Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing

Reporting standard errors clustered by firm accommodates potential serial correlation within firms.

“We also reported standard errors clustered by firm to accommodate potential serial correlation within firms (Marquis, Toffel, and Zhou, 2016).”

Greater scrutiny from stakeholders and society can produce environmental disclosures that are more accurate, more substantive, or even overly modest.

“increased scrutiny by stakeholders and society at large can lead to moreaccurate (Marquis, Toffel, and Zhou, 2016), more-substantive (Marquis and Qian, 2014), or even overly modest disclosures (Kim and Lyon, 2015).”

Firms may opt to implement CSR standards in a more "symbolic" way to legitimize corporate actions, selectively disclosing positive CSR activities, without intending to materially adjust the underlying real activities.

“Firms may opt to implement CSR standards in a more “symbolic” way to legitimize corporate actions, selectively disclosing positive CSR activities, without intending to materially adjust the underlying real activities (e.g., O’Sullivan and O’Dwyer 2009; Marquis et al. 2016; Diouf and Boiral 2017).”

Some companies mask negative information about their impact or only partially disclose this information, while others intentionally mislead using false advertisements claiming environmental responsibility.

“Some companies mask negative information about their impact or only partially disclose this information (Lyon & Maxwell, 2011;Marquis et al., 2016), while others intentionally mislead using false advertisements claiming that they are environmentally responsible when, in fact, they are not (Martínez et al., 2020;Szabo & Webster, 2021).”