When Environmental Claims are Empty Promises: How Greenwashing Affects Corporate Reputation and Credibility

Abstract

ABSTRACT This article examines mechanisms and effects of greenwashing on corporate reputation and credibility. We define greenwashing as the perception of a discrepancy between what an organization claims to do in terms of protecting the environment and what the organization actually does in this respect. In two experiments, we vary a company’s promises of green engagement. Afterward, participants are confronted with the company’s actual green engagement. The studies show that if a company claims to be green, its reputation and credibility are assessed more positively. However, the experiments also demonstrate that false green promises backfire: If the green promises are not kept, participants assess the company’s reputation and credibility more negatively as opposed to a group that evaluates a company without any false promises. Furthermore, both experiments provide insight into the underlying mechanisms responsible for these effects: Participants’ expectations are violated which leads to a perception of greenwashing and, in turn, worsens the perception of the company’s reputation and credibility.