Quantifying firm-level greenwashing: A systematic literature review

In this systematic methodological literature review, we provide an overview, a typology, and a critical analysis of firm-level greenwashing measures derived from secondary data and utilized in empirical studies. 111 eligible studies were incorporated in this review. The high number of recently published studies in the field signals that in addition to conceptualizing greenwashing, lately there has been significant advancement in its operationalization. In slightly more than half of the cases, researchers adopt a broader perspective, with the greenwashing measure covering environmental, social, and corporate governance dimensions as well. Greenwashing measures tend to focus on two aspects of the multifaceted phenomenon: selective disclosure and decoupling. At present, measures of decoupling are more widely used than the measures of selective disclosure. Decoupling measures capture symbolic and substantive corporate actions using diverse data. Typically, the ESG disclosure score, selected ESG data points, or the content of corporate releases are used for evaluating corporate communication, while ESG ratings and selected environmental actions or performance measures are used for assessing corporate actions. Most greenwashing measures are hypothetical; researchers develop a measure which suggests possible greenwashing incidents. Although greenwashing measures based on actual incidents are scant, it might be a promising new research direction, especially when supported by artificial intelligence. The insights from this systematic literature review might serve as an input for selecting or developing the most appropriate greenwashing measurement approach in future empirical research on greenwashing.