What are the consequences of corporate greenwashing? A look into the consequences of greenwashing in consumer and financial markets

Fabian Maximilian Johannes Teichmann · Chiara Wittmann · Bruno S. Sergi

42 citations0/0 files storedJournal of Information Communication and Ethics in Society

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Environmental Sustainability in Business Corporate Social Responsibility Reporting Sustainable Finance and Green Bonds

Abstract

Purpose The purpose of this paper is to explore the nuances of the consequences of greenwashing in the consumer and financial markets. Greenwashing is discussed frequently but in very abstract terms. Hence, a closer examination of the palpable consequences elucidates the ripple effects of this widespread phenomenon. Design/methodology/approach Focal points are the concept of green marketing, the stigmatization of corporations in the media and the regulatory consequences of greenwashing behaviour across consumer and financial markets. The two markets are paralleled in order to trace the novelties as well as the points of commonality in greenwashing. Findings The current consequences are an insufficient deterrence in both markets. The regulatory trend in both markets is leaning towards more stringent and punitive measures, which will likely affect the efficacy of the deterrence factor. Originality/value The influence on consumer perception is identified both as a motivating factor for greenwashing and as one of the most immediate elements which is negatively influenced by its exposition. In addition to the fact that greenwashing practices are common across the two markets, this paper identifies that a systemic deterioration of investor trusts significantly compromises the potential of sustainable finance and impacts investment in the financial market, mirrored in the negative consequences on consumer reactions to greenwashed products.

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References

2003Corporate Social and Financial Performance: A Meta-Analysis 2015ESG and financial performance: aggregated evidence from more than 2000 empirical studies 2011The Drivers of Greenwashing 2000Media Reputation as a Strategic Resource: An Integration of Mass Communication and Resource-Based Theories 2015The Means and End of Greenwash 2011The Harm of Symbolic Actions and Green-Washing: Corporate Actions and Communications on Environmental Performance and Their Financial Implications 2005Politics in the Supermarket: Political Consumerism as a Form of Political Participation 2020Perceived Greenwashing: The Effects of Green Marketing on Environmental and Product Perceptions

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