How Sustainability Ratings Might Deter ‘Greenwashing’: A Closer Look at Ethical Corporate Communication

Abstract

ABSTRACT. Of the many ethical corporate marketing practices, many firms use corporate social responsibility (CSR) communication to enhance their corporate image. Yet consumers, overwhelmed by these more or less well-founded CSR claims often have trouble identifying truly responsible firms. This confusion encourages "greenwashing" and may make CSR initiatives less effective. On the basis of attribution theory, this study investigates the role of independent sustainability ratings on consumers' responses to companies' CSR communication. Experimental results indicate the negative effect of a poor sustainability rating for corporate brand evaluations in the case of CSR communication, because consumers infer less intrinsic motives by the brand. Sustainability ratings thus could act to deter "greenwashing" and encourage virtuous firms to persevere in their CSR practices.

Won’t Get Fooled Again: The Effects of Internal and External CSR ECO-Labeling

“…Whereas internal CSR communication itself will thus rather be perceived as extrinsic, positive external CSR communication should drive attributions to intrinsic motives due to higher levels of credibility and trust (Parguel et al 2011;Becker-Olsen et al 2006). Prior research found that consumers are more likely to have negative attitudes, beliefs, and behaviors toward the organization when they assign extrinsic motives compared to intrinsic motives (Becker-Olsen et al 2006;Ellen et al 2006;Mohr et al 1998;Yoon et al 2006).…”

“…This profusion of CSR labels, whether justified or not, makes it difficult to distinguish which label is certified by a third party (external CSR label), and hence provides a more objective assessment of a company's CSR efforts, and which label is uncertified (internal CSR claim; Nyilasy et al 2014;Parguel et al 2011). Therefore, it is also of interest to investigate how consumers respond to the combination of such an external multilevel environmental performance rating and internal CSR efforts controlled by the company.…”

“…A combination of external CSR communication and internal CSR communication could be strategic for shaping consumer responses, for aside from providing external CSR communication, it is suggested that organizations themselves need to communicate their CSR efforts in order to benefit (Parguel et al 2011), and build a reputation that might protect (or restore) its image in the face of negative publicity (Vanhamme and Grobben 2009). However, communicating too much about CSR efforts can cause consumers to question a company's motives which creates skepticism toward the advertised message as well as toward the company itself, known as the self-promoters paradox (Ashforth and Gibbs 1990).…”

“…Translated to CSR communication, consumer reactions may thus range from inferring an attempt to take opportunistic advantage of sustainable development trends (extrinsic motives) to a sincere environmental consciousness as part of the company's DNA (intrinsic motive) (Parguel et al 2011). Of course, in between these two extreme poles of the continuum, interpretations comprising shades of both poles will be frequent (e.g., imagine a consumer thinking ''I think this is a good initiative but I do feel the company could put in even more effort'').…”

“…In general, when consumers are exposed to an internal CSR claim but have no further information, like a verified third-party label (external label), they are more likely to attribute this communication to the current sustainability trend, which is perceived as an extrinsic motive (Parguel et al 2011). Whereas internal CSR communication itself will thus rather be perceived as extrinsic, positive external CSR communication should drive attributions to intrinsic motives due to higher levels of credibility and trust (Parguel et al 2011;Becker-Olsen et al 2006).…”