Resumo

The disclosure of sustainability information is not always done ethically by companies. In this vein, greenwashing practices occur when there is a discrepancy between green intentions and green outcomes (Ghitti et al., 2023). Greenwashing is a practice of disclosing selective environmental information, omitting information that could be seen as negative by society (Marquis et al., 2016). According to Liu et al. (2023), greenwashing can be seen as an exaggerated communication strategy, in which the company creates a positive green image for stakeholders without fulfilling green promises.

Given the limitations of previous studies, our study has the following research question: What are the consequences of corporate greenwashing? Our purpose is to investigate the effect of corporate greenwashing on the reputation, innovation and market value of companies in Latin America.

In the 1980s, the term "greenwashing" emerged and became widely acknowledged for delineating the phenomenon of asserting misleading or overstated assertions regarding sustainability with the aim of capturing a larger market presence (Dahl, 2010). Yu et al. (2020) defined greenwashing as a misleading disclosure in the three dimensions of ESG holistically. The academic interest in greenwashing research is currently experiencing a noticeable upward trend, especially since 2017.

To achieve our research purpose, we examined the greenwashing of 428 companies based in 14 Latin American countries and selected three organizational factors: corporate reputation, innovation capacity and market value. To analyze the collected data, we combined a symmetric technique (panel data analysis) with an asymmetric technique (fuzzy set qualitative comparative analysis) to give greater robustness to the findings.

Our findings revealed that greenwashing practices affect the corporate reputation, innovation capacity and market value of companies. More specifically, companies that commit more greenwashing practices tend to have a higher reputation, make more investments in R&D, as well as a higher market value.

Although greenwashing is an unethical practice that positively affects reputation, innovation and market value, stakeholders are more attentive to this type of corporate communication and may boycott the lack of alignment between ''walking'' and ''talking''. This means that our findings are not an endorsement of greenwashing practices. The results of this research invite governments in Latin America to encourage their companies to reduce greenwashing, as this can increase stakeholders' trust in the environmental information disclosed.

Chen, P., & Dagestani, A. A. (2023). Greenwashing behavior and firm value – From the perspective of board characteristics. Corporate Social Responsibility and Environmental Management, 30(5), 2330–2343. Ghitti, M., Gianfrate, G., & Palma, L. (2023). The agency of greenwashing. Journal of Management and Governance. Ioannou, I., Kassinis, G., & Papagiannakis, G. (2023). The Impact of Perceived Greenwashing on Customer Satisfaction and the Contingent Role of Capability Reputation. Journal of Business Ethics, 185(2), 333–347.