Greenwashing Behaviours: Causes, Taxonomy and Consequences Based on a Systematic Literature Review

Abstract

This study used the systematic review methodology to examine peer-reviewed journal articles published in the Web of Science, ScienceDirect, Springer and Emerald Insight during the 2000–2020 period to analyse greenwashing. In an open market, the behaviours of state-owned enterprises (SOEs), private firms and multinational corporations (MNCs) pose an implicit greenwashing threat. Our focal point is to analyse corporate greenwashing in MNCs in host emerging markets, particularly in Asia, for two reasons. First, reports of greenwashing have increased around the world since Volkswagen was revealed to have falsified automobile emissions data. Second, MNCs play an important role in expanding market size and their behaviour is increasingly unpredictable. The analysis shows that MNCs tend to engage in greenwashing immediately after doing business in host emerging markets characterised by restricted regulations, clear market opportunities and low competitive pressure. When greenwashing occurs, it will harm the interests of not only consumers, but also society as a whole, despite offering significant benefits to existing stakeholders. In this case, the authorities should implement regulations to confront MNCs before attracting them, which should be enforced in practice.

Relationship between the Degree of Internationalization and Greenwashing of Environmental Responsibilities in China-Based on the Legitimacy Perspective

“…The contributions of this paper are reflected in the following aspects: First, in previous studies, environmental responsibility is seldom carried out from the perspective of greenwashing under the background of internationalization of Chinese listed companies, which is a useful supplement to existing research [30,63,64] Second, diving factors of greenwashing from host countries are usually considered, such as institutional distance, which is used for researching the internationalization issues of an emerging market [1]. Compared with the above research, the driving factors of legitimacy pressures of a home country, including environmental regulation, public pressure, and industry pressure, are included in the scope of our research, and the theoretical mechanism is constructed.…”

“…As a specific external institutional pressure, industry competition strengthens firms' motivation to seek strategic deviation, alleviate external uncertainty, and demand for legitimacy [28][29][30]. Industry competition means that enterprises need to adapt to higher self-regulation and industry norms.…”

Relationship analysis between greenwashing and environmental performance

“…According to the legitimacy theory, enterprises choose to disclose corporate environmental information in order to obtain legitimacy, and environmental information disclosure is a function of social and political pressure faced by enterprises. For enterprises with poor environmental performance, their legitimacy is more threatened by society than those with good performance, so they need to disclose more environmental information to relieve pressure from stakeholders (Yang et al, 2020). When taking Australian enterprises as research objects, Clarkson et al (2014) found that polluting enterprises do face greater social pressure and disclose more symbolic environmental information.…”

Carbon information disclosure quality, greenwashing behavior, and enterprise value

“…If the environmental, social, and governance information disclosed by enterprises is unreliable, the greenwashing behavior of enterprises may become an obstacle to incorporating environmental, social, and governance factors into investment decisions ( Yu et al, 2020 ). Over time, greenwashing damages investor confidence and provokes negative market feedback ( Yang et al, 2020 ). At the same time, it inhibits investors’ optimism, and the positive promotion effect of carbon information disclosure on enterprise value fades with it.…”