Mere facade? Is greenwashing behaviour lower in low‐carbon corporates?

Abstract

Corporate greenwashing has become a focal point in the academic realm. However, there has been limited research exploring the factors influencing corporate greenwashing, particularly from the perspective of pollution emissions. This study uses data from listed companies from 2011 to 2021 and employs a two‐way fixed‐effects model to unveil the correlation and mechanisms between carbon emissions and corporate greenwashing. Additionally, it examines the restraining effects of internal and external pressures on this relationship. The research reveals a significant positive correlation between corporate carbon emissions and greenwashing. Second, internal controls, audit regulations and regulatory regulations reversed this positive relationship. Third, the study finds that reducing risk tolerance and increasing employee compensation are pathways through which carbon emissions promote corporate engagement in greenwashing. Finally, this study indicates that the spillover effects of carbon emissions prompt other companies in the same city to engage in greenwashing. In conclusion, this study provides rich empirical evidence for the greenwashing literature and offers novel theoretical insights into promoting substantive green practices and carbon neutrality, particularly in developing countries such as China.