Greenwash: Corporate Environmental Disclosure under Threat of Audit
AbstractWe develop an economic model of âgreenwash,â in which a firm strategically discloses environmental information and a non-governmental organization (NGO) may audit and penalize the firm for failing to fully disclose its environmental impacts. We identify conditions under which NGO punishment of greenwash backfires, inducing the firm to become less rather than more forthcoming about its environmental performance. We show that complementarities with NGO auditing may justify public policies encouraging firms to adopt environmental management systems. Mandatory disclosure rules offer the potential for better performance than NGO auditing, but the necessary penalties may be so large as to be politically unpalatable. If so, a mix of mandatory disclosure rules, NGO auditing and environmental management systems may be needed to induce full environmental disclosure.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by Wiley Blackwell in its journal Journal of Economics & Management Strategy.
Volume (Year): 20 (2011)
Issue (Month): 1 (03)
Contact details of provider:
Web page: http://www.kellogg.northwestern.edu/research/journals/JEMS/
Other versions of this item:
- Thomas P. Lyon & John W. Maxwell, 2006. "Greenwash: Corporate Environmental Disclosure under Threat of Audit," Working Papers 2006-07, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
- L0 - Industrial Organization - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lyon,Thomas P. & Maxwell,John W., 2004.
"Corporate Environmentalism and Public Policy,"
Cambridge University Press, number 9780521819473, November.
- Patten, Dennis M., 1992. "Intra-industry environmental disclosures in response to the Alaskan oil spill: A note on legitimacy theory," Accounting, Organizations and Society, Elsevier, vol. 17(5), pages 471-475, July.
- Thomas P. Lyon & John W. Maxwell, 2004.
"Astroturf: Interest Group Lobbying and Corporate Strategy,"
Journal of Economics & Management Strategy,
Wiley Blackwell, vol. 13(4), pages 561-597, December.
- Thomas P. Lyon & John W. Maxwell, 2004. "Astroturf: Interest Group Lobbying and Corporate Strategy," Working Papers 2004-18, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
- Robert Innes, 2006. "A Theory of Consumer Boycotts under Symmetric Information and Imperfect Competition," Economic Journal, Royal Economic Society, vol. 116(511), pages 355-381, 04.
- David P. Baron, 2003. "Private Politics," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(1), pages 31-66, 03.
- Mathias Dewatripont & Jean Tirole, 1994. "The prudential regulation of banks," ULB Institutional Repository 2013/9539, ULB -- Universite Libre de Bruxelles.
- Hyun Song Shin, 2003. "Disclosures and Asset Returns," Econometrica, Econometric Society, vol. 71(1), pages 105-133, January.
- Timothy J. Feddersen & Thomas W. Gilligan, 2001. "Saints and Markets: Activists and the Supply of Credence Goods," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(1), pages 149-171, 03.
- Dasgupta, Partha & Maskin, Eric, 1986. "The Existence of Equilibrium in Discontinuous Economic Games, I: Theory," Review of Economic Studies, Wiley Blackwell, vol. 53(1), pages 1-26, January.
- Tom Tietenberg, 1998. "Disclosure Strategies for Pollution Control," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 11(3), pages 587-602, April.
- Cohen, Mark A. & Vandenbergh, Michael P., 2012.
"The potential role of carbon labeling in a green economy,"
Elsevier, vol. 34(S1), pages S53-S63.
- Cohen, Mark A. & Vandenbergh, Michael P., 2012. "The Potential Role of Carbon Labeling in a Green Economy," Discussion Papers dp-12-09, Resources For the Future.
- Walls, Judith L. & Phan, Philip H. & Berrone, Pascual, 2008. "An assessment of the construct validity of environmental strategy measures," IESE Research Papers D/754, IESE Business School.
- Fabrice Etilé & Sabrina Teyssier, 2012. "Signaling Corporate Social Responsibility: Third-Party Certification vs. Brands," PSE Working Papers halshs-00736551, HAL.
- Blackman, Allen & Woodward, Richard T., 2009.
"User Financing in a National Payments for Environmental Services Program: Costa Rican Hydropower,"
dp-09-04, Resources For the Future.
- Blackman, Allen & Woodward, Richard T., 2010. "User financing in a national payments for environmental services program: Costa Rican hydropower," Ecological Economics, Elsevier, vol. 69(8), pages 1626-1638, June.
- Blackman, Allen & Woodward, Richard T., 2009. "User Financing in a National Payments for Environmental Services Program: Costa Rican Hydropower," Discussion Papers dp-09-03-efd, Resources For the Future.
- Charles H. Cho & Martin Freedman & Dennis M. Patten, 2009. "Corporate Disclosure Of Environmental Capital Expenditures: A Test Of Alternative Theories," Post-Print halshs-00459410, HAL.
- Gavronski, Iuri & Klassen, Robert D. & Vachon, Stephan & Nascimento, Luis Felipe Machado do, 2012. "A learning and knowledge approach to sustainable operations," International Journal of Production Economics, Elsevier, vol. 140(1), pages 183-192.
- repec:hal:wpaper:halshs-00736551 is not listed on IDEAS
- Christopher Marquis & Michael W. Toffel, 2011. "When Do Firms Greenwash? Corporate Visibility, Civil Society Scrutiny, and Environmental Disclosure," Harvard Business School Working Papers 11-115, Harvard Business School, revised Dec 2012.
- Matthieu Glachant & Gabrielle Moineville, 2012. "The informational role of nongovernmental organizations to induce self-regulation: Cheering the leaders or booing the laggards?," Working Papers hal-00716864, HAL.
- Markus Kitzmueller & Jay Shimshack, 2012. "Economic Perspectives on Corporate Social Responsibility," Journal of Economic Literature, American Economic Association, vol. 50(1), pages 51-84, March.
- MAHENC Philippe, 2008. "Introducing Greens Goods," LERNA Working Papers 08.03.247, LERNA, University of Toulouse.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.