Investigation of the impacts of perceived greenwashing on employee loyalty: the mediating role of guilt and frustration

Purpose Studies on corporate greenwashing have grown significantly in recent years. However, much of the literature addresses greenwashing’s effects on external stakeholders. This study aims to investigate how deceptive environmental practices affect employee loyalty, with guilt and frustration as mediating variables. Design/methodology/approach The research hypotheses were first developed from a thorough review of the relevant literature under social identity, moral identity, cognitive dissonance, and social exchange theories. The questionnaire was developed and used to collect opinions from Vietnamese construction practitioners. The collected data were analyzed using PLS-SEM. Findings The findings showed a negative relationship between perceived greenwashing and employee loyalty (β = −0.194). Moreover, the negative relationships between employee guilt and employee loyalty (β = −0.277), employee frustration and employee loyalty (β = −0.186) were confirmed. In contrast, the positive relationships between perceived greenwashing and employee guilt (β = 0.486), perceived greenwashing and employee frustration (β = 0.460) were validated. Originality/value This study is original in examining the dual emotional mediators of guilt and frustration between perceived greenwashing and employee loyalty. It extends understanding of the internal consequences of greenwashing within the Vietnamese construction sector. The research highlights employees’ psychological reactions as key mechanisms shaping loyalty. It also provides actionable insights for managers and policymakers to promote authentic sustainability practices.