When green turns red: Is the perception of greenwashing a barrier to individual green investment?

Syrine Gacem, Fabrice Hervé and Sylvain Marsat

Finance Research Letters, 2025, vol. 82, issue C

Abstract: Based on a survey of 2215 French investors, this study examines the impact of greenwashing perception on individual investment decisions. Our findings reveal that greenwashing perception is negatively related to green investing. Specifically, A one-point increase in greenwashing reduces investment likelihood by 1.68 percentage points. This perception discourages traditional investors from considering green funds and dissuades existing green investors from increasing their green investments. Moreover, consistent with negativity bias, low perceptions of greenwashing have no positive effect on green investments, while high perceptions negatively affect them by triggering negative emotions that heighten risk perception and deter green investment.

Keywords: Greenwashing; Green investing; Individual investors; Investment-decision making; Negativity bias (search for similar items in EconPapers)
JEL-codes: D14 E21 G11 Q51 Q56 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:82:y:2025:i:c:s1544612325008645

DOI: 10.1016/j.frl.2025.107605

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