Regulatory-driven corporate greenwashing: Evidence from “low-carbon city” pilot policy in China

Zhang, Guanglong

doi:10.1016/j.pacfin.2023.101951

Cited by 54 publications

(13 citation statements)

References 60 publications

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“…Despite traditional reward and punishment policies, directional policies, such as the "low-carbon city" pilot policy where the Chinese central government prompts regions to aggressively reduce carbon emissions, have a more profound impact on greenwashing among companies located in the implemented regions. Zhang utilizes the "low-carbon city" pilot policy as a quasi-experiment design and finds that affected firms in these regions exhibit increased greenwashing manifested as more symbolic rhetoric and selective disclosure of positive information, with minimal substantive actions and suppression of negative news [26]. The trend is more pronounced among brown firms, politically connected firms, and those in regions with greater government interventions and GDP growth incentives.…”

Section: Greenwashingmentioning

confidence: 99%

“…Secondly, unlike Western countries, China operates within a highly centralized political and economic system where government policy is crucial in mediating CSR practices. For example, the "low-carbon city" policy, despite being introduced as a directive by the central government, has inadvertently allowed brown companies to benefit from greenwashing practices, contradicting its initial vision [26]. Future studies could investigate policy shocks by employing a quasi-experimental design.…”

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confidence: 99%

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A Review of Corporate Social Responsibility Decoupling and Its Impact: Evidence from China

Luan

2024

Sustainability

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CSR decoupling refers to the misalignment between a company’s stated CSR policies and its actual practices, resulting in issues like diminished financial performance and heightened risk. While initially explored in developed economies such as the US, recent research has shifted focus towards developing nations like China. However, a comprehensive review of CSR decoupling literature in the Chinese market remains lacking. Previous research typically examines the decoupling phenomenon at the general level of CSR, without considering the distinct impacts of its three key components: environmental, social, and governance pillars. Our study seeks to address this gap by conducting a comprehensive review of CSR decoupling covering 82 related studies, specifically analyzing its environmental, social, and governance dimensions within the context of China. Our findings offer valuable insights for both future research on CSR decoupling in China and policymaking. Firstly, there is a pressing need to prioritize investigations into means–ends decoupling, given the constraints on policy–practice decoupling imposed by stringent regulations. Secondly, the role of government policies in shaping CSR practices is pivotal. Future research could delve into the impacts of policy shocks using quasi-experimental designs. Thirdly, emerging issues like workplace safety, the executive pay gap, and gender diversity are gaining prominence in China’s CSR landscape. Lastly, the dominance of state ownership presents significant challenges to corporate governance, warranting further exploration.

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Section: Greenwashingmentioning

confidence: 99%

mentioning

confidence: 99%

A Review of Corporate Social Responsibility Decoupling and Its Impact: Evidence from China

Luan

2024

Sustainability

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“…A high variability of ESG scores will lead to the probability of greenwashing [ 74 ]. While green risk and ESG performance are not a mere reverse variation relationship [ 75 ], green risk changes corporate decision-making in response to environmental regulatory policies. According to the theory of signals and resource competition, when faced with the pressure of LCCP policy, ESG disagreement, which lead to greenwashing, has a stronger incentive to improve the pilot cities' ESG performance, thereby sending positive signals to markets and stakeholders to improve the availability of resources competition.…”

Section: Further Analysesmentioning

confidence: 99%

“…Therefore, we further discuss whether corporate greenwashing risk affects the LCCP policy in promoting the ESG performance. Following Zhang(2023), we adopt the approach to measurement of corporate greenwashing, which defines it as the difference between standardized ESG scores and ESG performance scores [ 75 ]. In details, the variable

is adopted by Bloomberg ESG to measure standardized ESG disclosure, whereas Huazheng ESG focuses on ESG performance, The variable

is used Bloomberg ESG data for measuring ESG disclosure, while the news rating index RKS CSR rating for the ESG performance.…”

Section: Further Analysesmentioning

confidence: 99%

Carbon reduction and corporate sustainability: Evidence from low-carbon city pilot policy

Yu,

Li,

2024

Heliyon

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“…Previous studies have employed content analysis, questionnaires, and third-party authentication methods to measure corporate greenwashing. For instance, Zhang [72] and Testa et al [73] employ content analysis methods to quantify the extent of greenwashing. However, concerns exist regarding the inherent validity of content analysis due to potential human coding errors, and it is also difficult to apply in large-sample studies due to workload.…”

Section: Dependent Variable: Corporate Greenwashingmentioning

confidence: 99%

Peeking into Corporate Greenwashing through the Readability of ESG Disclosures

Hu,

Li,

et al. 2024

Sustainability

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Faced with the widespread issue of greenwashing, there is a pressing need for an effective approach to assess the extent of corporate involvement in such hypocritical practices. This study aims to address this concern by examining the association between corporate ESG disclosures’ readability and greenwashing. We gauge the readability using a modified Fog Index and construct a company’s peer-relative greenwashing score based on data from third-party databases. The empirical analysis reveals a negative relationship between the level of corporate greenwashing and the readability of its ESG disclosures, suggesting that companies whose ESG disclosures are more readable are less likely to engage in greenwashing. This negative relationship is particularly pronounced in companies characterized by higher levels of information asymmetry. However, the relationship is weaker after 2018, when the “Code of Corporate Governance for Listed Companies” was implemented. In conclusion, our research highlights the significance of ESG disclosure readability in effectively conveying and predicting corporate greenwashing practices. This study provides valuable insights for investors seeking to evaluate corporate performance and make well-informed investment decisions.

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Regulatory-driven corporate greenwashing: Evidence from “low-carbon city” pilot policy in China

Cited by 54 publications

References 60 publications

A Review of Corporate Social Responsibility Decoupling and Its Impact: Evidence from China

A Review of Corporate Social Responsibility Decoupling and Its Impact: Evidence from China

Carbon reduction and corporate sustainability: Evidence from low-carbon city pilot policy

Peeking into Corporate Greenwashing through the Readability of ESG Disclosures

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