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Green Washing in Supply Chains?

55 Pages Posted: 13 May 2023 Last revised: 7 Apr 2025

See all articles by Swarnodeep Homroy

Swarnodeep Homroy

University of Groningen; University of Southampton

Asad Rauf

University of Groningen, Faculty of Economics and Business, Students

Date Written: April 4, 2024

Abstract

We show that suppliers adopt climate and governance policies following their customers’ emission-reduction commitments. These spillovers reflect bargaining dynamics rather than supply chain reconfiguration. Policy adoption translates into real abatement, through capital investment and green innovation, only when suppliers have high gross margins. The results highlight how economic frictions shape the link between climate commitments and outcomes, and suggest that stronger commercial terms can help close this gap and limit greenwashing.

Keywords: Corporate Emissions, Climate Governance, Supply Chain Networks

JEL Classification: F18, F64, G34, G38, L16, L24, Q54

Suggested Citation

Homroy, Swarnodeep and Rauf, Asad, Green Washing in Supply Chains? (April 4, 2024). Available at SSRN: https://ssrn.com/abstract=4446166 or http://dx.doi.org/10.2139/ssrn.4446166

Swarnodeep Homroy

University of Groningen ( email )

Nettlebosje 2
Department of Economics, Econometrics and Finance
Groningen, Groningen 9747 AE
Netherlands

University of Southampton ( email )

Southampton Business School
Southampton
United Kingdom

Asad Rauf (Contact Author)

University of Groningen, Faculty of Economics and Business, Students ( email )

Nettelbosje 2
Duisenburg Building, 8th Floor
Groningen, Groningen 9747AE
Netherlands

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