Purpose-led marketing can be seen as a liability in today’s political climate. But the companies focusing on sustainability may have a different story to tell when it comes to the impact on the bottom line.
New research reveals that businesses taking meaningful action on environmental sustainability are outcompeting their peers in terms of financial performance by up to 6%, and that perceptions of environmental action account for a significant share of the reputational advantage held by market leaders. 

The global study, “The Cost of Silence,” found that companies with an environmental focus grew EBITDA 6% better than companies that did not. But it also found there is a cost to saying or doing nothing, as more than 75% of companies risk undermining trust by either greenwashing (overstating efforts) or greenhushing (saying nothing).

The study was commissioned by Revolt, a strategic consultancy specializing in positive impact, and part of Anthesis Group. It analyzed more than 500 publicly listed companies across 16 industries, using three years of global data. No private organizations were included in the analysis.

By combining environmental performance indicators, financial data and AI-driven reputation analysis, the study highlights two key findings showing that sustainability and business performance are fundamentally linked. To measure the “Cost of Silence,” the agency partnered with Maha Global, an AI SaaS company with a reputation intelligence platform, Darwin, that unifies multi-stakeholder sentiment, corporate behavior as well as competitive and financial analytics.

The sensitive sociopolitical climate has resulted in a backlash against DEI efforts as well as sustainability movements. The ripple effect has caused many companies to either scale back their efforts or quietly remove references on external-facing materials, also known as the greenhushing effect. 

“You can talk about the most polarizing topics out there, but if you use the right language, you will find that we actually agree more than we disagree,” says Kirsten Flanik, CEO, North America at Revolt. Flanik is helping to build the London-based, purpose-led consultancy in the U.S. She was formerly president and CEO at BBDO New York.

Revolt’s research also found that those focused on sustainability efforts didn’t just have an increase in EBITDA, but also had a 31% reputational advantage over the companies that did not. It also shows that certain environmental issues consistently shape how leading brands are perceived, no matter the sector. The biggest drivers of reputation accounting for the gap between leading businesses and the average are:

– Renewable energy use (6.6%)
– Responsible resource use (5.9%)
– Water use (4.9%)

The issues that matter most from a business performance perspective vary by industry. In retail, the top issue is cutting carbon emissions, while in automotive, it’s reducing the environmental impact of products.

The findings from “The Cost of Silence” also highlight a significant risk for businesses that fail to communicate their environmental efforts. Financial performance peaks when a company’s actions and communications are aligned. However, less than a quarter (21%) of companies communicate authentically when it comes to their environmental performance, with over three quarters (79%) risking undermining trust by either greenwashing or greenhushing.

Flanik says getting the right balance in the current cultural environment can be tricky, but that’s partly what the study helps companies understand. It’s a matter of perception versus reality.

“Where brands have gotten in trouble is when they have become either irresponsible about it or immature or tried to run to the space that they think is the right space to be in, because it feels like a moment in time,” says Flanik.

The study states three ways to combat silence: Get strategic, get granular and get creative. Strategy involves knowing where your company sits in relation to your peers and learning from those who have leveraged sustainability correctly. Granularity refers to finding the key drivers of the brand’s reputation and what areas of sustainability can boost your score. Creativity is building a communications plan with originality and delivering it in a way to get heard.