2011
DOI: 10.1111/j.1530-9134.2010.00282.x
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Greenwash: Corporate Environmental Disclosure under Threat of Audit

Abstract: We present an economic model of greenwash, in which a firm strategically discloses environmental information and a non-governmental organization (NGO) may audit and penalize the firm for failing to fully disclose its environmental impacts. We show that disclosures increase when the likelihood of good environmental performance is lower. Firms with intermediate levels of environmental performance are more likely to engage in greenwash. Under certain conditions, NGO punishment of greenwash induces the firm to bec… Show more

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Cited by 884 publications
(417 citation statements)
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References 19 publications
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“…Companies could be forced to donate money through regulations (e.g., the Companies Act, 2013 in India requires targeted companies to spend 2 % of their net profits on CSR activities; see Jain and Com 2014). Such activities are sometimes referred to as greenwashing (Lyon and Maxwell 2011), in which a company discloses positive information on its environmental or social performance without actually valuing CSR.…”
Section: Behavior-based Social Responsibilitymentioning
confidence: 99%
“…Companies could be forced to donate money through regulations (e.g., the Companies Act, 2013 in India requires targeted companies to spend 2 % of their net profits on CSR activities; see Jain and Com 2014). Such activities are sometimes referred to as greenwashing (Lyon and Maxwell 2011), in which a company discloses positive information on its environmental or social performance without actually valuing CSR.…”
Section: Behavior-based Social Responsibilitymentioning
confidence: 99%
“…Such support demonstrates the social aspects of utilizing a sustainable management framework (Starik & Kanashiro, 2013). Researchers (Lyon & Maxwell, 2011;Wicki & van der Kaaij, 2007) have noted that managers have become increasingly reticent to communicate ER efforts due to the potential negative attention from some stakeholders (e.g. customers, community members, NGOs, lobby groups, etc.)…”
Section: Discussionmentioning
confidence: 98%
“…Aji (2014) defines the concept as "act of misleading consumer regarding the environmental applications of a company and the product"s environmental benefits." Lyon and Maxwell (2011) indicate that most consumers consider companies" disclosure of green products just as a marketing strategy and they would not trust the green claims. As a result, greenwash can cause consumers to be confused by environmental claims and to be confused by purchasing green products.…”
Section: The Effect Of Greenwash On Green Consumer Confusionmentioning
confidence: 99%
“…Accordingly, greenwash can be a barrier to building green trust towards a brand. When consumers perceive greenwashing behaviors of companies, they will be more likely to feel confused and overwhelmed with corporate social responsibility claims (Parguel et al, 2011) Then, confused consumers do not trust green claims although companies dictate their products are "green" (Lyon and Maxwell, 2011;Chen et al, 2014).…”
Section: The Effect Of Green Confusion On Green Trustmentioning
confidence: 99%