Do Board Characteristics Matter with Greenwashing? An Investigation in the Financial Sector with the Integration of Entropy Weight and TOPSIS Multicriteria Decision-Making Methods

Eleni Poiriazi, Georgia Zournatzidou () and George Konteos
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Eleni Poiriazi: Department of Business Administration, University of Western Macedonia, 51 100 Grevena, Greece
Georgia Zournatzidou: Department of Business Administration, University of Western Macedonia, 51 100 Grevena, Greece
George Konteos: Department of Business Administration, University of Western Macedonia, 51 100 Grevena, Greece

Risks, 2025, vol. 13, issue 4, 1-41

Abstract: Financial industry executives are sincerely concerned about the potential effects of greenwashing on their organizations. The primary objective of this research is to investigate the impact of board features on greenwashing and the strategies that executives may develop to mitigate the effects of corporate washing phenomena. A novel set of criteria was evaluated for 359 listed European financial institutions. Data were acquired from the Refinitiv Eikon database for the Fiscal Year 2024. The entropy weight and TOPSIS multicriteria decision-making methodologies were used to assess the data. These assist us in determining the relative importance of each chosen criteria about the board’s attributes and their impact on greenwashing. The study indicates that governance is the primary factor affecting greenwashing. Furthermore, findings indicate that the board of directors significantly influences the increased prevalence of greenwashing among financial firms. This suggests that the relationship between board size and greenwashing is debatable. The problem of greenwashing has primarily elevated the standards for evaluating board effectiveness and conflicts of interest, which are listed third on the list. The study results may inform the establishment of a new research agenda in the examined area.

Keywords: greenwashing; ESG; financial sector; governance; TOPSIS; board characteristics (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2025
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