A Greenwashing Index

Elise Gourier and Mathurin, Hélène

No 18831, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We construct a news-implied index of greenwashing. Our index reveals that greenwashing has become particularly prominent in the past five years. Its increase was driven by skepticism towards the financial sector, specifically ESG funds, ESG ratings and green bonds. We show that greenwashing impacts investors' behavior. Unexpected increases in the greenwashing index are followed by decreases of flows into funds advertised as sustainable, both for retail and institutional investors. They furthermore bias the estimation of stocks' beta on climate risk, distorting the estimated climate risk premium. When accounting for greenwashing, the climate risk premium becomes small and statistically insignificant.

JEL-codes: G11 G12 Q51 (search for similar items in EconPapers)
Date: 2024-02
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP18831 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:18831

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP18831

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().