Beyond Green Claims: A Conceptual Framework for Understanding Greenwashing in Contemporary Business

Today, greenwashing is considered an important problem, causing loss of trust of stakeholders, organizational legitimacy, and credibility of corporate sustainability efforts. The growing number of organizations incorporating environmental, social and governance (ESG) principles and reporting on their sustainability efforts has led to growing worries about greenwashing and green washing. While the marketing, sustainability, corporate governance, and strategic management literatures have all paid attention to greenwashing, there is a lack of conceptual synthesis in the concept of the antecedents, manifestations and consequences of greenwashing in the literature. To fill this void, the present study aims to create an integrated conceptual framework to understand greenwashing in the current business context. This paper is based on an integrative narrative review of the available literature, which brings together some of the key theoretical streams, such as the Stakeholder Theory, Legitimacy Theory, Institutional Theory, Signaling Theory and Information Asymmetry Theory, to explain the organizational factors that drive greenwashing and the impacts of greenwashing on consumers, organizations and society. The conceptual structure of greenwashing as a multidimensional phenomenon is shaped by institutional pressure, stakeholder expectations, competitive dynamics, organizational characteristics, and information asymmetries and their outcomes include consumer scepticism, reduced green trust, reputational risk, and reduced progress towards sustainable development. The study also advances the research propositions and suggests future research directions to aid empirical validation of the suggested relationships. This paper brings together disparate viewpoints and perspectives to construct a cohesive conceptual model, and provides valuable practical guidance to managers, policy makers and researchers working on the promotion of transparent environmental communication and good business practice within the context of sustainability.