Detecting Greenwashing in ESG Disclosure: An NLP-Based Analysis of Central and Eastern European Firms

Adriana AnaMaria Davidescu, Eduard Mihai Manta, Ioana Bîrlan (), Alexandra-Mădălina Miler and Sorin-Cristian Niță
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Adriana AnaMaria Davidescu: Department of Statistics and Econometrics, The Bucharest University of Economic Studies, 010552 Bucharest, Romania
Eduard Mihai Manta: Department of Statistics and Econometrics, The Bucharest University of Economic Studies, 010552 Bucharest, Romania
Ioana Bîrlan: Doctoral School of Economic Cybernetics and Statistics, The Bucharest University of Economic Studies, 010552 Bucharest, Romania
Alexandra-Mădălina Miler: Faculty of Cybernetics, Statistics and Economic Informatics, The Bucharest University of Economic Studies, 010552 Bucharest, Romania
Sorin-Cristian Niță: Department of UNESCO Chair for Business Administration, Faculty of Business Administration, The Bucharest University of Economic Studies, 010552 Bucharest, Romania

Sustainability, 2026, vol. 18, issue 3, 1-38

Abstract: The rapid expansion of corporate sustainability reporting has increased transparency requirements while raising concerns about greenwashing driven by selective, narrative-based disclosure. This study assesses the credibility of Environmental, Social, and Governance (ESG) communication by comparing corporate sustainability reports with external media coverage for a sample of 204 large firms operating in Central and Eastern Europe in 2023. Using natural language processing techniques, the analysis constructs a Greenwashing Severity Index (GSI) that captures discrepancies between firms’ ESG self-representation and external public narratives. The index combines ESG-specific focus measures, sentiment analysis, TF–IDF-based term weighting, and topic modeling to quantify imbalances in ESG communication. Results indicate moderate but widespread greenwashing across countries, industries, and firm sizes, with substantial heterogeneity linked to differences in regulatory maturity and stakeholder scrutiny. Higher alignment between corporate disclosures and external narratives is observed among larger firms and in sectors subject to stronger public accountability, while finance, aviation, and online commerce exhibit higher greenwashing severity. A propensity score matching analysis further shows that firms with imbalanced emphasis across ESG dimensions display significantly higher GSI values, consistent with strategic disclosure behavior rather than substantive sustainability engagement. Overall, the findings demonstrate that transparency alone is insufficient to ensure credible ESG communication, highlighting the need for EU sustainability governance to move beyond disclosure-based compliance toward digitalized, data-driven monitoring frameworks that systematically integrate external information sources to curb strategic ESG misrepresentation and enhance corporate accountability under evolving regulatory regimes.

Keywords: big data analytics; corporate transparency; digitalization; ESG disclosure; greenwashing; natural language processing; sustainability reporting (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2026
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