Business Ethics and Corporate Social Responsibility

Does Greenwashing Pay Off? Understanding the Relationship Between Environmental Actions and Environmental Legitimacy

Print Share
Do firms gain environmental legitimacy when they conform with external expectations regarding the natural environment? Drawing on institutional logic and signaling theory, we investigate sources of heterogeneity in the impacts of environmental actions on environmental legitimacy. Longitudinal data (1997-2001) about 325 publicly traded U.S. firms in polluting industries support the notion that environmental actions help firms gain environmental legitimacy. However, some actions instead can harm this legitimacy if environmental performance deteriorates and the firm is subject to intense scrutiny from nongovernmental organizations. Thus, an important contribution of this research is to identify conditions under which greenwashing can backfire.
Bibliographic citation: Berrone, Pascual; Fosfuri, Andrea; Gelabert, Liliana, "Does Greenwashing Pay Off? Understanding the Relationship Between Environmental Actions and Environmental Legitimacy", Journal of Business Ethics, Vol. 144, No. 2, 2017, pp 363 - 379

Reference: 10.1007/s10551-015-2816-9 (DOI)
Date: 08/2017
Author(s): Berrone, Pascual; Fosfuri, Andrea; Gelabert, Liliana
Document type: Article in Journal (refereed)
Editor(s): Cátedra Schneider Electric de Sostenibilidad y Estrategia
Languages: English
Geographic area: United States