Greenwashing: An Emerging Challenge to Corporate Sustainability.
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Abstract
Greenwashing — the practice of overstating, fabricating, or selectively disclosing the environmental credentials of a firm, product, or service — has become one of the most persistent challenges to corporate sustainability communication. This paper presents a narrative-integrative theoretical review of greenwashing that traces its conceptual origins, maps the dominant theoretical lenses used to explain the phenomenon, synthesizes empirical evidence on its drivers and consequences, reviews emerging computational approaches to its detection, and critically compares the rapidly evolving global regulatory architecture designed to curb it. Drawing on legitimacy theory, stakeholder theory, signaling theory, and institutional theory, the paper argues that greenwashing is best understood not as an isolated act of deception but as a predictable organizational response to conflicting pressures for environmental performance and market competitiveness under conditions of information asymmetry. The review traces the historical evolution of the concept from its coinage in 1986 through its proliferation alongside the modern corporate social responsibility and ESG investment movements; it examines real-world cases spanning the automotive, aviation, fossil fuel, and financial services sectors; and it compares regulatory instruments across seven jurisdictions — the United States, the European Union, the United Kingdom, Canada, India, Australia, and Singapore. The paper concludes by identifying persistent theoretical, empirical, and regulatory gaps, discussing the practical implications for managers and policymakers, acknowledging the limitations inherent in a conceptual review, and proposing directions for future research, including cross-jurisdictional comparative studies, theoretical integration across levels of analysis, and the development of standardized, verifiable measurement instruments for greenwashing.
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