Journal of Cleaner Production · 2022 · 178 citations · 50 references
BusinessCorporate GovernanceEnvironmental ManagementCorporate DisclosureCorporate ReportingInstitutional TheoryCarbon DisclosureCorporate Social Responsibility ReportingCorporate SustainabilityCorporate Sustainability DisclosureEnvironmental ReportingSustainability ReportingCarbon Disclosure ReportingCarbon Information DisclosureCarbon Performance DisclosureCarbon Performance ReportingCorporate Carbon DisclosureCorporate Carbon ReportingVoluntary Climate DisclosureVoluntary Environmental Disclosure
Voluntary corporate environmental disclosure has risen sharply in the past decade, yet its veracity is increasingly questioned and prior research has largely ignored the role of carbon performance in assessing disclosure truthfulness. The study investigates how climate‑related regulatory pressures influence firms’ propensity to greenwash, applying institutional theory and being the first to incorporate international climate regulations into this analysis. Using an international sample of firms from 12 countries, the authors develop a method that identifies greenwashing firms by comparing their carbon performance with their disclosure. Results indicate that a higher number of climate‑related regulations reduces firms’ likelihood of greenwashing, with stricter regulatory environments further lowering greenwashing participation.
Voluntary corporate environmental disclosure has increased significantly in the last decade. However, the increase in environmental disclosure has also been accompanied by the social questioning of its veracity. Previous studies have mainly focused on the determinant factors behind corporate decisions to disclose environmental data, with only limited consideration of both carbon performance and the veracity of the information disclosed. Based on an international sample of firms from 12 countries, this paper analyzes the impact of regulative pressures related to climate change on the likelihood of companies engaging in greenwashing. The results show that the number of regulations related to climate change negatively influences the propensity of firms to engage in greenwashing. Furthermore, firms in countries with stringent climate-related regulations are less likely to participate in greenwashing practices. This paper adds to the existing literature concerning greenwashing by demonstrating that institutional theory can deliver further insights into the explanation of corporate greenwashing behavior. This is the first study to incorporate international climate-related regulations into the analysis of corporate greenwashing. It also provides a new method for identifying greenwashing firms, based on their carbon performance and disclosure.
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