Uncovering corporate greenwashing: a predictive model based on Chinese heavy-pollution industries

Qiang Li, Zichun He and Huaxia Li

Sustainability Accounting, Management and Policy Journal, 2024, vol. 16, issue 1, 137-167

Abstract: Purpose - As the global emphasis on environmental consciousness intensifies, many corporations claim to be environmentally responsible. However, some merely partake in “greenwashing” – a facade of eco-responsibility. Such deceptive behavior is especially prevalent in Chinese heavy-pollution industries. To counter these deceptive practices, this study aims to use machine learning (ML) techniques to develop predictive models against corporate greenwashing, thus facilitating the sustainable development of corporations. Design/methodology/approach - This study develops effective predictive models for greenwashing by integrating multifaceted data sets, which include corporate external, organizational and managerial characteristics, and using a range of ML algorithms, namely, linear regression, random forest, K-nearest neighbors, support vector machines and artificial neural network. Findings - The proposed predictive models register an improvement of over 20% in prediction accuracy compared to the benchmark value, furnishing stakeholders with a robust tool to challenge corporate greenwashing behaviors. Further analysis of feature importance, industry-specific predictions and real-world validation enhances the model’s interpretability and its practical applications across different domains. Practical implications - This research introduces an innovative ML-based model designed to predict greenwashing activities within Chinese heavy-pollution sectors. It holds potential for application in other emerging economies, serving as a practical tool for both academics and practitioners. Social implications - The findings offer insights for crafting informed, data-driven policies to curb greenwashing and promote corporate responsibility, transparency and sustainable development. Originality/value - While prior research mainly concentrated on the factors influencing greenwashing behavior, this study takes a proactive approach. It aims to forecast the extent of corporate greenwashing by using a range of multi-dimensional variables, thus providing enhanced value to stakeholders. To the best of the authors’ knowledge, this is the first study introducing ML-based models designed to predict a company’s level of greenwashing.

Keywords: Greenwashing; Machine learning; Corporate social responsibility (CSR); Predictive model; Environmental; social and governance (ESG) (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:sampjp:sampj-11-2023-0813

DOI: 10.1108/SAMPJ-11-2023-0813

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