Goodbye Greenhushing, Hello ‘Green-Proofing’: EY Q&A

In the wake of shifting ESG perceptions and tightening regulations, the financial services industry is redefining its sustainability narrative.

Gill Lofts, EY's Global Financial Services Sustainable Finance Leader, explores how institutions are moving beyond greenwashing and greenhushing toward a new phase of ‘greenproofing’ – embedding sustainability into governance, strategy and risk management to build long-term resilience.

Is ‘greenwashing’ still a prevalent issue in the financial services industry?

While ‘greenwashing’ remains a concern within financial institutions, it’s one that many firms are now more actively managing.

Over the past few years, interest in the term itself has declined – internet searches for greenwashing peaked in late 2021 but have since fallen to about a quarter of that level.

This likely reflects greater familiarity with the concept, as well as the impact of stricter regulations, global sustainability targets, and new transparency requirements make it harder for companies to exaggerate or misrepresent their environmental progress.

Some argue that companies have shifted from ‘greenwashing’ to ‘greenhushing’ – deliberately under-communicating their sustainability initiatives to avoid criticism or controversy. What factors are driving this change? 

As scrutiny from shareholders, regulators, and the public has intensified, financial services firms have become more cautious about how they communicate their sustainability efforts, tightening both internal and external processes.

Combined with the growing political backlash against ESG and non-financial agendas conflicting with fiduciary duty in some countries, this has created a sense that, while little may have changed in practice, companies are increasingly speaking less about – or even deliberately avoid discussion of – their progress on issues such as decarbonisation.

Is the financial services sector reversing its sustainability efforts?

Not exactly. While public messaging might have quieted down, behind the scenes, financial institutions are continuing their sustainability focus – especially at the board level.

According to the latest EY European Financial Services Boardroom Monitor, financial firms are, in fact, appointing board members with sustainability expertise at the fastest rate in three years.

The research found that 33% of board appointments in the year to June 2025 brought some form of sustainability experience, up from 23% the previous year. Now, 93% of boards across European banks, insurers, and asset managers include at least one director with sustainability expertise – up from 82% in June 2024.

What’s driving this focus on sustainability expertise at the board level?

Financial firms are increasingly recognising that environmental and social factors are not abstract ideals – they are tangible business risks and opportunities.

Sustainability considerations are becoming integrated into risk management, investment decisions, and long-term strategy.

In other words, firms may be talking less about sustainability, but they’re acting on it more decisively.

So, if companies aren’t shouting about their sustainability efforts or keeping quiet about them, what are they doing?

I think we’re now reaching this new middle ground, after seeing two extremes: greenwashing (overstating progress) and greenhushing (understating it). ‘Greenproofing’, as I like to coin it, represents this new middle ground. It’s not about managing perceptions – it’s about embedding sustainability into the core of business decision-making.

Companies are ‘proofing’ their assets, investments, and valuations against sustainability risks and opportunities to ensure long-term resilience. ‘Greenproofing’ isn’t about optics or messaging, it’s about material impact. It reflects a maturing mindset where sustainability is treated as a fundamental business consideration rather than a communications exercise.

Boards are factoring sustainability into what truly matters – how it affects valuation, stability, and growth.

Why are we seeing this shift now?

New regulations and reporting standards are starting to trickle through into day-to-day business practices. This is pushing financial institutions to integrate sustainability into compliance and risk frameworks.

These changes make sustainability a structural, not optional, part of doing business. When I was at UN Climate Week, Simon Stiell, Executive Secretary of the UN Framework Convention on Climate Change, highlighted how ESG processes are moving closer to the “real economy.” This reinforces the idea that sustainability is no longer a side narrative – it’s becoming central to how businesses operate.

What key takeaway would you give to financial services firms still unsure how to proceed with their ESG objectives?

I’d say that this era of ‘greenproofing’ marks a more pragmatic, grounded approach to sustainability.

After years of pendulum swings between overpromising and underreporting, businesses are finding a more credible footing.

For financial institutions, it’s now less about whether to talk or stay quiet – and more about just getting on with it.