Exaggerating, distracting, or window-dressing? An empirical study on firm greenwashing recognition

Xueying Yuan, Jinhua Xu and Lixia Shang

Finance Research Letters, 2024, vol. 67, issue PB

Abstract: This paper uses both quantitative and qualitative methods to identify and categorize three distinct greenwashing practices: exaggerating, distracting, and window-dressing. It investigates the investor reaction and third-party ESG/CSR ratings associated with each type, thereby ascertaining their ability to recognize potential greenwashing activities. The results show that exaggerating strategy, which is mostly discussed, is not so common among Chinese listed firms. Additionally, greenwashing firms exhibit significantly higher market returns through signal effects, while receiving lower rating evaluations. These findings shed light on the ability of investors to recognize distinct greenwashing tactics and highlight the comparable rational evaluation of ESG/CSR rating platforms.

Keywords: Greenwashing strategy; Environmental disclosure; Environmental performance; Signal effect (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612324008754
Full text for ScienceDirect subscribers only

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:eee:finlet:v:67:y:2024:i:pb:s1544612324008754

DOI: 10.1016/j.frl.2024.105845

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().