The growing demand for sustainability reporting has also led to intentional misrepresentations. Greenwashing and Greenhushing are two types of misrepresentation in corporate sustainability reporting. Greenwashing happens when companies exaggerate or falsely present their environmental or social performance. Greenhushing is when companies deliberately withhold sustainability information to avoid drawing attention or facing accountability.
Both of these practices lower the reliability of reports and create uncertainty for stakeholders, including investors, regulators, and the public. In South Africa, where social and environmental risks are significant in many sectors, these behaviours weaken the quality of market disclosures and make it harder to assess corporate performance.
As South African companies adopt international sustainability disclosure standards like IFRS S1 and S2, the pressure for consistent, accurate, and verifiable reporting will grow. Selective disclosures, vague commitments, or unsupported claims will not meet the expected transparency or assurance readiness levels.
Companies need to set clear sustainability goals to prepare for mandatory disclosures and possible assurance. They should also have internal processes in place that support data collection, monitoring, and reporting. This includes assigning responsibilities, using consistent measurement criteria, and keeping documentation to back up their claims.
Companies that fail to prepare for scrutiny or assurance may face reputational risks or regulatory issues. Unverified claims could lead to non-compliance findings or raise doubts about broader governance practices.
Companies must report on sustainability issues important to their operations and strategy. Leaving out such information or presenting it in a way that cannot be backed up is unlikely to survive future review.
If not yet started, South African companies should urgently work on building their internal capacity to create complete, balanced, and evidence-based sustainability reports. This requires going beyond compliance language and ensuring that disclosures can be independently verified.
