“How do we communicate our sustainability progress without being accused of overclaiming, or criticised for saying too little?”
It’s a tension many senior leaders grapple with. Sustainability reporting is no longer optional. Investors, regulators, employees and customers expect it, and they scrutinise it closely. Yet the fear of missteps can leave organisations frozen between two extremes.
On one side lies greenwashing – overstating achievements or using vague, feel-good language. Here the regulatory and reputational stakes are high. The UK’s Competition and Markets Authority (CMA) has enforceable guidance around environmental claims, and Europe’s upcoming Corporate Sustainability Reporting Directive (CSRD) will mandate legally binding standards.
In contrast, ‘greenhushing’, the urge to underplay or hide progress due to fear of scrutiny, has become prominent. A South Pole survey found that a majority of companies intentionally adopt this approach, silencing the gains they’ve actually made. But silence can be just as harmful as it leaves stakeholders guessing, disengages employees, and lets momentum fade.
Finding the sweet spot means being both honest and strategic. Authenticity isn’t about perfection; it’s about transparency.
Striking the right balance
The most credible impact reports are rooted in consistent, measurable data, whether that’s emissions, waste diversion or supply chain improvements. Investors seek metrics they can trust year after year, so frameworks like Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), and CSRD are invaluable. GRI works across wide stakeholder groups, SASB ties sustainability to financial performance, and CSRD is quickly setting the European standard.
Yet credibility hinges on more than just numbers. Reporting should candidly include both success and setbacks. If you have missed a target, explain why and how you’re responding. Stakeholders value honesty and the action plan that follows. Buzzwords like “eco‑friendly” or “green” without context can raise red flags, while a precise statement like “Scope 2 emissions fell by 18% in 2024” speaks volumes.
Independent assurance or benchmarking adds trust, especially for investors who need confidence in what they back. And to resonate with humans – not just spreadsheets – it’s important to anchor data in narrative: share the communities, employees or partners behind your sustainability story. This approach transforms reporting from defensive compliance into a powerful platform for trust.
Lessons from the market
The dangers of miscommunication are real. For example, H&M has faced significant backlash and regulatory scrutiny over misleading sustainability claims – notably, via “environmental scorecards” that overstated the eco-friendliness of garments, leading to investigations and legal challenges. These incidents linger in headlines and erode long-term trust faster than you’d expect.
On the other hand, brands like Vivobarefoot are building credibility with unapologetic honesty. Their “Unfinished Business” reports do more than showcase wins – they reveal where targets slipped, strategies were adjusted, and lessons were learned. This radical transparency doesn’t weaken their reputation; it reinforces it. For stakeholders, authenticity signals true commitment to sustainability.
Common boardroom questions
What if our results look worse than last year?
Report them. Investors expect fluctuations and value transparency and a clear recovery plan over blank statements.
Do we need a full report every year?
Yes. Annual reporting builds credibility. That said, interim updates via blogs, infographics, or short videos help maintain momentum and engagement throughout the year.
Is silence safer than overstating?
No. Silence sows doubt and cedes the narrative. A thoughtful, balanced story sets your own terms.
Why It matters
According to PwC’s 2023 Global Investor Survey, 87% of investors want companies to disclose their impact on the environment and society, and 75% say ESG factors influence investment decisions.Transparent impact reporting strengthens access to capital, enhances regulatory alignment, engages employees, and can differentiate your brand in a crowded market.
Boardroom takeaway
Before finalising your impact communications, ask:
- Is every claim supported by objective, measurable data?
- Does the narrative acknowledge both progress and pitfalls?
- Could I confidently defend this report in front of an investor, regulator or journalist?
If the answer is yes, you’re positioning your organisation for trust and resilience.
Conclusion
Effective impact reporting isn’t about painting a flawless picture. It’s about telling an honest story that’s supported by data, enriched by context and humanised by narrative. That’s how you avoid the extremes of greenwashing or greenhushing and build trust across every critical stakeholder group.
At Magenta, we’ve helped organisations transform sustainability reporting into a strategic driver – credible, clear and compelling. Find out more with our free guide on creating a powerful impact report. If you’d like to explore what your next report could become, email me on greg@magentaassociates.co.
