Financial constraints and corporate greenwashing strategies in China

Fan Xia; Xue Yang; Xiaoliang Li; Bing Zhang

doi:10.1002/csr.2453

journal article Jan 22, 2023

Financial constraints and corporate greenwashing strategies in China

Fan Xia

Xue Yang

Xiaoliang Li

Bing Zhang

Corporate Social Responsibility and Environmental Management Vol. 30 No. 4 pp. 1770-1781 · Wiley

View at Publisher Save 10.1002/csr.2453

Abstract

AbstractCorporate environmental responsibility, in response to the call for sustainable development, has become a critical ethical capital for companies to increase firm values and to obtain resources. However, this also gives rise to the concern of “greenwashing” that companies may selectively release environmental performance information to mislead the public and investors. Using the administrative environmental penalty data of all listed companies in China from 2017 to 2018, this research examines the corporate's greenwashing strategies. Our results show that greenwashing by listed companies in China is widespread, that only 13.6% environmental penalties have been disclosed by companies during our studied period. Companies choose to greenwash environmental performance mainly due to future demand for investment and financing, and companies with higher debt levels are found more likely to engage in greenwashing. Our findings suggest that it is not a rare practice for Chinese companies to risk their business ethics to pursue economic interests. It is necessary to enforce environmental information disclosure for listed companies in China and to increase their costs of unethical behaviors.

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Metrics

161

Citations

80

References

Details

Published: Jan 22, 2023
Vol/Issue: 30(4)
Pages: 1770-1781
License: View

Authors

F

Fan Xia

State Key Laboratory of Pollution Control & Resource Reuse, School of Environment Nanjing University Nanjing China

X

Xue Yang

School of Business (Management) Nanjing University Nanjing China

X

Xiaoliang Li

Chinese Academy for Environmental Planning Beijing China

B

Bing Zhang

State Key Laboratory of Pollution Control & Resource Reuse, School of Environment Nanjing University Nanjing China

Cite This Article

Fan Xia, Xue Yang, Xiaoliang Li, et al. (2023). Financial constraints and corporate greenwashing strategies in China. Corporate Social Responsibility and Environmental Management, 30(4), 1770-1781. https://doi.org/10.1002/csr.2453

Financial constraints and corporate greenwashing strategies in China

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