Do environmental scores become multinational corporations' strategic "greenwashing" tool for window-dressing carbon reduction? : a cross-cultural analysis

Xuhui Peng, J. Li, Qingliang Tang, Yi-Chen Lan, X. Cui

Research output: Contribution to journalArticlepeer-review

14 Citations (Scopus)

Abstract

Owing to the urgency of the climate change crisis and the emerging greenwashing issue that companies face, greenwashing in companies' carbon reduction is exceptionally important in the progress of global carbon reduction and the achievement of the Paris Agreement goals. Therefore, this study focused on multinational corporations (MNCs) listed on the 2021 Fortune Global 500 list (2001–2020) and used institutional theory to theoretically discuss and empirically test the relationship between MNCs' environmental scores and carbon emissions/intensity, as well as the moderating effect of national culture. Our results demonstrate that the environmental scores of MNCs positively affect their carbon emissions and intensity, meaning that managers tend to use high scores to hide their poor carbon reduction, showing a typical “talk” more and “act” less (i.e., greenwashing) behavior. Meanwhile, the moderating effects of individualism, masculinity, and uncertainty avoidance were negative. These revealed that the balance of MNCs' “talk” and “act” can be influenced by the domestic national cultural characteristics. Further analysis showed that the Paris Agreement did not prevent MNCs' greenwashing in carbon reduction. Such greenwashing behavior has become even worse in societies with power distance characteristics after the Paris Agreement. To the best of our knowledge, this is the first study to investigate companies' greenwashing in terms of carbon reduction. The goal is to enhance our understanding of why and how greenwashing occurs based on the institutional theory perspective, extend the application of institutional theory, enrich the literature on companies' greenwashing and national culture, and offer insight into interdisciplinary research between national culture and green transition management. Finally, suggestions for policymakers on how to prevent MNCs' greenwashing in carbon reduction, considering national cultural influence, were provided.
Original languageEnglish
Pages (from-to)2084-2115
Number of pages32
JournalBusiness Strategy and the Environment
DOIs
Publication statusPublished - Mar 2024

Open Access - Access Right Statement

© 2023 The Authors. Business Strategy and The Environment published by ERP Environment and John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits use, distribution and reproduction in any medium, provided the original work is properly cited.

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