The Agency of Greenwashing

As climate change increasingly challenges business models, the disclosure of firm environmental performance casts growing attention by corporate stakeholders. This creates wider opportunities and incentives for greenwashing behaviours. EDHEC-Risk Institute proposes a novel measure of greenwashing and investigates its determinants and consequences for U.S. firms. They show that board characteristics are variously associated with the apparent degree of corporate greenwashing. Importantly, they find that greenwashing reduces firm value.