The impact of climate policy uncertainty on corporate ESG greenwashing

Amid the escalating global climate risks, governments worldwide seek to steer corporate ESG transformations through climate policies. However, the frequent introduction of such policies may inadvertently heighten policy uncertainty, exacerbating corporate ESG greenwashing. This research, using a sample of A-share listed corporate entities from 2009 to 2022, theoretically analyzes and empirically investigates the impact of climate policy uncertainty on corporate ESG greenwashing and its underlying mechanisms. The findings indicate that climate policy uncertainty indeed intensifies corporate ESG greenwashing, a conclusion that holds even after a series of robustness tests, including endogeneity checks and machine learning model re-specifications. Mechanism tests reveal that climate policy uncertainty exacerbates ESG greenwashing through two pathways: information disclosure manipulation and discrepancies in rating systems. Heterogeneity analysis further suggests that the effect is particularly pronounced in small-scale, state-owned, non-high-tech, and non-heavy-pollution corporate entities.