Greenwashing Red Flags

This chapter comprises two parts namely, the academic section and the practical section. The chapter begins by outlining the key terms or definitions of greenwashing activities among firms. It further synthesises the recent research trends in greenwashing incidents and issues highlighted by researchers in developed and emerging markets. The chapter also outlines the common measurements used for detecting firms’ greenwashing incidents. It then summarises the research findings derived from the reviewed articles. In the second part, this chapter sheds light on the recent greenwashing trend among green-compliant firms. The chapter explores various types of greenwashing such as: i) firms with ambiguous eco-friendly or green claims but without detailed evidence, ii) irrelevant sustainable claims, either overclaim or minimum disclosures on the environmental implications in the marketing materials, and iii) misuse of green colour labels for non-eco-friendly products in their advertisements. Each type of greenwashing incident offers real examples of deceptive practices. This chapter further investigates the reasons for the dishonest practice of conveying a false impression or the misleading information about a company’s ESG efforts. The chapter also provides the implications when companies engaged in greenwashing scandals. This chapter concludes with two mini case studies (H&M and Samsung Inc) that exposed the firms’ greenwashing activities as they integrated ESG principles.