To be green or not to be: How environmental regulations shape contractor greenwashing behaviors in construction projects

Abstract

Construction activities are notorious for their negative environmental impacts. To obtain environmental legitimacy, some construction contractors tend to adopt greenwashing behaviors (GWBs). As yet, the formation mechanism of contractor GWBs is unclear, which results in tremendous pressures on government regulations. GWBs are viewed as contractors’ adaptation to the institutional environment and stem from the interactions among contractors, internal project supervisors, and external regulators. Drawing on the institutional theory, this study adopts a two-stage game theory perspective to explore these interactions and examines how environmental regulations influence the internal supervisory process and information transmission. A series of equilibriums and a validation case study of a city megaproject are presented. This study suggests that insufficient government regulation capacity triggers contractor GWBs in terms of both environmental behaviors and communication. On this basis, several governance strategies are calibrated. The results indicate that the “dishonesty list disclosure” and “unified green certification” are effective in preventing GWBs and these strategies only work with sufficient government regulation capacity. The provision of government penalties and green subsidies might not be as powerful. This study provides a theoretical basis for aligning contractor GWBs prevention strategies and sheds new light on sustainable governance in the built environment.