Different shades of green deception - Greenwashing’s adverse effects on corporate image and credibility

Abstract

Climate change poses one of today’s greatest challenges, compelling organizations to adopt sustainable practices, which are frequently communicated to bolster their image and credibility. However, some organizations tend to exaggerate their green commitment, resulting in a perceived disparity between their environmental claims and actions, which is commonly referred to as greenwashing. This study examines the impact of different levels of greenwashing on corporate image and credibility. Through a 4×2 between-subjects experiment, participants were exposed to a publishing company’s promise to use 90 % recycled paper, followed by the revelation that the actual amount of recycled paper used was either 90 %, 86 %, 54 %, or 23 %. Additionally, the pre-image of the company was manipulated by portraying it as either a popular or an unpopular employer. Results indicate that even small discrepancies lead to a decrease in image perception and credibility, with motivated reasoning and expectation violation mediating these effects. However, these effects were not influenced by a positive or negative pre-image of the company. Overall, this research highlights the importance of honest and transparent communication of CSR activities.