IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i13p5744-d1684840.html
   My bibliography  Save this article

ESG Carbonwashing: A New Type of ESG-Washing

Author

Listed:
  • Yuting Wang

    (College of Economics and Management, Nanjing Forestry University, No. 159 Longpan Road, Xuanwu District, Nanjing 210037, China)

  • Zhuangzhuang Niu

    (College of Economics and Management, Nanjing Forestry University, No. 159 Longpan Road, Xuanwu District, Nanjing 210037, China)

  • Wei Zhong

    (Business School, Yangzhou University, No. 196 Huayang West Road, Yangzhou 225009, China)

  • Ma Zhong

    (College of Economics and Management, Nanjing Forestry University, No. 159 Longpan Road, Xuanwu District, Nanjing 210037, China)

Abstract

In 2020, the Chinese government announced the “Dual Carbon” goals, making carbon responsibility the most prominent focus within the Environmental, Social, and Governance (ESG) practices of Chinese firms. This shift creates a new type of ESG-washing, a practice involving the selective disclosure of information that portrays the firm in a favorable light, thereby leading stakeholders to overestimate its ESG performance. In this study, we define a novel type of ESG-washing behavior called “ESG carbonwashing”, in which firms disproportionately highlight their carbon responsibility initiatives while overlooking other dimensions of ESG. By adopting a strategy of excessively emphasizing their carbon-related efforts in ESG activities, these firms mislead stakeholders about their overall ESG performance. Using a sample of 59 high-carbon-emitting firms listed on the Shanghai and Shenzhen A-share markets from 2018 to 2022, we construct a systematic framework to measure the extent of ESG carbonwashing and further analyze its temporal and industry-level variations. Our key findings indicate that: (1) ESG carbonwashing has significantly increased alongside the rollout of the “Dual Carbon” policy; (2) there are significant inter-industry differences, with the steel and aviation sectors exhibiting the highest levels of ESG carbonwashing, while the building materials industry shows the lowest. This study offers valuable guidance for ESG information users in detecting and mitigating carbonwashing practices, while also providing robust empirical support for refining relevant regulatory frameworks.

Suggested Citation

  • Yuting Wang & Zhuangzhuang Niu & Wei Zhong & Ma Zhong, 2025. "ESG Carbonwashing: A New Type of ESG-Washing," Sustainability, MDPI, vol. 17(13), pages 1-21, June.
  • Handle: RePEc:gam:jsusta:v:17:y:2025:i:13:p:5744-:d:1684840
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/13/5744/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2071-1050/17/13/5744/
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:17:y:2025:i:13:p:5744-:d:1684840. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.