Beyond the green façade: building a framework to deter ESG greenwashing

This article examines the pressing issue of ESG greenwashing, where companies make superficial or misleading claims about their environmental, social, and governance performance. It explores the motivations behind greenwashing through the lens of key management theories, including stakeholder theory, legitimacy theory, institutional theory, signaling theory, agency theory, the decoupling view, and transaction cost economics theory. The article identifies a diverse array of deterrents to prevent greenwashing, including regulatory measures, technological advancements, standardization, third-party verification, and stakeholder engagement. It also highlights the potential synergies among these deterrents, proposing a holistic framework to counteract greenwashing. The article concludes by discussing the academic and practical implications of the proposed framework, suggesting that future research should empirically test the effectiveness of these deterrents and their synergies. By integrating multiple theoretical perspectives and proposing a comprehensive framework, this article offers a novel and insightful approach to understanding and preventing ESG greenwashing.