China’s green watch program: beyond greenwashing

Abstract

Purpose This paper aims to provide a more inclusive perspective on corporate greenwashing. Major ideas from impression management and transaction cost theory (TCT) helped in evaluating the likelihood of greenwashing within the Chinese context. Design/methodology/approach The sample consists of 184 Chinese public companies – 104 participating and 80 not participating in China’s green watch (GW) program. Using logistic regression, the analysis illustrates the importance of impression management and TCT as indicators of GW participation. Findings GW participation reduced the likelihood of GW firms joining substantive codes of conduct outside the GW program, indicating an important role of impression management and power relationships; a higher level of firm risk is associated with greater GW participation, signaling a higher level of risk tolerance; and higher levels of asset intensity increase the likelihood of GW participation, indicating a TCT connection. Research limitations/implications These findings present a strong case for going beyond greenwashing and further exploring the organizations’ multiple motives for sustainability. They “force” the authors to study impression management and greenwashing from a more “human” perspective. Practical implications Besides establishing sustainability legitimacy, substantive codes of conduct enhance a firm’s ability to attract capital – impression management behavior falls within the rules of the game to achieve legitimacy and competitive advantage. Originality/value This paper provides a complementary explanation for firms engaging in sustainability acts, beyond that offered by the greenwashing concept. It is demonstrated that firms do not necessarily desire to deceive others, but to realistically impress and influence them, most likely in pursuit of corporate objectives.