by Christopher Marquis, Michael W. Toffel, and Yanhua Zhou
Nearly all of the 100 largest companies in Japan, France, and the United Kingdom—and the vast majority of such companies in the United States—issue sustainability reports. These very high reporting rates reflect increasing pressure on companies from stakeholders — including investors, consumers, governments, and civil society — to be more transparent about their environmental impacts.
Does all this environmental information provide greater corporate accountability by accurately portraying companies’ environmental impacts? Or is this just symbolic action where companies aim to merely appear accountable but are actually engaging in greenwashing, creating an overly optimistic impression of their environmental performance by selectively disclosing their inconsequential environmental indicators while concealing the more consequential ones?
Concerns about greenwashing are widespread, ranging from skeptical environmental nongovernmental organizations that offer greenwashing awards and Oscars and even a game to detect greenwashing, to media accounts questioning the legitimacy of corporate green branding and lobbying efforts, to the government in the US and elsewhere issuing policies that seek to mitigate the most blatant forms of greenwashing.
In an article forthcoming in Organization Science, we provide the first systematic evidence of how the global environmental movement affects the authenticity of corporate environmental transparency.