Corporate Social Responsibility in Supply Chain: Green or Greenwashing?

44 Pages Posted: 12 Oct 2020

See all articles by Yilin Shi

Yilin Shi

Shanghai Jiao Tong University

Jing Wu

The Chinese University of Hong Kong (CUHK) - CUHK Business School

Yu Zhang

Peking University - Guanghua School of Management

Date Written: July 25, 2020

Abstract

Perception regarding a focal firm's corporate social responsibility (CSR) depends not only on itself but also on its known suppliers. This paper provides the first empirical evidence linking CSR and supply chain information disclosure together. Specifically, it uncovers robust evidence that firms greenwash their CSR image via voluntarily disclosing environmentally responsible suppliers while concealing ``bad" ones. Exogenous variations in abnormal temperatures around the world drive variations in the selective disclosure of ``good" suppliers, supporting a causal interpretation of our finding. Supply chain greenwashing is more prevalent for firms who face higher competition, care more about their brand awareness, and for firms that are more profit-driven and held more by institutional investors. The greenwashing behavior mitigates after implementing mandatory CSR disclosure policies. Finally, firms who greenwash supply chains observe both sales and profitability increase, but only for the short-term.

Keywords: Supply Chain, Corporate Social Responsibility, Greenwashing, Selective Disclosure

JEL Classification: F30, F36, G23, G30, G38, G34, M14, Q50

Suggested Citation

Shi, Yilin and Wu, Jing and Zhang, Yu, Corporate Social Responsibility in Supply Chain: Green or Greenwashing? (July 25, 2020). Available at SSRN: https://ssrn.com/abstract=3700310 or http://dx.doi.org/10.2139/ssrn.3700310

Yilin Shi

Shanghai Jiao Tong University ( email )

Antai College of Economics and Management
Shanghai, Shanghai 200030
China

Jing Wu (Contact Author)

The Chinese University of Hong Kong (CUHK) - CUHK Business School ( email )

Cheng Yu Tung Building
12 Chak Cheung Street
Shatin, N.T.
Hong Kong

HOME PAGE: http://www.jingwulab.org

Yu Zhang

Peking University - Guanghua School of Management ( email )

Peking University
Beijing, Beijing 100871
China

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