The greenwashing effects on corporate reputation and brand hate, through environmental performance and green perceived risk

Abstract

PurposeWhen a company practices greenwashing, it violates consumers' expectations by deliberately deceiving them about their environmental practices or the benefits of their products/services. This study investigated the effects of greenwashing on corporate reputation and brand hate. Furthermore, this study explored the mediating effects of perceived environmental performance and green perceived risk.Design/methodology/approachA survey design using cross-sectional primary data from 420 Portuguese consumers who identified and recognized brands engaged in greenwashing was employed. The proposed hypotheses were tested using structural equation modeling techniques.FindingsThis study's findings show that consumer perceptions of greenwashing may damage brands. The results show that greenwashing has a negative effect on corporate reputation through perceived environmental performance and green perceived risk. Additionally, greenwashing has a positive direct effect on brand hate and a negative effect on green perceived risk. Therefore, reducing greenwashing practices can improve consumers' perceptions of corporate environmental performance, buffer green perceived risk, and ultimately enhance corporate reputation. This can lead to positive relationships with customers.Originality/valueBased on signaling and expectancy violation theories, this study develops a new framework highlighting the detrimental effects of greenwashing on brands. The combination of these theories provides the right framework to understand how greenwashing may lead to extreme feelings like brand hate and negative perceptions of corporate reputation, thus advancing the current research that lacks studies on the association between these constructs.

The Impact of Greenwashing on Brand Reputation, Brand Credibility, and Green Brand Equity: Evidence from the Household Appliances Market

“…Second, this study addressed the fact that greenwashing has a detrimental impact on brand reputation. This result is in line with Xiao et al (2022); Ioannou et al (2023); Santos et al (2023), who confirmed that greenwashing decreases brand reputation. Third, the current research found that greenwashing harms brand credibility.…”

“…Xiao et al (2022) also confirmed that greenwashing decreases brand reputation and harms brand legitimacy. Moreover, Santos et al (2023) argued that greenwashing harms a company's reputation. Considering the discussions mentioned above, the following hypothesis is presented:…”

“…Second, our research revealed that greenwashing harms brand reputation and credibility. Santos et al (2023) proposed that a brand's reputation may suffer if it engages in greenwashing or exaggerates a product's sustainability features with deceptive information. In addition, customer trust and credibility can be damaged by greenwashing.…”

Environmental knowledge level and consumer behavior regarding green fashion: a moderated mediation model

“…The global sustainable apparel market is valued at USD 11.2 million in 2023 and is projected to grow at a CAGR of 9.3% to reach USD 27.2 million by the end of 2033 (Fact.MR, 2022). However, there are many debates regarding whether the practices of these enterprises are involving the issue of greenwashing (Santos et al ., 2023) and whether these practices are in line with the principles of sustainable development (Izagirre-Olaizola, 2021). For example, fast fashion brands ZARA and HM have been promoting sustainable development in recent years and encouraging consumers to participate in “used clothes recycling” programs.…”