Road to glory or highway to hell? Uncovering the consequences of corporate greenwashing in Latin America

Purpose The purpose of this paper is to investigate the effect of corporate greenwashing on the reputation, innovation and market value of companies in Latin America. Design/methodology/approach To achieve the research purpose, the authors examined the greenwashing of 428 companies based in 14 Latin American countries and selected three organizational factors: corporate reputation, innovation capacity and market value. To analyze the collected data, the authors combined a symmetric technique (panel data analysis) with an asymmetric technique (fuzzy set qualitative comparative analysis) to give greater robustness to the findings. Findings The findings revealed that greenwashing practices affect the corporate reputation, innovation capacity and market value of companies. More specifically, companies that commit more greenwashing practices tend to have a higher reputation, make more investments in research and development, as well as a higher market value. The findings can be useful for managers, investors, governments and public policymakers. Originality/value To the best of the authors’ knowledge, this is the first work that investigates the consequences of greenwashing in companies based in Latin America. The paper challenges the difficulties of measuring greenwashing by following the methodology of Ghitti et al. (2023) and finds that the consequences of greenwashing in emerging economies may be different from findings in developed economies.