Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing

46 Pages Posted: 10 May 2011 Last revised: 27 Nov 2015

Christopher Marquis

Cornell University; Harvard University - Harvard Kennedy School (HKS)

Michael W. Toffel

Harvard Business School (HBS) - Technology & Operations Management Unit

Yanhua Zhou

Harvard Business School

Date Written: November 23, 2015

Abstract

Under increased pressure to report environmental impacts, some firms selectively disclose relatively benign impacts, creating an impression of transparency while masking their true performance. We identify key company- and country-level factors that limit firms’ use of selective disclosure by intensifying scrutiny on them and by diffusing global norms to their headquarters countries. We test our hypotheses using a novel panel dataset of 4,750 public companies across many industries and headquartered in 45 countries during 2004-2007. Results show that firms that are more environmentally damaging, particularly those in countries where they are more exposed to scrutiny and global norms, are less likely to engage in selective disclosure. We discuss contributions to the literature that spans institutional theory and strategic management and to the literature on information disclosure.

Keywords: institutional theory, environmental strategy, stakeholders, information disclosure, non-market strategy

JEL Classification: D82,L15

Suggested Citation

Marquis, Christopher and Toffel, Michael W. and Zhou, Yanhua, Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing (November 23, 2015). Forthcoming in Organization Science; Harvard Business School Organizational Behavior Unit Working Paper No. 11-115; Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 11-115. Available at SSRN: https://ssrn.com/abstract=1836472 or http://dx.doi.org/10.2139/ssrn.1836472

Christopher Marquis (Contact Author)

Cornell University ( email )

363 Sage Hall
Ithaca, NY 14853
United States

HOME PAGE: http://www.chrismarquis.com

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

Michael W. Toffel

Harvard Business School (HBS) - Technology & Operations Management Unit ( email )

Boston, MA 02163
United States
617.384.8043 (Phone)

Yanhua Zhou

Harvard Business School ( email )

328A Morgan Hall
Boston, MA 02163
United States

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