Who is lifting the green veil? Climate physical risks and supply chain spillovers of corporate carbon greenwashing

Against the backdrop of intensifying global climate change, corporate greenwashing behavior is attracting widespread attention from regulators and academia. This paper investigates whether the climate physical risk faced by a customer is transmitted through the supply chain, influencing the supplier's selective disclosure of carbon information. Using a sample of Chinese A-share listed companies from 2008 to 2023, we find a significant result: Suppliers exhibit a markedly reduced level of carbon greenwashing when their principal customers are exposed to more severe climate physical risks. Mechanism analysis suggests that this inhibitory effect primarily operates through increased scrutiny on carbon reduction verification and a decline in the supplier management's future expectations. Furthermore, this effect is stronger under specific conditions: when customer concentration is higher, the customer's digital technology level is more advanced, and the supplier's financial flexibility is poorer. Collectively, these findings not only provide new evidence on the cross-firm transmission mechanism of climate risk but also offer important micro-level implications for achieving global climate governance goals.