwashing

A major study of 200 companies has found many avoid promoting environment, social and governance progress as ‘greenhushing’ is on the rise. 

According to the Transparency Index 2024 report, published by data insights company Connected Impact and data science specialist Ringer Sciences, just 2% of companies are ‘over-promoting’ their efforts to reduce emissions and overall climate footprint. 

In comparison, 63% are underselling their work in these areas, which is defined as disclosing significantly more information on environmental initiatives and results than they promote and publicise. This is due to fear of greenwashing accusations, and a desire to avoid being scrutinised on green issues. 

The research took into account more than 600,000 corporate communications at 200 companies, and also found that firms that are transparent about ESG are increasingly gaining credibility among consumers. Investment opportunities are also on the rise, with 85% of investors now saying that the world’s $30 trillion of global ESG assets bring better returns, suggesting businesses that keep quiet about theirs could be missing out. 

Nevertheless, just 35% of the FTSE 100 presented a ‘balanced’ picture about their ESG efforts. Social initiatives aimed at improving diversity and inclusion saw the greatest level of disclosure and promotion, with 71% of companies engaged in this. Governance, which refers to more ethical issues, had the lowest, with 45% of firms publicising this. 

‘Businesses are under mounting pressure to avoid greenwashing – with increasing regulation and potential fines for those who misrepresent legitimate ESG efforts,’ Dr. Lucy Walton, CEO of Connected Impact. ‘But businesses must also take action to avoid ‘greenhushing’. Our data reveals that businesses are more likely to under-promote than over-promote their ESG initiatives. This cautious approach can deter investment and undermine credibility.

‘ESG Transparency is currently a missed opportunity for the top 200 businesses in the UK and US. We know most consumers favour responsible brands and transparent businesses,’ Dr Walton continued. ‘We know a well-governed transparent business attracts more investment and top talent[3]. This report equips businesses to identify – and close – transparency gaps so we can all make better decisions about where to invest our money, time and attention.’

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Image: Stephen Dawson