In today's consumer landscape, the demand for sustainability credentials in products like ice-creams, clothing, and new homes is on the rise.

However, this surge in consumer consciousness is paralleled by a concerning trend: New Zealand businesses that aspire to demonstrate leadership in their sustainability initiatives and certifications appear to be struggling to walk the tightrope between greenwashing and greenhushing.

Greenwashing means overstating green credentials, while greenhushing means understating or remaining silent on green initiatives for fear of backlash.

The latest Kantar Better Futures Report 2024 shows businesses are seen to be under-performing on transparency of sustainability performance. Customers want them to use their voices more actively on environmental and social issues, while also improving their treatment of employees.

The report was based on a survey of 1,000 New Zealanders. Critically, it found perceived action by business is 28% below its perceived responsibility on environmental issues, and 20% below on social issues.

We need to consider why that perception gap is so large and why companies are not using their voices as prominently as customers want. What is the handbrake?

It would appear fear of greenwashing is having a chilling effect, striking fear into the hearts of CEOs, marketers, legal teams, and communications specialists – with good reason.

Regulators here and overseas are rightly cracking down on greenwashing.

Clampdowns on greenwashing in two major trading partner countries – Australia and the European Union – are putting pressure on New Zealand regulators and companies.

After finding 57 per cent of companies in Australia were not complying with their obligations to consumers, the Australian Competition and Consumer Commission (ACCC) has recently released explicit guidelines that must be met when making environmental and sustainability claims.

And the European Union has voted to ban terms such as “environmentally friendly”, “eco”, “biodegradable” and “climate neutral” without providing evidence.

In New Zealand, the Commerce Commission, which previously focused on education and warnings, is now expected to take a more aggressive stance. This shift coincides with organisations like Consumer NZ becoming more active, as evidenced by their targeting of a fuel retailer in a court case.

According to data obtained by Wright Communications from the Commerce Commission through the Official Information Act, local marketing behaviour is already responding to regulatory and consumer pressures. While the Commission received approximately 60 complaints per year about environmental claims at the beginning of the decade, this number has reduced to 37 on average in the last three years. Common grievances are associated with terms like "organic" and "recycling," with ongoing confusion surrounding "biodegradable" and "compostable." In the past year, there were also complaints regarding claims about "carbon emissions."

The Commission has doled out a couple of six figure fines to companies found guilty of misleading the public. 

However, there is concern that these crackdowns, coupled with the possibility of businesses becoming less forthcoming about their sustainability efforts (greenhushing), may lead to unintended consequences. Such outcomes could include less ambitious businesses feeling reduced pressure to prioritise sustainability or facing further erosion of consumer trust if no tangible actions are observed. 

How can large influential businesses join the conversation about sustainability and their efforts to do better when they are likely to be shot down for not doing enough?

Often, it’s easier to avoid this threat by greenhushing, remaining silent than risk backlash or being targeted.

“Without large companies talking about the progress they are making, without high profile conversations about change, the pressure is taken off those who are falling behind.”

There are many reasons to continue highlighting progress. The Kantar Better Futures report shows New Zealanders top five environmental concerns are:

1. Pollution of lakes, rivers and seas (up one)
2. Microplastics in the environment and food sources (up two)
3. Managing our waste, including recycling (new this year)
4. The impact of climate change (down three)
5. Protection and management of conservation land and waterways.

Staff and customers want to know about companies’ sustainability progress, and it can help grow market share. Communicating achievements and goals can also grow the sustainability community and inspire others to follow.

While it’s a delicate balancing act for companies wishing to avoid greenwashing or greenhushing there are ways to share how they’re getting it right.

We suggest the following:

1. Use plain language – avoid vague, catch-all phrases like “environmentally friendly”, “eco”, “biodegradable” and “climate neutral”
2. Have evidence ready
3. Balance the conversation – acknowledge there is more to do
4. Set achievable, verifiable targets and report on them
5. Look at certification with reputable, third-party organisations such as B Corp, Toitū Envirocare, Eco Choice Aotearoa, and Ākina Impact Supplier Certification.