Greenwashing in business: a framework-based review of economic, governance, and market outcomes

Greenwashing undermines stakeholder trust and weakens sustainability governance by distorting the information infrastructure relied upon by consumers, investors, and policy actors. This constrains system-scale transformations toward responsible consumption and production, which is central to the United Nations Sustainable Development Goal (SDG) 12. This study conducts a PRISMA-guided systematic literature review and synthesizes extant research using the Theory–Context–Characteristics–Methodology (TCCM) framework to examine how greenwashing persists across societal systems. The review shows that fragmented sustainability taxonomies, discretionary assurance regimes, symbolic ESG disclosures, and strategic communication practices collectively sustain structural gaps between the visibility and verifiability of sustainability claims. Drawing on institutional, signaling stakeholder, and constructivist perspectives, the analysis explains how governance incentives, disclosure architectures, and stakeholder sensemaking processes interact to normalize symbolic compliance, thereby weakening accountability, transparency, and institutional trust, which are central to effective sustainability governance (SDG 16). The study further identifies verification as an under-examined mechanism shaping sustainability communication and trust . Evidence demonstrates that greenwashing generates reputational spillovers and systemic market responses that affect consumption patterns, capital allocation, and transition pathways relevant to inclusive economic development (SDG 8). This review advances the governance–behavior–trust–verification (G-B-T-V) framework that informs future empirical research, policy design, and transdisciplinary interventions.