How to govern greenwashing behaviors in green finance products: a tripartite evolutionary game approach

Greenwashing behaviors (GWBs) in green finance products (GFPs) by enterprises seriously hinder the realization of environmental protection goals. However, methods for effectively regulating GWBs in GFPs are unclear. This study constructed a tripartite evolutionary game model to analyze the formation and governance mechanisms of GWBs in GFPs among regulatory authorities, enterprises, and investors. Subsequently, the stability equilibrium strategy and key factors influencing the system equilibrium were discussed. Several interesting conclusions were drawn. First, we demonstrated that an interdependence mechanism exists among three game agents who mutually influence each other. The larger the probability of regulatory authorities choosing active supervision and investors adopting feedback, the more enterprises are willing to carry out green projects. Second, three corresponding governance modes for GWBs were put forward following the developmental stages of GFPs. Among these, the collaboration mode is the most effective in incentivizing enterprises to implement green projects. Third, based on sensitivity simulations, the initial willingness of the tripartite stakeholders, investor feedback cost, investor compensation, the penalty for greenwashing enterprises, and the reputational benefit of enterprises are critical factors that influence evolutionary results. Finally, targeted countermeasures were provided for regulatory authorities to prevent enterprises from engaging in GWBs.