Corporate environmental, social, and governance greenwashing behavior under Central Environmental Protection Inspection: An executive attention perspective

The Central Environmental Protection Inspection (CEPI) program is an important strategic deployment of China’s reform in the field of environmental protection that has attracted the attention of academia. However, with respect to the impact of CEPI on corporate environmental, social, and governance (ESG) greenwashing (Gws) behavior, particularly from the perspective of executive attention, the specific manifestations and strategic adjustments of corporate executives remain to be explored in greater depth. Based on the panel data of A-share–listed companies in Shanghai and Shenzhen from 2013 to 2022, this paper employed the difference-in-differences model, with fixed year and industry effects, to examine the impact of CEPI on ESG Gws of enterprises. Empirically, it is found that CEPI can effectively inhibit corporate ESG Gws after one lagged period. For mechanistic analysis, financial slack (Fs) can positively moderate the effect of CEPI on corporate ESG Gws. In terms of the heterogeneity test, enterprises characterized by chief executive officer (CEO) duality, as well as those with executives possessing postgraduate education and financial backgrounds, exhibit a more pronounced effectiveness in curbing Gws practices. Moreover, further analysis revealed that high-powered CEOs are more actively utilizing Fs to cater to policy requirements. This research reveals the key factors in regulating enterprises’ environmental behaviors and curbing ESG Gws, while expanding the application scope of attention theory in enterprise management practices. It offers distinct implications for central regulators, local governments, and individual enterprises and provides new theories and ideas for the harmonious development of economies and the environment across various countries.