IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v127y2021icp228-240.html
   My bibliography  Save this article

Green lies and their effect on intention to invest

Author

Listed:
  • Gatti, Lucia
  • Pizzetti, Marta
  • Seele, Peter

Abstract

The article explores the consequences of greenwashing deceptions on intention to invest. It analyses whether the presence of a greenwashing lie to stakeholders is detrimental to intention to invest. When a company greenwashes, it deliberately deceives stakeholders about its environmental commitment. Our results suggest that greenwashing has a greater negative impact on intention to invest than a corporate misbehaviour unrelated to a deceptive communication. In order to understand how different forms of greenwashing may affect intention to invest, we develop a typology of greenwashing deceptions, based on the variety of greenwashing cases that have emerged recently. The results show that individuals are less inclined to invest in a company that falsifies its claims (falsification) and which engages in manipulative business practices (deceptive manipulation), as compared to a company that instrumentally selects which information to disclose (information selection) or tries to obscure misbehaviours through publicizing its good business practices (attention diversion).

Suggested Citation

  • Gatti, Lucia & Pizzetti, Marta & Seele, Peter, 2021. "Green lies and their effect on intention to invest," Journal of Business Research, Elsevier, vol. 127(C), pages 228-240.
    • Handle: RePEc:eee:jbrese:v:127:y:2021:i:c:p:228-240
    DOI: 10.1016/j.jbusres.2021.01.028
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296321000333
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusres.2021.01.028?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Pascual Berrone & Andrea Fosfuri & Liliana Gelabert, 2017. "Does Greenwashing Pay Off? Understanding the Relationship Between Environmental Actions and Environmental Legitimacy," Journal of Business Ethics, Springer, vol. 144(2), pages 363-379, August.
    2. Rémi Bazillier & Julien Vauday, 2014. "CSR into (new) perspective," Post-Print hal-01362439, HAL.
    3. Gergely Nyilasy & Harsha Gangadharbatla & Angela Paladino, 2014. "Perceived Greenwashing: The Interactive Effects of Green Advertising and Corporate Environmental Performance on Consumer Reactions," Journal of Business Ethics, Springer, vol. 125(4), pages 693-707, December.
    4. Kent Walker & Fang Wan, 2012. "The Harm of Symbolic Actions and Green-Washing: Corporate Actions and Communications on Environmental Performance and Their Financial Implications," Journal of Business Ethics, Springer, vol. 109(2), pages 227-242, August.
    5. Béatrice Parguel & Florence Benoît-Moreau & Fabrice Larceneux, 2011. "How Sustainability Ratings Might Deter "Greenwashing": A Closer Look at Ethical Corporate Communication," Post-Print halshs-00561187, HAL.
    6. Aspara, Jaakko & Chakravarti, Amitav, 2015. "Investors’ reactions to company advertisements: the persuasive effect of product-featuring ads," LSE Research Online Documents on Economics 64130, London School of Economics and Political Science, LSE Library.
    7. Joëlle Vanhamme & Valérie Swaen & Guido Berens & Catherine Janssen, 2015. "Playing with fire: aggravating and buffering effects of ex ante CSR communication campaigns for companies facing allegations of social irresponsibility," Marketing Letters, Springer, vol. 26(4), pages 565-578, December.
    8. Siano, Alfonso & Vollero, Agostino & Conte, Francesca & Amabile, Sara, 2017. "“More than words”: Expanding the taxonomy of greenwashing after the Volkswagen scandal," Journal of Business Research, Elsevier, vol. 71(C), pages 27-37.
    9. Kristina Rennekamp, 2012. "Processing Fluency and Investors’ Reactions to Disclosure Readability," Journal of Accounting Research, Wiley Blackwell, vol. 50(5), pages 1319-1354, December.
    10. Jonas Nilsson, 2008. "Investment with a Conscience: Examining the Impact of Pro-Social Attitudes and Perceived Financial Performance on Socially Responsible Investment Behavior," Journal of Business Ethics, Springer, vol. 83(2), pages 307-325, December.
    11. Béatrice Parguel & Florence Benoît-Moreau & Fabrice Larceneux, 2011. "How Sustainability Ratings Might Deter ‘Greenwashing’: A Closer Look at Ethical Corporate Communication," Journal of Business Ethics, Springer, vol. 102(1), pages 15-28, August.
    12. Lars Moratis, 2017. "The (In)credible Bulk: The Role of CSR Standards in Enhancing the Credibility of Corporate CSR Claims," CSR, Sustainability, Ethics & Governance, in: Maria Aluchna & Samuel O. Idowu (ed.), The Dynamics of Corporate Social Responsibility, chapter 0, pages 239-263, Springer.
    13. Magnus Jansson & Anders Biel, 2011. "Motives to engage in sustainable investment: a comparison between institutional and private investors," Sustainable Development, John Wiley & Sons, Ltd., vol. 19(2), pages 135-142, March/Apr.
    14. Delfino, Alexia & Marengo, Luigi & Ploner, Matteo, 2016. "I did it your way. An experimental investigation of peer effects in investment choices," Journal of Economic Psychology, Elsevier, vol. 54(C), pages 113-123.
    15. Yu-Shan Chen & Ching-Hsun Chang, 2013. "Greenwash and Green Trust: The Mediation Effects of Green Consumer Confusion and Green Perceived Risk," Journal of Business Ethics, Springer, vol. 114(3), pages 489-500, May.
    16. W. Brooke Elliott & Stephanie M. Grant & Kristina M. Rennekamp, 2017. "How Disclosure Features of Corporate Social Responsibility Reports Interact with Investor Numeracy to Influence Investor Judgments," Contemporary Accounting Research, John Wiley & Sons, vol. 34(3), pages 1596-1621, September.
    17. Joakim Sandberg & Carmen Juravle & Ted Hedesström & Ian Hamilton, 2009. "The Heterogeneity of Socially Responsible Investment," Journal of Business Ethics, Springer, vol. 87(4), pages 519-533, July.
    18. Evan Mills, 2009. "A Global Review of Insurance Industry Responses to Climate Change," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 34(3), pages 323-359, July.
    19. Jahn, Johannes & Brühl, Rolf, 2019. "Can bad news be good? On the positive and negative effects of including moderately negative information in CSR disclosures," Journal of Business Research, Elsevier, vol. 97(C), pages 117-128.
    20. Lyn M. Swol & Michael T. Braun, 2014. "Communicating Deception: Differences in Language Use, Justifications, and Questions for Lies, Omissions, and Truths," Group Decision and Negotiation, Springer, vol. 23(6), pages 1343-1367, November.
    21. Price, Joseph M. & Sun, Wenbin, 2017. "Doing good and doing bad: The impact of corporate social responsibility and irresponsibility on firm performance," Journal of Business Research, Elsevier, vol. 80(C), pages 82-97.
    22. Simona Romani & Silvia Grappi & Richard P. Bagozzi, 2016. "Corporate Socially Responsible Initiatives and Their Effects on Consumption of Green Products," Journal of Business Ethics, Springer, vol. 135(2), pages 253-264, May.
    23. repec:dau:papers:123456789/4687 is not listed on IDEAS
    24. Nick Lin-Hi & Igor Blumberg, 2018. "The Link Between (Not) Practicing CSR and Corporate Reputation: Psychological Foundations and Managerial Implications," Journal of Business Ethics, Springer, vol. 150(1), pages 185-198, June.
    25. Peter Seele & Lucia Gatti, 2017. "Greenwashing Revisited: In Search of a Typology and Accusation‐Based Definition Incorporating Legitimacy Strategies," Business Strategy and the Environment, Wiley Blackwell, vol. 26(2), pages 239-252, February.
    26. Fisher, Robert J, 1993. "Social Desirability Bias and the Validity of Indirect Questioning," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 20(2), pages 303-315, September.
    27. Yu-Shan Chen & Chang-Liang Lin & Ching-Hsun Chang, 2014. "The influence of greenwash on green word-of-mouth (green WOM): the mediation effects of green perceived quality and green satisfaction," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(5), pages 2411-2425, September.
    28. Thomas P. Lyon & John W. Maxwell, 2011. "Greenwash: Corporate Environmental Disclosure under Threat of Audit," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 20(1), pages 3-41, March.
    29. Simona Romani & Silvia Grappi & Richard P. Bagozzi, 2016. "Erratum to: Corporate Socially Responsible Initiatives and Their Effects on Consumption of Green Products," Journal of Business Ethics, Springer, vol. 135(2), pages 399-399, May.
    30. Kim, Eun-Hee & Lyon, Thomas P., 2011. "Strategic environmental disclosure: Evidence from the DOE's voluntary greenhouse gas registry," Journal of Environmental Economics and Management, Elsevier, vol. 61(3), pages 311-326, May.
    31. Xingqiang Du & Yingying Chang & Quan Zeng & Yingjie Du & Hongmei Pei, 2016. "Corporate environmental responsibility (CER) weakness, media coverage, and corporate philanthropy: Evidence from China," Asia Pacific Journal of Management, Springer, vol. 33(2), pages 551-581, June.
    32. Gerdien de Vries & Bart W. Terwel & Naomi Ellemers & Dancker D. L. Daamen, 2015. "Sustainability or Profitability? How Communicated Motives for Environmental Policy Affect Public Perceptions of Corporate Greenwashing," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 22(3), pages 142-154, May.
    33. Xingqiang Du, 2015. "How the Market Values Greenwashing? Evidence from China," Journal of Business Ethics, Springer, vol. 128(3), pages 547-574, May.
    34. Hodge, Frank & Hopkins, Patrick E. & Pratt, Jamie, 2006. "Management reporting incentives and classification credibility: The effects of reporting discretion and reputation," Accounting, Organizations and Society, Elsevier, vol. 31(7), pages 623-634, October.
    35. Kathleen Cleeren & Marnik G. Dekimpe & Harald J. Heerde, 2017. "Marketing research on product-harm crises: a review, managerial implications, and an agenda for future research," Journal of the Academy of Marketing Science, Springer, vol. 45(5), pages 593-615, September.
    36. Kathryn Sharpe Wessling & Joel Huber & Oded Netzer, 2017. "MTurk Character Misrepresentation: Assessment and Solutions," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 44(1), pages 211-230.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marta Pizzetti & Lucia Gatti & Peter Seele, 2021. "Firms Talk, Suppliers Walk: Analyzing the Locus of Greenwashing in the Blame Game and Introducing ‘Vicarious Greenwashing’," Journal of Business Ethics, Springer, vol. 170(1), pages 21-38, April.
    2. Lucia Gatti & Peter Seele & Lars Rademacher, 2019. "Grey zone in – greenwash out. A review of greenwashing research and implications for the voluntary-mandatory transition of CSR," International Journal of Corporate Social Responsibility, Springer, vol. 4(1), pages 1-15, December.
    3. Riccardo Torelli & Federica Balluchi & Arianna Lazzini, 2020. "Greenwashing and environmental communication: Effects on stakeholders' perceptions," Business Strategy and the Environment, Wiley Blackwell, vol. 29(2), pages 407-421, February.
    4. Torelli, Riccardo & Balluchi, Federica & Lazzini, Arianna, 2019. "Greenwashing and Environmental Communication: Effects on Stakeholders’ Perceptions," OSF Preprints 97vxn, Center for Open Science.
    5. Jennifer L. Robertson & A. Wren Montgomery & Timur Ozbilir, 2023. "Employees' response to corporate greenwashing," Business Strategy and the Environment, Wiley Blackwell, vol. 32(7), pages 4015-4027, November.
    6. Honglei Mu & Youngchan Lee, 2023. "Greenwashing in Corporate Social Responsibility: A Dual-Faceted Analysis of Its Impact on Employee Trust and Identification," Sustainability, MDPI, vol. 15(22), pages 1-17, November.
    7. Francesca Bernini & Fabio La Rosa, 2024. "Research in the greenwashing field: concepts, theories, and potential impacts on economic and social value," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 28(2), pages 405-444, June.
    8. Wei Li & Weining Li & Veikko Seppänen & Timo Koivumäki, 2022. "How and when does perceived greenwashing affect employees' job performance? Evidence from China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1722-1735, September.
    9. Vera Ferrón‐Vílchez & Jesus Valero‐Gil & Inés Suárez‐Perales, 2021. "How does greenwashing influence managers' decision‐making? An experimental approach under stakeholder view," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(2), pages 860-880, March.
    10. Carlos Ignacio Gallo Aguila & María del Pilar Castro Arellano & Marco Antonio Rodríguez Vega & Eliana Maritza Barturen Mondragón & María del Pilar Quezada Castro & Guillermo Alexander Quezada Cast, 2024. "Trends in Scientific Production on Greenwashing based on Scopus (1990-2023)," International Journal of Energy Economics and Policy, Econjournals, vol. 14(4), pages 464-471, July.
    11. Teti, Emanuele & Etro, Leonardo L. & Pausini, Lorenzo, 2024. "Does greenwashing affect Company's stock Price? Evidence from Europe," International Review of Financial Analysis, Elsevier, vol. 93(C).
    12. Wei Li & Weining Li & Veikko Seppänen & Timo Koivumäki, 2023. "Effects of greenwashing on financial performance: Moderation through local environmental regulation and media coverage," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 820-841, January.
    13. Kaijun Gan & Silin Ye, 2024. "Window Dressing in Impression Management: Does Negative Media Coverage Drive Corporate Green Production?," Sustainability, MDPI, vol. 16(2), pages 1-22, January.
    14. Balluchi, Federica & Lazzini, Arianna & Torelli, Riccardo, 2020. "CSR and Greenwashing: A Matter of Perception in the Search of Legitimacy," OSF Preprints 5x6sy, Center for Open Science.
    15. Jiajia Zhang & Jin Sun, 2021. "Green Talk or Green Walk: Chinese Consumer Positive Word-of-Mouth to Corporate Environmental Actions in Polluting Industries," Sustainability, MDPI, vol. 13(9), pages 1-22, May.
    16. Thi Thu Huong Nguyen & Zhi Yang & Ninh Nguyen & Lester W. Johnson & Tuan Khanh Cao, 2019. "Greenwash and Green Purchase Intention: The Mediating Role of Green Skepticism," Sustainability, MDPI, vol. 11(9), pages 1-16, May.
    17. Tingfa Zhang & Huaying Qin & Weishuang Xu, 2022. "Environmental Regulation, Greenwashing Behaviour, and Green Governance of High-Pollution Enterprises in China," IJERPH, MDPI, vol. 19(19), pages 1-22, October.
    18. Adrian Lehr & Marion Büttgen & Silke Bartsch, 2021. "Don’t Jump on the Bandwagon: Negative Effects of Sharewashing," Schmalenbach Journal of Business Research, Springer, vol. 73(1), pages 75-123, March.
    19. Marco Ghitti & Gianfranco Gianfrate & Lorenza Palma, 2024. "The agency of greenwashing," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 28(3), pages 905-941, September.
    20. Szerena Szabo & Jane Webster, 2021. "Perceived Greenwashing: The Effects of Green Marketing on Environmental and Product Perceptions," Journal of Business Ethics, Springer, vol. 171(4), pages 719-739, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:127:y:2021:i:c:p:228-240. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.