Employees' response to corporate greenwashing

Abstract

Research on corporate greenwashing has expanded rapidly in recent years. At the same time, emerging studies in related literatures have found that employees are seeking out firms that are social and environmental leaders, and employee activism within firms is growing. However, the effect of firms' exaggeration and misrepresentation of environmental claims, or greenwashing, on their own employees has been overlooked. Accordingly, we investigate greenwashing from an organizational psychology lens, exploring the impact it can have on employees, and whether these effects differ for different types of employees. Using data collected at three separate time points from a sample of employees educated in environmental science/sustainability, our results show that greenwashing was positively related to perceptions of corporate hypocrisy, which in turn, resulted in higher turnover intentions. We also found that these relationships were moderated by employees' level of environmental education. By uncovering the deleterious effects greenwashing can have for employees, and by extension for their employers, these findings generate insights into the extent to which corporate environmental communications can backfire.

Determinants and consequences of corporate social responsibility decoupling—Status quo and limitations of recent empirical quantitative research

“…Regarding CSR performance, few studies stressed that CSR decoupling increases firm's actual employee turnover (Scheidler et al, 2019), turnover intentions (Robertson, 2023)…”

“…Regarding financial consequences, included studies recognized ROA as accounting‐based performance (Walker & Wan, 2012), interest rates and collateral loans (Cao et al, 2022), stock price crash risk (Liu et al, 2023), Tobin's Q (Chen & Dagestani, 2023;Hawn & Ioannou, 2016; Liu et al, 2023), cumulative abnormal returns (Du, 2015), economic performance score (Schons & Steinmeier, 2006), analyst forecast errors, cost of capital, and access to finance (Garcia‐Sanchez et al, 2021). Relying on CSR performance , CSR donations during the COVID‐19 crisis (Zhong et al, 2022), customer satisfaction (Ioannou et al, 2022), green trust (Chen & Chang, 2013) and firms' actual employee turnover and intentions (Robertson et al, 2023; Scheidler et al, 2019) were recognized. Moreover, as other firm variables, earnings management was included in one study (Garcia‐Sanchez et al, 2020).…”

Fenntarthatósági átmenet: kihívások és innovatív megoldások : Nemzetközi tudományos konferencia a Magyar Tudomány Ünnepe alkalmából

“…The employee factor can also be dangerous for the company, as employees communicate their perceptions to the outside world and can be perceived as credible sources by other interest groups due to their direct connection to the company. It was also found that employees with a higher level of education in the area of the environment are more willing to leave the company in the event of greenwashing (Robertson et al, 2023).…”

Research on the impact of ESG performance on carbon emissions from the perspective of green credit

“…Additionally, there might be a positive moderating influence of green credit between ESG performance and CE. The phenomenon of "green washing" refers to companies exaggerating their ESG levels through various means to mislead investors and gain more profits 45 . This phenomenon is becoming increasingly prevalent in ESG reports and is a significant issue that cannot be ignored.…”