Abstract
Motivated by the importance of credible sustainability disclosure and concerns about reputational risk, this study investigates greenhushing—the deliberate under-communication of strong corporate sustainability performance. As stakeholders increasingly demand transparent and reliable ESG disclosures, firms face a strategic dilemma: how to communicate progress without triggering skepticism, regulatory scrutiny, or accusations of greenwashing. We develop a theoretical framework that extends voluntary disclosure theory by integrating reputational threat, explaining why highly active firms may greenhush. Using a panel dataset of 1,512 global companies from 2003 to 2022, we analyze the relationship between internal and external sustainability actions and find an inverted U-shaped pattern. Companies initially increase sustainability disclosure as internal efforts rise, but those with the most intensive sustainability activities reduce reporting—consistent with greenhushing. Moreover, high-reputation firms face heightened scrutiny, leading to greater perceived risks and lower thresholds for greenhushing. These insights reveal that regulatory pressure and fear of misinterpretation can distort corporate transparency.