In the three years since environmental, social, and governance (ESG) issues have occupied the center space in the attention of the business world, people have come to talk about greenwashing.
It means that a company is pretending to care—and act on—these issues when it is doing little or nothing.
Then there’s “greenhushing.”
It’s the opposite of greenwashing. A company is trying to conceal the extent of its ESG efforts, according to an article on the website of the Wharton School of Business.
Why would anybody want to do this?
Maybe because their business is in Texas, which has passed legislation ostensibly protecting the state’s oil and gas and firearms industries “by prohibiting local jurisdictions from contracting with banks that have adopted environmental, social, and corporate governance policies against those industries. That means cities can no longer use those banks as underwriters for municipal bonds, which are one of the main ways that cities raise money.”
https://knowledge.wharton.upenn.edu/article/texas-fought-against-esg-heres-what-it-cost/
This wasn’t such a great idea in light of the fact that five of the largest underwriters then left the Texas market: JPMorgan Chase, Goldman Sachs, Citigroup, Bank of America, and Fidelity.
Even business owners outside the Alamo State may feel pressured to conceal their ESG efforts as a result of stockholder pressure.
Some stockholders may object that the company isn’t doing enough to promote ESG activities.
Others, who may still be holding on to the view that a company’s sole purpose is to increase shareholder value, may think that a company taking action on ESG isn’t doing enough for the bottom line.
“We can see how firms are maybe caught in the trap between appearing not green enough or too green at the same time. It’s just a matter of who you want to make angry a little bit,” says Wharton accounting professor Mirko Heinle.
Heinle was possibly stating an inconvenient truth in adding, “It’s hard when you need to make a trade-off between financial performance and, for example, greenhouse gas emissions. I can see how it’s hard to tell the world what exactly you’re doing, to know that you cannot satisfy both sides. You cannot maximize cash flows and at the same time minimize greenhouse gas emissions in a short time frame.”
In Heinle’s view, both greenwashing and greenhushing will continue for the foreseeable future.
As for the produce industry, it would appear to have fewer motives for greenhushing than many others.
In the first place, the industry is offering a product that is often literally green. It would stand in its interest to emphasize that it is doing everything possible to be seen as enhancing environmental purity.
Furthermore, the fruit and vegetable industry is not exactly the darling of those who are concerned about workers’ issues. It has been assailed for its labor practices at least since the days of Steinbeck’s Grapes of Wrath, published in 1939.
It would thus be very much in the industry’s interest to promote any efforts it is making toward improved conditions for its workers.
We then turn to the crux of today’s governance issue: climate change. Here the industry can in many cases present itself as a hero, since its chief product—plants—absorb carbon. This is especially true for tree crops.
Indeed, as I suggested in a previous column, growers would be foolish not to explore carbon credits as a possible source of revenue for their business.
Maybe a given company is or is not doing enough to promote ESG issues: anyway, there is no clear consensus on what “enough” might even be. But it is certainly in the industry’s interest to bring any and all of its efforts in this regard to the center of public attention.
In the three years since environmental, social, and governance (ESG) issues have occupied the center space in the attention of the business world, people have come to talk about greenwashing.
It means that a company is pretending to care—and act on—these issues when it is doing little or nothing.
Then there’s “greenhushing.”
It’s the opposite of greenwashing. A company is trying to conceal the extent of its ESG efforts, according to an article on the website of the Wharton School of Business.
Why would anybody want to do this?
Maybe because their business is in Texas, which has passed legislation ostensibly protecting the state’s oil and gas and firearms industries “by prohibiting local jurisdictions from contracting with banks that have adopted environmental, social, and corporate governance policies against those industries. That means cities can no longer use those banks as underwriters for municipal bonds, which are one of the main ways that cities raise money.”
https://knowledge.wharton.upenn.edu/article/texas-fought-against-esg-heres-what-it-cost/
This wasn’t such a great idea in light of the fact that five of the largest underwriters then left the Texas market: JPMorgan Chase, Goldman Sachs, Citigroup, Bank of America, and Fidelity.
Even business owners outside the Alamo State may feel pressured to conceal their ESG efforts as a result of stockholder pressure.
Some stockholders may object that the company isn’t doing enough to promote ESG activities.
Others, who may still be holding on to the view that a company’s sole purpose is to increase shareholder value, may think that a company taking action on ESG isn’t doing enough for the bottom line.
“We can see how firms are maybe caught in the trap between appearing not green enough or too green at the same time. It’s just a matter of who you want to make angry a little bit,” says Wharton accounting professor Mirko Heinle.
Heinle was possibly stating an inconvenient truth in adding, “It’s hard when you need to make a trade-off between financial performance and, for example, greenhouse gas emissions. I can see how it’s hard to tell the world what exactly you’re doing, to know that you cannot satisfy both sides. You cannot maximize cash flows and at the same time minimize greenhouse gas emissions in a short time frame.”
In Heinle’s view, both greenwashing and greenhushing will continue for the foreseeable future.
As for the produce industry, it would appear to have fewer motives for greenhushing than many others.
In the first place, the industry is offering a product that is often literally green. It would stand in its interest to emphasize that it is doing everything possible to be seen as enhancing environmental purity.
Furthermore, the fruit and vegetable industry is not exactly the darling of those who are concerned about workers’ issues. It has been assailed for its labor practices at least since the days of Steinbeck’s Grapes of Wrath, published in 1939.
It would thus be very much in the industry’s interest to promote any efforts it is making toward improved conditions for its workers.
We then turn to the crux of today’s governance issue: climate change. Here the industry can in many cases present itself as a hero, since its chief product—plants—absorb carbon. This is especially true for tree crops.
Indeed, as I suggested in a previous column, growers would be foolish not to explore carbon credits as a possible source of revenue for their business.
Maybe a given company is or is not doing enough to promote ESG issues: anyway, there is no clear consensus on what “enough” might even be. But it is certainly in the industry’s interest to bring any and all of its efforts in this regard to the center of public attention.
Richard Smoley, contributing editor for Blue Book Services, Inc., has more than 40 years of experience in magazine writing and editing, and is the former managing editor of California Farmer magazine. A graduate of Harvard and Oxford universities, he has published 12 books.
