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Highlights • Green bonds offer to reorient financial capital in support of sustainability. • Use-of-proceeds and environmental assurance distinguish green from regular bonds. • Practical concerns: protecting product integrity and enhancing product performance. • Political concerns: amplifying inequity and prioritising profits over outcomes. • Questions of use-value, greenwashing and market design could be (re)considered., Recent years have witnessed calls to ‘unlock’ private capital and unleash a wave of green finance that can address the global environmental crisis. To this end, ample resources are being invested in the rapidly growing market for green bonds: a debt security that links finance to projects that claim environmental benefits. This has placed green bonds in the vanguard of green finance, with a promise of treating our ecological deficit with debt. Such positioning demands close scrutiny of their obstacles, opportunities, and socio-environmental impacts. This paper contributes to this task with a multi-disciplinary review of green bond media articles, grey literature, and academic research. The paper has three key aims. It seeks to provide an introduction to green bonds for scholars who are not fluent in finance. Secondly, it attempts to provide a platform for further green finance research by delineating the major practical and political concerns with green bonds. Finally, it aims to widen our view of the green bond market by putting applied and critical research agendas into direct conversation. The paper concludes by calling for more explicit analysis of what green bonds can actually do; centring an expanded notion of greenwashing in green bond discourse; and pursuing more comparative, case driven research on green bond market development.

Plastic pollution is a global environmental concern and several approaches have been implemented seeking to reduce and control releases of plastic waste, especially in marine environments. Recently, disclosure of data on occurrence of single-use plastic straws among the litter collected in beach cleaning campaigns unleashed a worldwide movement that resulted on banning of these items in several countries. The market then quickly began to offer sustainable solutions as the professed biodegradable plastic straws. However, cases of greenwashing added to current limitations related to the technical standards used to attest biodegradability of commercial plastic products may lead these measures to be largely ineffective. Herein, a case study assessing the composition of plastic straws marketed in Brazil and United States under false claims of biodegradability was used as background for discussion of this neglected issue, which goes far beyond plastics straws. Thus, although some local regulations have already banned single-use plastic products, additional actions in regional and global scales should be implemented, especially concerning proper labeling of the alleged biodegradable products. Therefore, from a multi-dimensional perspective and considering the resistance of the powerful plastic industry, multiple management strategies focused on educating people – in the matters of deciding purchases based on correct labeling and properly discarding the waste –, are possibly our best chance to drive a positive global environmental change. Additionally, we also suggest the inclusion of this relevant subject among the tasks proposed by the Basel Convention Partnership on Plastic Waste.

Through an analysis of articles in Mining Journal, this article explores which risks and opportunities mining companies have experienced due to the increased demand for metals in renewable energy technologies. Wind power, solar cells, batteries, and fuel cells are highly dependent on metals such as platinum, cobalt, lithium, and rare earths that are mined in only a few countries. While the increased demand was an opportunity for the mining industry, extraction was linked with supply, political, economic, and environmental risks. Often it was when political risk coincided with the other risks that it became particularly troublesome. Some of the main obstacles were local protests and states’ wishes to profit from their domestic resources. Mining companies attempted to minimize the risks by developing technologies to overcome obstacles in the local environment, greenwashing, extracting in politically stable countries, and trying to spread positive messages in social media. To profit from the increased demand for metals for renewable energy technologies, mining companies need to be aware of global technology trends as well as local regulations while evaluating the risks and opportunities that lie ahead for extraction.

Due to the contradictions between environmental protection and the contemporary means of producing material-economic growth, companies are increasingly being placed on the Greenwashing List in China. The increasingly severe problem of greenwashing needs to be solved urgently. Government regulation plays a critical role in the prevention of greenwashing. Therefore, we introduce government regulation as a factor in the decision-making process of an enterprise's adoption of greenwashing, thus enriching the literature on the prevention of greenwashing and the validity of government regulations for greenwashing. Centered on heterogeneity, this paper divides enterprises into two types, i.e., dominant and inferior enterprises. In terms of game modeling, this study builds two evolutionary models that are influenced by a government punishment mechanism and tax subsidy mechanism for greenwashing and green innovation strategies and analyzes the evolutionarily stable strategy (ESS) of the models and the evolutionary process of dominant and inferior enterprises. This study found that the government punishment mechanism has an excellent inhibitory effect on the greenwashing practices of both dominant and inferior enterprises. However, the government tax subsidy mechanism is not able to suppress the greenwashing practices of inferior enterprises. In addition, the heterogeneities difference may determine whether green innovation strategies can be diffused and the speed of diffusion. As illustrated above, these results provide proposals for reducing the rate of greenwashing behaviors and for improving the effectiveness of the government regulation of companies' greenwashing behaviors.

This study draws on legitimacy theory to investigate the relationship between mandatory disclosure of greenhouse gas emissions by companies that are subject to specific environmental legislation (the Australian National Greenhouse Energy Reporting Act 2007) and the level of voluntary environmental disclosures. Using a sample of 535 observations, we find that i) Overall, legislation-affected companies increase their disclosures compared with non-affected companies, ii) As many companies reduce their disclosures as increase them, iii) there is an increase in the level of emissions volume disclosures in legislation-affected companies compared with the same company pre-implementation, iv) legislation-affected higher emitters have higher levels of voluntary disclosures. These findings are consistent with legitimacy theory, which predicts differential disclosures in circumstances to avoid scrutiny.

The personal care product (PCP) industry is a worldwide multi-billion-dollar industry. Several synthetic com-pounds like parabens and antimicrobial agents triclosan (TCS) and triclocarban (TCC) are ingredients in many PCPs. Due to growing public awareness of potential risks associated with parabens and other synthetic com-pounds, more PCPs are being marketed as "green," "alternative," or "natural." We analyzed 19 green and 34 conventional PCP products obtained from a European store for seven parabens, TCC, and TCS. We found no statistically significant difference in the concentrations between green and conventional products. Only four products mentioned parabens in the list of ingredients; however, parabens were detected in 43 products, and at mu g/g levels in seven PCPs. Methylparaben was typically present at the highest concentration, and one mascara exceeded the European legal concentration limit of methylparaben. Low concentrations of isopropyl-, isobutyl-, and benzylparabens, which are banned in the EU, were detected in 70% of PCPs. The cumulative estimated daily intake of parabens is an order of magnitude higher for people using only conventional products than those using green products exclusively. We propose that legislation be developed with more explicit rules on when a product can be advertised as "green" to aid consumers' choices. The personal care product (PCP) industry is a worldwide multi-billion-dollar industry. Several synthetic com-pounds like parabens and antimicrobial agents triclosan (TCS) and triclocarban (TCC) are ingredients in many PCPs. Due to growing public awareness of potential risks associated with parabens and other synthetic com-pounds, more PCPs are being marketed as "green," "alternative," or "natural." We analyzed 19 green and 34 conventional PCP products obtained from a European store for seven parabens, TCC, and TCS. We found no statistically significant difference in the concentrations between green and conventional products. Only four products mentioned parabens in the list of ingredients; however, parabens were detected in 43 products, and at mu g/g levels in seven PCPs. Methylparaben was typically present at the highest concentration, and one mascara exceeded the European legal concentration limit of methylparaben. Low concentrations of isopropyl-, isobutyl-, and benzylparabens, which are banned in the EU, were detected in 70% of PCPs. The cumulative estimated daily intake of parabens is an order of magnitude higher for people using only conventional products than those using green products exclusively. We propose that legislation be developed with more explicit rules on when a product can be advertised as "green" to aid consumers' choices.

This paper investigates mutual funds’ potential “greenwashing” behavior. Funds profiled as ESG- based receive higher inflows compared to other similar funds. Importantly, we show this is true also for ESG labeled funds having inferior objective ESG profiles, as based on Morningstar sustainability ratings, applying to both retail and institutional funds. An analysis of mutual funds repurposing into ESG focus shows that fund families especially tend to convert such funds whose ability to attract in-flows has been lagging behind. Documenting and uncovering the motives for greenwashing is vital in terms of trust in the emerging and rapidly growing market of green financial products, with high hopes for its pivotal role in combating climate change.

The United Nations’ Sustainable Development Goals (SDGs) are increasingly used by corporations for benchmarking and communicating their sustainability performance. The SDGs have several features that make them attractive for this purpose, including their universality, specificity and, in many cases, direct linkage with corporate outcomes. Corporations typically disclose their engagement strategies and outcomes voluntarily without the aid of standardized and externally verified reports. This creates a risk of corporations misusing the SDGs for “greenwashing” and “impact washing” their activities, for example through selective reporting of favorable information. Inaccurate and non-transparent disclosure can also introduce information asymmetries that distort decision-making by investors and other stakeholders. Increasing institutional change towards new measurement frameworks (such as GRI and SASB standards) and regulatory oversight to monitor disclosure (e.g., the EU’s Non-Financial Reporting Directive) is likely to improve transparency and reliability in sustainability reporting. This study critically examines the prospects of institutional changes that facilitate the integration, measurement, and reporting of corporate sustainability in general and the SDGs in particular. It also explores emerging innovations in corporate governance and regulation that seek to improve the integration of sustainability issues in corporations and financial markets.

In this paper, we identify heterogeneous CSR approaches by segregating the promised and realised social performance of firms to better understand how corporate social performance affects financial performance. Empirical CSR literature provides predominantly mixed findings on the social performance to financial performance relation because it often implicitly assumes that social performance is homogenous. We move beyond this homogeneity by observing that 50%, 24%, and 26% of the firms respectively approach strategic CSR, CSR-as-insurance, and corporate greenwashing. Where empirical CSR literature primarily analyses social performance in general, we show that it is precisely the heterogeneity in CSR approaches that shapes the social and financial performance of firms. Specifically, strategic CSR firms outperform CSR-as-insurance and especially corporate greenwashing firms in both realised social performance and financial performance.

Despite the increased attention and capital incentives around corporate sustainability, the development of sustainability reporting standards and monitoring systems has been progressing at a slow pace. As a result, companies have misaligned incentives to deliberately or selectively communicate information not matched with actual environmental impacts or make largely unsubstantiated promises around future ambitions. These incidents are broadly called “greenwashing,” but there is no clear consensus on its definition and taxonomy. We pay particular attention to the threat of greenwashing concerning carbon emission reductions by coining a new term, “carbonwashing.” Since carbon mitigation is the universal goal, the corporate carbon performance data supply chain is relatively more advanced than that of the entire sustainability data landscape. Nonetheless, the threat of carbonwashing persists, even far more severe than general greenwashing due to the financial values attached to corporate carbon performance. This paper contextualizes sustainable finance-related carbonwashing via an outline of the communication as well as the measurement, reporting, and verification (MRV) of carbon emission mitigation performance. Moreover, it proposes several actionable policy recommendations on how industry stakeholders and government regulators can reduce carbonwashing risks.

This paper discusses European competition law as it applies to agreements between market players to reduce, eliminate, or compensate for greenhouse gas emissions. It places these in an economic context, discusses the relevant provisions of the European treaties and applicable case law of the European Court of Justice. It identifies three broad criteria for the non-application of the prohibition of restrictive agreements, or exemption, to sustainability agreements.

We provide novel evidence on the nexus between a firm’s symbolic environmental disclosure to present an overly responsible public image, i.e., greenwashing, and the structure and design of its bank-loan contracts. Our evidence indicates that while greenwashing is associated with lower loan spread, creditors use a complex contract design rather than a single price measure to extract an appropriate expected return from greenwashing firms. Specifically, lenders appear to charge higher fees and employ stricter non-price contract terms to upend the impact of lower spread on their bottom line. Our findings highlight a unique mechanism through which the superior monitoring and information processing capabilities of private lenders could be deployed as a governance mechanism to guard against greenwashing without stifling firms’ external financial access.

This paper proposes a method to decompose the carbon intensity of a portfolio with respect to a benchmark into an allocation and a selection component. The carbon intensity decomposition allows a better understanding of the sources of the difference between the carbon footprint of a portfolio and that of its benchmark. As such, it prevents greenwashing by analyzing whether the carbon exposure of a portfolio results from active stock selection choices on the part of the manager or from passive sector exclusion decisions. Our approach is based on methods developed for traditional performance attribution. We discuss an equity example using the MSCI ACWI Sustainable Impact Index and a fixed income example around the ICE BofA Global Corporate Green Bond Index. In the latter example, we show that a higher portfolio carbon intensity does not necessarily contradict the portfolio’s stated ESG or Impact objectives. Our methodology can easily be extended to any other sustainability or impact metric that is constructed as a weighted average of asset scores, providing greater precision in analyzing the sources and implications of incorporating ESG into portfolio construction.

EU securities regulation has established a taxonomy of environmentally sustainable activities. This article discusses, from a law and economics standpoint, the potential of this taxonomy to support a sustainable corporate governance. Corporate governance can be an efficient way to channel investor preferences towards sustainability because the concentration of institutional shareholding has lowered the transaction costs of shareholder action. However, there is a principal-agent problem between institutional investors and their beneficiaries, which depends on greenwashing and undermines a sustainable corporate governance. This article argues that introducing environmental sustainability into EU mandatory disclosure aligns the institutional investors’ incentives with the interest of their beneficiaries and may foster the efficient inclusion of sustainability in corporate governance. The argument is threefold. Firstly, the EU Taxonomy may curb greenwashing by standardizing the disclosure of environmental sustainability. Secondly, this information may become salient for the beneficiaries as the same standards define the sustainability preferences to be considered in recommending and marketing financial products. Thirdly, sustainability disclosure prompts institutional investors to compete for sustainability-minded beneficiaries. Being unable to avoid unsustainable companies altogether, institutional investors are expected to cater to beneficiaries’ preferences for environmental sustainability using voice instead of exit.

Greenwashing, which is defined as the intersection of a firm's poor environmental performance and positive communication about its environmental performance, is a common phenomenon in the green packaging market. Bring-your-own-container (BYOC), becomes a growing eco-trend among eco-conscious consumers, where consumers use their own reusable container instead of the disposable packaging offered by the firm to buy and consume products. In this paper, we develop a stylized model to examine the impacts of BYOC on a firm's packaging and communication decisions. We further study the profit and environmental implications if greenwashing is stopped (e.g., by credible third-party certifications or government regulations). Our main results follow. First, when some consumers start using their own reusable container, demand for the firm-offered green disposable packaging is expected to decrease, but a profit-maximizing firm might paradoxically spend more efforts creating a green image of its product packaging, either by adopting green packaging or even engaging in greenwashing. Second, it could be profitable for a firm to adopt an unverifiable self-label rather than a credible third-party certification to disclose the green quality of its product packaging, even if the latter is costless. Finally, it might not always be wise for the government to regulate greenwashing, since it could cause a negative impact on the environment given the BYOC trend.

We provide a theoretical framework for reporting of firms' environmental and social impact (ESI). In our model the characteristics of a ESI report impact managerial efforts related to ESI, cash flows, stock prices, and greenwashing. In particular, we describe the implications of ESI report congruity, whether the report captures ESI inputs or outcomes, and the manager's tradeoffs regarding ESI efforts and reporting bias. Although stock price incentives tend to encourage ESI efforts and greenwashing simultaneously, ESI reports that capture ESI effects on cash flows tend to have a stronger price reactions than ESI reports that capture effects on ESI per se. ESI reports aligned with investors' aggregate preferences provide stronger incentives and lead to more positive outcomes than ESI reports that focus on either ESI or cash flow effects individually.

The passive index investing revolution and the demand for bespoke environmental, social, and governance (“ESG”) investment products are the most monumental changes to shape the investor landscape for many years. These developments have been accompanied by an unprecedented concentration of power among BlackRock, Vanguard, and State Street (the “Big Three” asset managers). Inevitably, the Big Three are among the most powerful shareholders of the companies that have been identified as major contributors to the climate crisis. Due to the failure of governments to take effective action in the global effort to combat climate change, there has been intense pressure directed at the Big Three to provide investor driven solutions. The Big Three have increasingly purported to assume what I call the role of “sustainable capitalists”. In this Article, I build upon Gilson and Gordon’s “agency capitalism” framework to put forward a new agency costs theory of sustainable capitalism. In this “sustainable capitalism” framework, I show that the Big Three still exhibit some form of “rational reticence”, especially with respect to firm-specific sustainability activism. There is also a risk that the Big Three may engage in “rational hypocrisy”, similar to corporate greenwashing. The combination of “rational reticence” and “rational hypocrisy” could result in a dual-monitoring shortfall – the “agency costs of sustainable capitalism”. In the agency capitalism framework, the best solution that emerged was for specialist activist hedge funds to fill the monitoring shortfall by initiating firm-specific activism as “governance arbitrageurs”. In this context, activist hedge funds adapted their strategies to gain crucial support from longer-term institutional investors. Analogously, in the sustainable capitalism framework, ESG hedge funds have the potential to initiate firm-specific ESG activism as “ESG arbitrageurs” in a manner that appeals to, and mobilizes, the sustainable capitalism of the Big Three. Most prominently, ESG hedge funds can play a unique role in nominating specialist climate directors to corporate boards, with the Big Three lending their support to credible nominees. Activist hedge funds already have significant expertise in board representation campaigns and the Big Three have shown willingness to support board changes. Other “responsible activists”, focusing more on portfolio-wide ESG issues, are also candidates for the role of “ESG arbitrageurs”. However, implementing meaningful strategic changes or board reform using the shareholder proposal mechanism has proven to be much more challenging. Therefore, a valuable role that other responsible activists can play in the ESG investor ecosystem is to focus on the problem of rational hypocrisy and target their activism at the Big Three themselves.

The COVID-19 pandemic has resulted in millions of employees working from home (“WFH”), a development that is challenging public and private standards for reporting and reducing greenhouse gas (“GHG”) emissions. Under these standards, corporations disclose the emissions from large buildings and the power plants that supply them with energy, but most do not report other types of emissions. When employees shift from working at an office to working at home, the corporate emissions appear to have decreased even though they simply have shifted beyond the boundary of the reporting requirement. This creates greenwashing risks—the ability to claim that corporate GHG emissions have declined when they have just shifted to non-reporting sources—and undermines incentives for corporations to induce employees to reduce emissions. The WFH transition accelerated dramatically during the COVID-19 pandemic, but it has been underway for some time and may lead to permanent shifts in the workplace for millions of employees. Using an efficiency and justice lens, this Article examines the standards regarding WFH emissions and concludes that undercounting could occur, could unfairly burden workers, and could increase net emissions. The Article proposes changes in emissions reporting standards to address these concerns, including amending or interpreting the standards to require employers to include employee WFH-related emissions in corporate emissions reports. The Article focuses on GHG emissions, but it has implications for other types of emissions as well as worker health and safety, taxation, and other fields that have been affected by the WFH transition.

Human activity has been continuously harming our planet’s eco-system, and we have reached an unprecedented level of urgency. According to the International Panel on Climate Change, we have caused virtually 100% of the global warming of the past century. Undeniably, finance plays a vital role in decreasing the devastating effects of our own behaviour. As the green bond market expands, it is undoubtedly becoming essential for green finance and the transition to a resource efficient, low-carbon, and socially inclusive economy. Still, the green bond market remains mostly unregulated. On this, the EU Green Bond Standard is a step forward, establishing the first framework encompassing regulatory supervision, the result of years of international cooperation on climate change mitigation. However, progress in any field entails both advantages and challenges. Striking the right balance of strictness will prove to be critical. The success of the benchmark will be ultimately conditioned by its efficient implementation, contingent upon the effect of regulation on innovation, the alignment with the EU Taxonomy, the proposed voluntary nature, and the extent to which it reduces greenwashing.

While there is much emphasis on authentic green practices, there is rising concern about the common practice of "greenwashing" or unsubstantiated claims about good environmental policies. Consequently, tourism businesses need to provide tangible evidences to create trust in their green claims. This paper, building on a sequential mixed method approach of data collection, proposes a potential green service encounter (GSE) framework by which hotel management can reassure customers and secure long-term patronage. Moderating role to two key contextual variables, travel purpose and environmental values of travelers, is investigated. Practical implications indicate that hotels should offer guests opportunities for enhanced involvement in GSE that help build consumer trust. The trust building process is dependent on a traveler's environmental values but independent of trip purpose. The GSE framework conceptualization included interviews with 25 green hotel guests and a panel of experts while empirical validation involved a sample of over 500 respondents.

This study developed a model linking perceived greenwashing, green trust, intention to revisit, intention to participate, and intention to spread negative word of mouth, based on Attribution Theory and Trust-Based Marketing Theory. A self-report survey utilizing two real green hotel practice scenarios (towel reuse vs. energy saving sign) was initiated. Results suggest that perceived greenwashing had a significant negative influence on green trust, which in turn was positively associated with revisit intention and intention to participate in the green practice and negatively associated with negative word of mouth. Moreover, prior experience with green hotel was found to moderate the relationship between green trust and the three behavioral intentions such that the relationships are weaker for consumers with prior experience than for those without. However, the moderation only worked in the towel reuse scenario. Numerous implications for marketers and hotel operators are suggested.

Corporate social responsibility (CSR) is a laudable goal for multinational enterprises (MNEs) because of the significant positive impact they can bring to the society and environment around the world. However, there are significant challenges to the practice of CSR in MNEs. This article discusses two major barriers to CSR that are especially significant for MNEs: leaders’ attitudes and cultural variance. We then apply insights from Rest’s ethical decision-making and cross-cultural research to offer guidance to leaders of MNEs to implement CSR in their organizations. We present a multistep process by which leaders first reflect on and clarify what goals they want to accomplish in the realm of CSR and then how to build consensus for those goals and modify them to incorporate the values and beliefs of local constituents.

Over the last decade, green growth policies have drawn increasing interest. OECD, UNEP, the World Bank and the EC have had several initiatives on the issue, and the Nordic countries have a special program on it. Definitions and indicator sets have been developed, though critics have pointed out that most initiatives amount to little more than a greenwashing of conventional economic growth. The paper proposes and discusses two definitions of green growth, one weak and one strong. Both build on resource- and carbon productivity measures, but whereas the weak definition requires absolute decoupling, the strong or “genuine green growth” requires sufficient decoupling to achieve science based targets for planetary boundaries. The approach is tested at country levels, starting with the climate boundary, by analyzing progress on carbon productivity (“CAPRO”) in Nordic countries since 2000. Results show that so far, among Nordic countries, Sweden, Finland and Denmark have achieved genuine green growth, while Norway has not. Implications for policy and communication of green growth are discussed.

As customers' green awareness improves, a growing number of Chinese companies are seeking to implement green management. However, in the implementation process, many green brands have engaged in greenwashing. After greenwashing, brand trust between green brands and their stakeholders can suffer a great deal of damage. A valid brand strategy and underlying mechanism should be identified to repair green brand trust after greenwashing. This study focuses on brand strategies and their underlying mechanisms adopted from institutional theory for green brand trust repair after greenwashing. Based on an organizational-level trust repair model, this study finds that companies should adopt a “timely-considered-timely” or “timely-considered-considered” brand strategy with three separate stages of brand trust repair, as opposed to other timely or considered brand strategy combinations, in order to achieve an optimal green brand trust repair effect. Moreover, this study also shows that the “considered-timely-timely” brand strategy achieves the worst green brand trust repair effect and that green brand legitimacy plays a significant mediating role in the brand trust repair process. These findings enrich the theories of brand management, green marketing, and trust repair and offer important managerial implications to help enterprises repair damaged trust.

We study firms' responses to two US Environmental Protection Agency (EPA) information-based interventions. First, the EPA disclosed toxicity information on the chemicals listed in the Toxics Release Inventory (TRI). Second, it grouped 17 of the TRI chemicals in the 33/50 voluntary program and challenged firms participating in this program to aggressively reduce their aggregate emissions. Firms therefore faced “twin” signals: focus on the most toxic chemicals, and focus on 33/50 targeted chemicals. We use a novel set of instruments to estimate the causal effects of these twin signals on chemical releases of U.S. manufacturing firms during the life of the 33/50 program (1991–1995), and after the program ended (1996–2013). We examine both “raw” emissions (in pounds) and “weighted” emissions (weighted by toxicity scores) of both 33/50-targeted and non-targeted chemicals. We find that 33/50 program participants reduced weighted emissions of 33/50-targeted chemicals only, with no effects on “raw” emissions or non-targeted chemicals. We also find that these reductions persisted after the program ended in 1995. These results suggest that firms are not unconditional greenwashers or environmental stewards. Rather, firms strategically invest resources to pursue environmental stewardship while taking into account multiple signals from their key stakeholders such as the EPA.

Widespread industrialization, rapid urbanization, and massive transport through land, waters, and air have led to catastrophes such as climate change, water pollution, resource limitation, and pandemics causing severe economic consequences, massive influences on the natural environment and pose a great threat to the life sustainability. Sustainability topic has a long history, and many policies and initiatives are in effect for a sustainable planet Earth, still gaps of varying degrees exist in almost all sectors. This article addresses the essentiality of minimising the sustainability gaps exist in diverse realms of life and citing few examples. Creating a cyclic path for production-consumption process in the economic sector through promoting circular economy, learning from the natural processes through appropriate biomimicking, and knowledge-integration from diverse disciplines and emphasizing sustainability in the educational sector are shown to lower the sustainability gaps.

The Equator Principles (EP) provide banks with environmental guidelines for project finance. Distinguishing between banks from developed and developing countries, we analyse the effect of EP adoption on performance. Two sets of hypotheses for each sub-sample of banks are developed and tested using comparison analyses, event-study methodology and two-stage selection modelling. We find that in developed (developing) countries, EP adoption is associated with an increase (decrease) in funding activity and in the share of income from interest. These results indicate that EP adoption is a strategic decision for banks in developing countries, and a form of greenwashing in developed countries.

The implementation of nature-based solutions (NbS) largely depends on the strategic planning of urban green infrastructure (UGI) and the measures adopted for planning and maintaining urban green areas under investment pressure. UGI planning is highly important for housing areas, and its elements are often used in selling campaigns for developers’ investments. In many cases, when developers refer to ecological values and greenery ​​in promotional campaigns, these are often considered as greenwashing (GW). The aim of the present study was to determine the frequency and mechanism of providing greenery and ecological solutions in renderings, the types of vegetation presented, and the approach of the developers to the existing greenery and other ecological values. The authors selected and analysed 73 development offers from 25 developers in Poznan, which is a major city in Poland with intensive development of housing investments. All the investments were analysed for the contents of advertisements and illustrations (plans and renderings). In the first stage of the study, analyses were conducted according to three groups of criteria: 1) creating an image of a green estate, 2) types of green spaces, and 3) approach to the existing green resources. The results revealed the importance of greenery in developers’ strategies. In the second stage, another four criteria for NbS and four indicators of GW were identified. The analysis helped us in assessing whether the offers met the NbS or GW assumptions. Statistical analyses showed that offers with the largest amount of GW indicators, indicating near and accessible green spaces, were primarily located distantly. The study verified that most of the marketing strategies of selected developers in Poznan should be considered as GW, and only a few estates exhibited NbS characteristics. However, the indicators of GW are often observed in the same cases. Further, the question arises whether NbS would be implemented in housing estates, in the absence of systemic regulations mandating the use of environmentally friendly solutions.

With the increasing trend toward sustainable purchasing, companies invest vast sums of money advertising their sustainability. Yet there are also companies doing the exact opposite for fear of consumer skepticism toward sustainability claims. Consumer skepticism can have adverse effects on company image and performance. Therefore, for the success of a company's sustainability campaign, it is essential that they are familiar with the factors resulting in consumer skepticism. This research has investigated these factors. Through a survey-based approach and analysis using structural equation modeling, it has been found that a main cause of consumer skepticism is previous incidents of greenwashing. Furthermore, consumers are more skeptical of large companies than smaller companies. The research also indicates that consumer skepticism towards a company is industry-specific, with the oil industry being the least trusted. The effect of demographics was also studied, finding that women are more skeptical. Contrary to previous literature, collectivist cultures were found to be more skeptical than individualistic cultures. This research has also explored consumer perspectives towards silent sustainability, finding that highly skeptical consumers prefer companies to limit their sustainability advertisements. Companies silent about their sustainability invoke less consumer skepticism than those advertising sustainability. This research has filled major research gaps in the field of consumer skepticism and silent sustainability and carries important implications for companies advertising in today's market, as well as for policy makers.

Circular Economy (CE) has been one of the most transformational tendencies for the past years. What seemed to be one more organizational hype, is now appearing as a global trend, affecting macro, meso and microenvironments, ranging from governments, global organizations (such as the UN), the whole private sector, science, to final consumers and individuals. Despite the numerous CE definitions, a common sense regarding what CE means is still subject of studies. This opens space for misinterpretation and misuse, as well as greenwashing and image depreciation risks. Consequently, some organizations tend to shape CE to their own definitions and paradigms rather than changing their businesses. This article builds on previous work and aims to establish a common-sense CE definition, separating it from its enablers and related concepts, which seem to be the root causes of misuse. We asked 44 worldwide CE experts PhDs the same question: “Using your own words, please describe what you understand by “Circular Economy”. Database was compiled and analysed through a coded framework and triangulated with the support of R statistical tool. The main outcome is a final definition proposal, along with a structured CE framework. It is expected this research will provide resources to allow standards organizations to establish formal cross-industry CE policies and regulations, leading to scales, targets, KPI's development for CE assessments and audits; and guide organizations and governments on their CE transition roadmaps.

Petroleum-based plastics have come under a lot of scrutiny in the past decade owing to the properties that made them ubiquitous items; their durability and expendability. The exploitation of such features during the industrial era has now culminated into the major environmental issue of plastic pollution. As a means of mitigating this issue, bioplastics are being considered as an environment-friendly alternative. However, not all materials under this category are the same and this has caused many misconceptions about the commodity and its after-life processing, which has led to false advertising and consumer indifference. Proper disposal and sorting procedures required for many of these bioplastics are not well known, which affects their optimum degradation. This review aims to: (i) outline the production and properties of the most prominent bioplastics along with their impacts on the environment and the economy, (ii) discuss the differences between biodegradable and compostable materials, (iii) explore the basic differences in the disposal of bioplastics compared to conventional plastics, and (iv) enumerate the future directions that can help them become a ubiquitous commodity. Proper knowledge of the various bioplastics and the implementation of proper disposal methodologies may alleviate health as well as environmental impacts of plastics and reduce plastic pollution.

The creation of a market for steel produced by less carbon-intensive production processes, here called ‘green steel’, has been identified as a means of supporting the introduction of breakthrough emission reduction technologies into steel production. However, numerous details remain under-explored, including exactly what ‘green’ entails in the context of steelmaking, the likely competitiveness of green steel products in domestic and international markets, and potential policy mechanisms to support their successful market penetration. This paper addresses this gap through qualitative research with international sustainability experts and commercial managers from leading steel trade associations, research institutes and steelmakers. We find that there is a need to establish a common understanding of what ‘greenness’ means in the steelmaking context, and to resolve various carbon accounting and assurance issues, which otherwise have the potential to lead to perverse outcomes and opportunities for greenwashing. We identify a set of potential demand-side and supply-side policy mechanisms to support green steel production, and highlight a need for a combination of policies to ensure successful market development and avoid unintended consequences for competition at three different levels: 1) between products manufactured through a primary vs secondary steelmaking route, 2) between ‘green’ and traditional, ‘brown’ steel, and 3) with other substitutable materials. The study further shows that the automotive industry is a likely candidate for green steel demand, where a market could be supported by price premiums paid by willing consumers, such as those of high-end luxury and heavy-duty vehicles.

Investors increasingly demand that asset managers measure the non-financial performance of their investment portfolios. Amidst concerns of greenwashing, reliable sustainability assessment methods are needed to ensure that funds are channeled towards priority sectors for the transition to a low-carbon and more inclusive economy. This critical review provides a classification, analysis and evaluation of current sustainability measurement methods for investment funds from both industry and academia. The evaluation is based on a seven-criteria matrix, developed based on gaps identified in seminal academic works and in reports from international organizations. Following the evaluation, we find that carbon footprints and exposure metrics and environmental, social and governance (ESG) ratings, while widely used, have several shortcomings, failing to capture the real-world sustainability impact of investments. We suggest that open-source, science-based and sustainability-driven assessment methods are prioritized going forward. Methods can be upgraded by incorporating measurement of positive impact creation and by adopting a life cycle perspective. Given the need to anchor sustainability assessments in the reality, the compatibility of investment products with science-based targets for sustainable development should become a central element of reporting requirements. Finally, methods incorporating a forward-looking perspective, as well as an assessment of investor's additionality are scarce and should be given priority in future research.

Voluntary environmental certifications can be considered as firms’ strategic responses to institutional market and non-market pressures to reduce the impact of business activities on natural environment, and also as a means to legitimate the firm in the eyes of the society and the stakeholders in general, by fitting environmental behaviour to competitive dynamics and strategic choices. Among these certifications, the ISO 14001 is considered as the most widespread environmental management system (EMS) certification. Nevertheless, ISO 14001 cannot disguise the fact that these certifications could be used as a symbolic environmental commitment. In our research, we examine the potential existence of symbolic corporate environmental certification phenomenon, as well as its key antecedents and consequences on firm performance. The proposed hypotheses are tested through a logistic regression and a multiple linear regression on a sample of 157 firms that belong to the Spanish metal production and transformation industry with 100 or more employees. As a result, we found four unexplored antecedents of symbolic corporate environmental certification. While industry technological dynamism and lead cost competitive strategy are negatively related to symbolic corporate environmental certification, certification maturity and product differentiation competitive strategy are positively linked. In addition, contrary to our expectations, the relationship between symbolic corporate certification and firm performance, although present, is not statistically significant. In sum, our research contributes to shed light to the scarcely explored phenomenon of Symbolic Corporate Environmental Certification highlighting its importance in terms of industrial analysis, competitive strategy and timing of adoption, as well as its consequences on firm performance.

The United States military is treating climate change as a crucial factor in its preparation for future conflicts. This concern manifests not only in strategic planning and forward-looking documents, but also in building infrastructural capacity and material provision. Yet, the impetus to ‘green’ the military goes beyond the deployment of existing technologies. We examine several facets of the military's role as an environmental actor, particularly through its promotion of the US Navy's ‘Great Green Fleet’ (GGF), which actively supports the development of advanced biofuels by subsidizing their development and facilitating wider marketization. The GGF promises to reduce military reliance on conventional fossil fuels and reconfigure its energy sourcing, thus reducing dependence on imported hydrocarbons; this is with an eye towards ultimately severing the logistical relationship between existing energy infrastructures and the spaces of military intervention. Taking an integrated lens of political ecology and geopolitics - ‘geopolitical ecology’ - we seek to provide an understanding of the production of weaponized nature. We demonstrate that the US military's discursive use of climate change to justify the provision of new military hardware and advanced biofuels promotes a vision of resource conflicts to support the development of technologies to overcome the constraints to delivery of fuel to emergent front lines. We argue that while this may appear to be militarized greenwashing, it signals a shift in the logics and practices of fuel sourcing driven by a dystopian vision of climate change, which the US military played a significant role in creating.

Buying firms are increasingly confronted with compliance scandals in their upstream supply chain, for which they are held accountable by their stakeholders. Purely symbolic practices, typically referred to as greenwashing, as well as substantive practices, such as green supplier championing, are thus receiving widespread attention in business practices and academia alike. In this study, we reveal the impact of two opposing leadership dimensions following the concepts of ethical and transactional leadership as antecedents for green supplier championing and greenwashing. We particularly address whether these antecedents have a complementary or a counterproductive effect on green supplier championing and greenwashing. Furthermore, we investigate the complementary impact of incentives and the two leadership styles on achieving sustainability behavior. The resulting model is tested using a path analysis based on a data set of 118 firms located in Germany. We find support for the positive impact of ethical leadership on green supplier championing but also a non-significant negative impact on greenwashing. Greenwashing is significantly impacted by leadership styles reflecting obedience to authority, and further moderated by ethical incentives. Interestingly, ethical incentives do not moderate the impact of ethical leadership on green supplier championing. Finally, we discuss implications for theory and business practice.

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 greenwash behaviours. We propose a novel measure of greenwashing and investigate its determinants and consequences for US firms. We find that companies with larger boards are less prone to greenwashing. Board independence is positively associated with greenwash behaviours, while the percentage of women in the board has no detectable impact. Finally, we show that greenwashing reduces firm value.

Perception regarding a focal firm's corporate social responsibility (CSR) depends not only on itself but also on its known suppliers. This paper provides the first empirical evidence linking CSR and supply chain information disclosure together. We uncover robust evidence that listed firms voluntarily disclose environmentally responsible suppliers while selectively not disclosing ”bad" ones, effectively greenwashing their supply chain image. This selective disclosure of green suppliers is prevalent among listed firms across the world. Such corporate behavior is increasing in public awareness of climate change, decreasing in regulations on CSR information transparency. It is more salient for firms who face higher competition or care more about their brand awareness, and for firms that are more profit-driven or held more by institutional investors. Firms that greenwash supply chains observe an increase in sales and valuation, suggesting that consumers and investors do not fully take greenwashing of listed firms into account.

The market for green bonds has grown rapidly in recent years. This has resulted in increased attention on legal and policy issues associated with green bonds. These issues are the focus of this article. The article first describes key aspects of the green bond market including the nature and role of green bonds. It then discusses the main features of green bonds and the green bond market, including their benefits, cost and the role of green bond standards. The final section of the article examines selected issues, including various aspects relating to ‘greenwashing’ – the practice of falsely attributing environmentally positive credentials to a bond claimed to be ‘green’. Other issues discussed include pressures to relax green bond standards arising from demand for green bonds outstripping supply, and the position applying in cases of ‘green defaults’ – where the green promises made in relation to a bond are not fulfilled.

Sadly, not much. This paper provides a theoretical and empirical analysis of the greenium, the price premium the investor pays for green bonds over conventional bonds. We explain in simple economic terms why the price premium of a green bond essentially represents a combination of the non-pecuniary environmental benefit of the bond, as perceived by the investor, and the effective cost of issuing it, as measured by the additional issuing costs of the bond netted off a range of monetary and non-monetary benefits associated with the issuance. Our empirical model decomposes the greenium into a time-varying market component which is common to all green bonds and an idiosyncratic component which is specific to a certain green bond itself. Using a global green bond dataset larger than any previous studies, we find that the greenium on average amounts to, sadly, just over one basis point. However, it can vary quite significantly among individual green bonds and our result suggests that a key factor underlying the variation is that they are subject to the risk of greenwashing to different extents.

The European Commission has significantly increased its ambitions in regulating sustainable finance with its 2018 Action Plan “Financing sustainable growth”. One of the proposed Regulations, which has been adopted in 2020, is the Taxonomy Regulation. It builds the core of the action plan, by providing definitions to determine whether an economic activity is environmentally sustainable and therefore suitable for a sustainable investment. While most stakeholders agree that the lack of common definitions poses several difficulties and hampers the progress on sustainable finance, the solution found in the form of the Taxonomy Regulation is not uncontested. Concerns include its usability, especially in light of the available data and the accompanying costs, and the need for a more conclusive taxonomy, which also covers less and non-sustainable economic activities. This paper briefly outlines the structure of the Taxonomy Regulation itself, highlights the main points of debate and recent developments and suggests some adjustments, in particular the need for an extension of the Taxonomy in order to prevent “greenwashing”.

Financial markets are fundamental to a successful transition to sustainable market activity. Addressing unsustainable financial practices is vital to realizing the EU’s commitments on sustainability, as expressed for instance in the European Green Deal of December 2019. Yet, investments in unsustainable projects – routinely funded by large EU banks – have not been addressed sufficiently by EU financial regulators, in spite of the introduction of the EU Sustainable Finance Initiative (SFI) in 2018. The SFI lacks a systematic integration of sustainability factors in the actions proposed, limiting focus on selected environmental issues, especially climate change. It also relies too much on the existing incentive structures for private actors in financial markets. Such reliance is unlikely to deliver sufficient sustainable investments. On the other hand, the EU has made considerable progress regarding to prevent ‘greenwashing’ of financial products, and the development of consultative processes and expert groups speaks of a genuine commitment to deliver, which may be realized in the present EU Parliament and Commission. However, the legitimacy and effectiveness of this EU action needs to be assured, and there is a danger the SFI will not achieve its goals, due to limitations in the proposals under it. In this Report the SMART Project presents its analysis and reform proposals on regulation governing the funding of investments both in the EU and between the EU and third countries. The regulation discussed concentrates firstly on the banking system, including central banks and private banks but also private and public institutional investors, as much of the short-term and narrow pressure for maximization of returns to investors comes from the investment supply chains of financial markets and institutional investors. The SMART Project also proposes revision of the European Central Bank mandate and operations, guidelines for bank risk assessment, and regulation of banks. Secondly, the SMART Project proposes broadening and strengthening the SFI with proposals of amendments in the recent Taxonomy, Disclosure and Benchmarks Regulations to cover all economic activities and financial instruments and all market actors, both public and private, obliging them take into consideration sustainability in their investment decisions as well as benchmarks provided by index and benchmarks providers. In the final part of the Report the increased focus on foreign investments outside the EU is discussed.

The United Nations Principles for Responsible Investment (PRI) is the largest global ESG initiative in the asset management industry to date. We analyze what happens after active US mutual funds sign the PRI, to assess whether they exhibit ESG implementation. We find that PRI signatories attract a large fund inflow but we do not observe improvements in fund-level ESG scores or fund returns. We consider a battery of ways to proxy for funds’ ESG incorporation (e.g., entry/exit, screening, engagement, voting for pro-ESG proposals), but fail to observe evidence of meaningful follow-through, on average. Next, we explore cross-sectional fund characteristics and find that only quant-funds exhibit small improvement in ESG performance versus other funds, mainly through buying high-ESG-performing stocks. Furthermore, we note that PRI signatories are not superior performers in ESG issues prior to signing, relative to non-PRI funds, but PRI affiliation tends to be widely advertised on company websites, marketing materials, and fund documents. Overall, a reasonable reader may perceive our findings as consistent with PRI funds’ greenwashing. We note, however, that what we uncover is based only on outcome-based measures and may miss some actual efforts of signatories.

We use a unique database that includes selective environmental disclosures to examine the impact of economic policy uncertainty on corporate greenwashing in the US. Our results suggest that during periods of heightened EPU firms reduce their greenwashing, as they appear to disclose more information that is important rather than benign with respect to their environmental performance. We further validate this new evidence by showing that, in response to increased political uncertainty around gubernatorial elections, firms engage in more substantive rather than symbolic environmental disclosures. In addition, our cross-sectional analyses show that the relation between EPU and greenwashing varies with the extent of an industry’s political sensitivity, intensity of industry competition, firm age, financial constraints, and information quality. Our novel evidence survives extensive robustness tests. Overall, our study suggests that uncertainty over government policies reduces firms’ incentives to engage in deceptive environmental reporting.

I construct a neoclassical model of investment for a firm that greenwashes its commitment to corporate social responsibility in exaggerating its minimization of using polluting inputs and maximizing its investment in social capital. I assume that greenwashing allows the firm some pricing power in its output market, but in tradeoff, it results in a dead weight loss due to the risk of being caught greenwashing that acts as a negative call option on the increased value of the firm. I find that there are limited circumstances where greenwashing pays off for the firm: when firm volatility is low, when the time till they expect to be caught is short, when interest rates are high and when their pricing power is high. As a result, without government intervention, the circumstances that favor greenwashing are very limited.

The green antitrust movement aims to increase sustainability efforts by allowing restrictions of competition. Yet the economic evidence so far points to more, not less, competition as the right stimulus for inducing sustainability efforts. Incentives to produce more sustainably are stronger when firms compete than when they are allowed to make sustainability agreements. This is also true when firms are intrinsically motivated to promote sustainability. It is not good policy to relax the general competition rules in order to accommodate the rare genuine sustainability agreement. However well-intended, green antitrust risks damaging both competition and the environment. It will suppress the gathering market forces for companies to produce more sustainably, overburden competition authorities, invite abusive cartel greenwashing, and give the part of government that should promote sustainability further excuse to shun their responsibility for designing proper regulation.

Much has been said and written about the ‘fiscal behaviour’ of multinationals. A tax code of conduct is often mentioned as a 'catch-all solution' for stimulating 'acceptable fiscal behaviour'. Stakeholders increasingly demand fiscal accountability to obtain verifiable and validated credible tax information. A tax code of conduct without a proper public reporting strategy will not build trust with stakeholders as it cannot offer the necessary guarantees that the (guiding) principles as prescribed are indeed followed. Credibility is created through accountability. Accountability can only be provided through transparency: showing how a corporate fiscal policy has translated itself into effective actions that have been monitored by the company or external auditors. A Tax code of conduct without a reporting obligation will not provide confidence to stakeholders like investors and civil society. A serious tax transparency strategy will and moreover contribute to combat 'greenwashing'. We address existing Tax Codes of Conduct, company examples and the new global tax reporting standard GRI 207: Tax 2019.

Purpose The purpose of this paper is to analyse the concepts of sustainability, responsibility and ethics focussing on their links and differences, also to understand how companies move respectively in these field; to understand how companies sometimes move away from the basic and deep meaning of these concepts, landing in a merely utilitarian sphere of personal advantage where ethics, instead of being an irreplaceable and essential stronghold, is found to be a fiction or just an instrument. Design/methodology/approach The methodology used assumes a theoretical critical approach and, based on the vast literature on the items, is based on a conceptual analysis of the themes of sustainability, corporate social responsibility (CSR) and ethics and of the behaviour that companies can adopt in the three contexts. A critical approach to these issues and concepts can effectively help us to understand how companies are responding to external demands and to the challenges of responsibility and sustainability, which are becoming increasingly pressing. Findings Ethics, sustainability, CSR and social and environmental reporting are distinct constructs with different meanings but linked by important conceptual and operational relationships. Research limitations/implications The results of the research are the consequence of the application of a critical approach based on a theoretical analysis of the concepts under study. It would be interesting to support the results achieved with empirical research studies. Practical implications This conceptual path helps scholars and companies themselves to understand the difference between the three key concepts analysed. Only by understanding the basic meaning will it be possible to really make one’s own and pursue it in the correct way. Social implications Nowadays, the authors are overwhelmed by these three concepts which are used as synonyms and incorrectly. This leads to confusion and misunderstandings. Knowledge of the characteristics and differences between these concepts and their concrete applications is of great importance. Originality/value This study tries to provide a critical discussion of how the three concepts intersect and differentiate, leading to concrete results or results that have nothing to do with their meaning. There are no conceptual papers in the literature that deal with the three concepts and also analyse the implications on the real world.

We find that a non-trivial number of hedge funds that endorse the United Nations Principles for Responsible Investment indulge in greenwashing. Hedge funds that greenwash underperform both genuinely green and nongreen funds after adjusting for risk. Consistent with an agency explanation, greenwashers (i) underperform more when incentive alignment is poor, (ii) trigger more regulatory violations, and (iii) report more suspicious returns. By exploiting regulatory reforms that aim to enhance stewardship and curb greenwashing, we provide causal evidence that relates agency problems to greenwashing and fund underperformance. Investors, however, do not appear to discriminate between greenwashers and genuinely green funds.