Sustainability governance and greenwashing: the role of sustainability committees in ASEAN-5 countries

Yani Permatasari, Meifaza Ainur Rosyidah, La Ode Sabaruddin, Sandra Sukma Embuningtiyas and Rizqy Aiddha Yuniawati

Asian Review of Accounting, 2025, vol. 34, issue 3, 575-600

Abstract: PurposeThis study examines the role of sustainability committees in mitigating greenwashing among publicly listed firms in ASEAN-5 countries. As firms increasingly face scrutiny over misleading ESG disclosures, this research investigates whether sustainability committees are an effective governance mechanism to enhance transparency and accountability.Design/methodology/approachThis study applies a fixed-effects panel regression model to an unbalanced panel dataset of 1,256 firm-year observations from 2018 to 2022. Robustness checks, including Coarsened Exact Matching (CEM), Propensity Score Matching (PSM) and Two-Stage Least Squares (2SLS), address potential selection bias and endogeneity concerns. Additional COVID-19 period regression, dynamic and country-specific analyses further explore variations in governance effectiveness.FindingsThe results show that sustainability committees significantly reduce greenwashing. Their impact is more substantial in small and mature firms but weaker in large and young firms. Cross-country analysis highlights the role of regulatory environments and stakeholder pressures in shaping sustainability governance effectiveness.Research limitations/implicationsThis study is limited to ASEAN-5 firms, making broader generalization arguable. Reliance on Bloomberg ESG data may also not capture all sustainability aspects. Future research should explore alternative ESG metrics, qualitative methods and interactions between sustainability committees and governance mechanisms such as board diversity and executive compensation for deeper insights.Originality/valueThis study contributes to corporate governance and ESG literature by providing empirical evidence on sustainability committees' role in reducing greenwashing. Unlike prior research focusing on external regulations, this study emphasizes internal governance mechanisms that enhance ESG reporting credibility.

Keywords: Corporate Sustainability; Governance; Sustainability Committee; Greenwashing (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:arapps:ara-03-2025-0067

DOI: 10.1108/ARA-03-2025-0067

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