Greenwashing during Uncertain Times

53 Pages Posted: 23 Mar 2021

See all articles by Najah Attig

Najah Attig

Dalhousie University

Paul Brockman

Lehigh University - College of Business

Samir Trabelsi

Brock University - Accounting

Date Written: January 21, 2020

Abstract

We use a unique database that includes selective environmental disclosures to examine the impact of economic policy uncertainty on corporate greenwashing in the US. Our results suggest that during periods of heightened EPU firms reduce their greenwashing, as they appear to disclose more information that is important rather than benign with respect to their environmental performance. We further validate this new evidence by showing that, in response to increased political uncertainty around gubernatorial elections, firms engage in more substantive rather than symbolic environmental disclosures. In addition, our cross-sectional analyses show that the relation between EPU and greenwashing varies with the extent of an industry’s political sensitivity, intensity of industry competition, firm age, financial constraints, and information quality. Our novel evidence survives extensive robustness tests. Overall, our study suggests that uncertainty over government policies reduces firms’ incentives to engage in deceptive environmental reporting.

Keywords: greenwashing; economic policy uncertainty; selective environmental disclosure; industry competition; political risk; gubernatorial elections

JEL Classification: G3, G32

Suggested Citation

Attig, Najah and Brockman, Paul and Trabelsi, Samir, Greenwashing during Uncertain Times (January 21, 2020). Available at SSRN: https://ssrn.com/abstract=3786452 or http://dx.doi.org/10.2139/ssrn.3786452

Najah Attig (Contact Author)

Dalhousie University ( email )

Rowe School of Business
6100 University Avenue
Halifax, Nova Scotia B3H 4R2
Canada
902-494-7486 (Phone)

HOME PAGE: http://scholar.google.ca/citations?user=J53887sAAAAJ&hl=en

Paul Brockman

Lehigh University - College of Business ( email )

Bethlehem, PA 18015
United States

Samir Trabelsi

Brock University - Accounting ( email )

St. Catharines, Ontario L2S 3A1
Canada

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