As this article states, “Corporations across the economy are at risk of losing financial value by either underplaying or overplaying their hand when it comes to sustainability.”
There is a cost attached to greenwashing (ie, overstating your sustainability achievements) and there is also a cost attached to not having a sustainability program or having one and greenhushing (ie, not promoting your validated sustainability achievements).
Both greenwashing and greenhushing are hurting company bottom lines.
If your sustainability claims are not validated/certified and you are promoting them, it negatively impacts your brand and value. On the other hand, if you do not have a sustainability program; or if you have a valid/certified sustainability program but are not talking about it; that also negatively impacts your brand and value.
As an example, per the study, if Microsoft did a better job of talking about its sustainability program, it could add approximately $1.5 billion to its overall company value.
Pepsi could add $500 million, or 3%, to its overall value, if it did a better job of promoting its sustainability program.
On the other hand, Tesla, which does not score well on social sustainability or governance, has $4 billion, or 6% of its value, at risk, due to over-promotion of programs that are not certified and are not as good as they claim….and the market sees it.
The key takeaways for your company:
- Like it or not, consumers are evaluating your company on its sustainability effort
- A meaningful part of your company’s value is tied to its sustainability effort
- Greenwashing (promoting a sustainability effort that is not validated/certified by a 3rd party) will hurt you
- Greenhushing (not promoting a sustainability program that is 3rd party validated/certified) will hurt you
- You need a 3rd party certified/validated sustainability program that helps you promote your real/accurate sustainability efforts
- This masterclass explains what to look for in a program