The article in the url below suggests that, in the face of growing polarization around ESG-related issues, companies are engaging in more "green-hushing":
"Executives at U.S.-listed companies mentioned 'environmental, social and governance,' 'ESG,' 'diversity, equity and inclusion,' 'DEI' or 'sustainability' on 575 earnings calls from April 1 to June 5, down 31% from the same period last year. … That is the largest such year-over-year decline and the fifth consecutive quarter of year-over-year drops, following a pickup in these discussions and corporate social efforts in the wake of the police killing of George Floyd in May 2020."
The chart in the article highlights the definite trend that emerged over the last couple of years:
Although executives are talking less often about the variety of issues that fall under the ESG umbrella, there does not seem to be any less action (which is encouraging):
"While such instances of 'green-hushing' may be part of a larger strategy for many companies to avoid weighing in on divisive issues, there is little sign that public companies are pulling back from the initiatives themselves, such as DEI employee training and emissions reductions. Companies still regularly voluntarily issue detailed sustainability reports, disclose greenhouse-gas emissions and tie a portion of their executive compensation to ESG metrics. Businesses are also busy preparing soon-to-be-unveiled new climate-disclosure requirements from the Securities and Exchange Commission by creating systems for collecting data and managing future compliance costs."
This reminds me of Walmart, which has long engaged in best-practice sustainability issues in its supply chain, but does not advertise their progress to their customers. Research suggests that customers who see a "green" product assume that it is priced as a premium product, even though it could easily be cheaper. But, Walmart is most concerned about its price sensitive customers and perceptions around value (rather than actual value), so better for the firm to engage in the practice, but not tell anyone about it.
This is opposite to a strategic CSR approach to business. Much better, in my opinion, to stand behind a clear set of values and run the business accordingly. In my mind, that generates greater loyalty to the firm among all stakeholders, which is essential in order to operate the business at its optimal potential.
Take care
David
David Chandler
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Companies Seek to Avert Backlash, Avoid Talk of Social, Green Issues
By Mark Maurer
June 13, 2023
The Wall Street Journal
Late Edition – Final
A1-2
