A Framework for Mitigating Greenwashing in Sustainability Reporting

Greenwashing in environmental, social, and governance reporting poses a significant threat to corporate accountability and stakeholder trust. This article provides a comprehensive synthesis of existing research to evaluate the role and effectiveness of sustainability assurance as a primary mechanism to combat greenwashing and proposes a framework for it. Based on a systematic literature review, this paper consolidates empirical findings indicating that sustainability assurance has a significant inhibitory effect on corporate greenwashing and is positively valued by capital markets, as evidenced by lower equity capital costs. However, the analysis also reveals that the effectiveness of assurance is not uniform; it is moderated by contextual factors such as the strength of the national legal environment and, in particular, regulatory environments, which can be exploited to legitimize overstated disclosures. This paper proposes a conceptual framework for anti-greenwashing assurance that integrates five interconnected pillars (regulatory, stakeholder engagement, third-party verification, corporate culture and internal controls, and technologies), forming a synergistic ecosystem of deterrents which collectively shape the integrity and credibility of sustainability reporting practices. To enhance the effectiveness of greenwashing mitigation, the proposed framework must be further strengthened by integrating the core principles of transparency, materiality, and verifiability across all its pillars.