Large businesses in the UK and US are quiet about ESG progress

​Fears over potential greenwashing accusations have created caution among large UK and US businesses when publicising their sustainability progress, according to a new study.

The data reveals two-thirds (63 per cent) of businesses are under-promoting their sustainability/environmental progress, reported by the FTSE100, preferring detailed annual data disclosures over marketing claims for public knowledge. In the US this was higher, at 67 per cent.

The Transparency Index 2024 research was conducted by Connected Impact, in partnership with Ringer Sciences. The study, which shows 64 per cent of consumers choose responsible brands, analyzed more than 600,000 corporate communications.

It was carried out over the course of a year, creating the first ever assessment of Environmental, Social, and Governance (ESG) disclosures and communications of the top 200 companies in the UK and US.

As stakeholders demand more scrutiny surrounding sustainability and consumer awareness, businesses are ramping up transparency efforts by showcasing their goals and the targets they’ve met. However, this can result in a backlash when businesses face accusations of greenwashing (making misleading environmental claims) which can lead to ‘greenhushing’, where businesses choose not to communicate their sustainability efforts.

The downside of greenhushing is that broader environmental progress can be delayed, while transparent sharing of best practice and successful initiatives is vital to empower other organizations and spark collaboration for climate solutions.

Data in the report showed that just five per cent of environmental claims were seen as ‘over-promotion.”

A sharper focus on transparency among businesses is driven by regulatory frameworks such as the Green Claims Code in the UK which works to combat greenwashing and the proposed new EU law banning misleading green claims. Businesses should ensure they strike a balance between exercising caution and effective sustainability progress communication.

Transparent reporting should also be viewed as an opportunity to attract ESG-focused investors and customers.

Dr Lucy Walton, Connected Impact’s CEO, said: “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.

“Armed with this report, you can now see where your business meets the top 200 businesses in the UK and US. This is an opportunity to quantify – and close – the gap between company disclosures and communications so your stakeholders can make better business decisions. This is an opportunity to chart progress and move, together, resolutely, toward fairer markets and responsible business."