Mapping the greenwashing research landscape: a theoretical and field analysis

At the core of this cluster lies the concept of symbolic management, as explored by Matejek and Gössling (2014). Symbolic management refers to the strategic use of symbols, narratives, and organizational actions to shape stakeholders’ perceptions, particularly in terms of a company’s environmental and social responsibility. In the context of greenwashing, symbolic management often manifests as companies portraying themselves as environmentally conscious through various symbolic acts or communications without taking substantive actions to support these claims. This creates a facade of environmental responsibility, potentially misleading stakeholders and the public while serving as a tool for improperly gaining legitimacy (Torelli et al. 2020). As noted in their conceptual comparison between greenwashing and “machine-washing”—that is, the unethical use of artificial intelligence to provide misleading information, conceal wrongdoings, or circumvent socio-environmental regulations—Seele and Schultz (2022) further stressed the potential (bad) implications of such novel solutions in reinforcing symbolic management practices.

Hence, the concept of legitimacy emerges as a crucial element in this cluster, closely tied to symbolic management practices and CSR communication. Within the organizational context, legitimacy refers to the perceived appropriateness and acceptability of an entity’s actions within a socially constructed system of norms, values, and beliefs. In this context, greenwashing can be seen as an attempt to manipulate perceptions of legitimacy without making substantive changes to environmentally harmful practices (Hassan et al. 2020). This theoretical link helps explain why companies might engage in greenwashing even when it poses reputational risks, as a strategy to gain, maintain, or repair their legitimacy.

Several studies have examined how companies strategically utilize symbolic management in their CSR communication to maintain legitimacy. For example, Montgomery et al. (2023) discuss ExxonMobil’s CSR communication strategies as a multifaceted example of symbolic management in the oil and gas sector. While the company prominently highlights its biofuel research in public communications, historical evidence reveals that it previously invested in commercials questioning the reality of climate change. Internal documents, however, indicated little doubt about the matter. This discrepancy between public communications and internal knowledge exemplifies a form of strategic misrepresentation to manage public perceptions and maintain legitimacy, further underscored by ExxonMobil’s simultaneous financial contributions to climate research institutions. Additionally, its messaging prominently features algae biofuels even though they are only a minor part of its operations—potentially overshadowing its primary focus on fossil fuels (Marshall et al. 2023).

Similarly, the fast fashion industry provides a compelling illustration of similar practices. H&M, a major player in this sector, has publicly committed to utilizing only recyclable or sustainable materials by 2030. This ambitious pledge can be interpreted as a strategic move to enhance the company’s legitimacy in a market increasingly concerned with environmental issues. However, the complexity and global nature of the company’s supply chain, characterized by several small-scale operations in various countries, presents substantial obstacles to the practical implementation of this pledge, as many suppliers may lack the capacity to comply with these rigorous sustainability standards (Ye et al. 2022). In the technology sector, Amazon’s pledge to achieve carbon neutrality by 2040 has attracted significant attention but also criticism. While the goal is ambitious, critics contend that Amazon’s rapid expansion, particularly in delivery services and data center operations, may exacerbate its carbon footprint in the short term. Additionally, Amazon’s support for legislators denying climate change and initiatives aimed at accelerating fossil fuel extraction further complicates its environmental narrative (Robertson et al. 2023).

Reflecting on brownwashing, Kim and Lyon (2015) pointed out similar results. Brownwashing is a deceptive communication practice that involves strategically downplaying a company’s CSR initiatives to avoid appearing overly costly or inconsistent with shareholder interests (Testa et al. 2018b). In some cases, such a strategic approach leads to the complete omission of communications related to CSR initiatives, a practice called greenhushing, such as in the case of big corporations like IKEA not disclosing the usage of certified cotton in its products (Ginder et al. 2021). This can be seen as the antithesis of greenwashing, which entails exaggerating or fabricating CSR efforts to enhance a company’s image and legitimacy in the eyes of stakeholders. This manipulation of a corporate image, aimed at maintaining or enhancing legitimacy, can be particularly deceptive because it exploits the public’s assumption that no disclosure of environmental impacts is better than manipulating CSR communication. These examples underscore the intricate and occasionally contradictory nature of corporate strategies employed to secure and sustain legitimacy through environmental commitments—sometimes selectively promoting environmentally positive initiatives, other times spreading potentially misleading information or directing long-term pledges that may conflict with short-term actions.

Understanding these dynamics also requires an examination of internal resources and capabilities, as emphasized by the resource-based view (RBV) of the firm. The RBV suggests that a company’s ability to effectively implement environmental strategies depends on its internal endowments, including tangible and intangible assets such as know-how, corporate culture, and unique capabilities (Hart and Dowell 2011). These resources determine the potential for a corporate strategy to move beyond symbolic gestures and yield genuine environmental improvements (Orazalin et al. 2023). In the context of greenwashing, the RBV provides insight into why some firms might opt for symbolic environmental management as a cost-effective alternative to genuine environmental improvements. Companies with limited resources may view symbolic gestures as sufficient for maintaining legitimacy and competitive advantage, even when they fall short of implementing substantial environmental changes. On the other hand, a “win–win” scenario can be created, where adopting proactive environmental practices not only addresses sustainability concerns but also enhances corporate effectiveness (Testa et al. 2018a). These practices can indeed lead to economic advantages such as cost reductions through more efficient resource use, decreased material waste, and energy savings. Moreover, these practices can also drive innovation, resulting in new processes, products, or technologies that strengthen the company’s competitive position or unique capabilities that are difficult for competitors to replicate.

Building on these foundations, agency theory provides crucial insights into the internal dynamics that can lead to greenwashing behaviors. This theory addresses the conflicts that may arise between corporate managers (agents) and shareholders (principals) in sustainability decision making. In the context of greenwashing or brownwashing, it is often utilized to analyze how decisions regarding sustainability are influenced by conflicts between stakeholder interests and corporate executive goals (Seele and Gatti 2017). For instance, managers might engage in greenwashing to project a positive environmental image and satisfy stakeholder demands in the short term, even if this conflicts with long-term shareholder interests or genuine environmental improvements. While primarily focused on individual-level perceptions, attribution theory has important implications at the organizational level as well, bridging the gap between corporate actions and stakeholder interpretations. It helps explain how stakeholders interpret and attribute motives to companies’ CSR efforts and environmental claims. In the absence of external information, the theory suggests, consumers are likely to attribute CSR communication to extrinsic motives, such as conforming to prevailing sustainability trends (Gosselt et al. 2019). This theoretical insight is crucial for understanding how organizational communications strategies can backfire, leading to skepticism and accusations of greenwashing.

Encompassing the rules, practices, and processes by which a company is directed and controlled, different governance and mitigation strategies can be implemented in diminishing symbolic management. First is transparency and accountability. While inconsistent CSR messages can lead to confusion and skepticism (Nyilasy et al. 2014; Parguel et al. 2011), transparency is crucial in communicating CSR endeavors (Amin et al. 2022). As Lyon and Montgomery (2015) suggest, the adoption of clear and comprehensive disclosure practices—involving the release of “hard” and verifiable information that can be reliably shared with others—can help build trust with stakeholders and reduce skepticism.

A second strategy consists of regulatory compliance and voluntary standards. Companies that voluntarily disclose detailed, verifiable CSR information are less likely to be accused of greenwashing. Moreover, the implementation of robust internal auditing processes and third-party verification of sustainability reports can further enhance credibility and ensure that reported environmental practices reflect actual performance. In this regard, the adoption of established frameworks such as supranational disclosure regulations (Fiechter et al. 2022) or accounting standards like the Global Reporting Initiative (Koseoglu et al. 2021) can further improve such perceptions. Accordingly, the clearer and more open a company is about its CSR activities, the lower the likelihood of being accused of greenwashing.

A third strategy involves internal oversight and board composition. A fundamental aspect of governance is the composition of the board of directors. For example, research has shown that the presence of women and independent directors can significantly influence the adoption of sustainable actions, thereby enhancing corporate environmental performance (Eliwa et al. 2023; Koseoglu et al. 2021). The establishment of dedicated CSR committees or compensation schemes also significantly enhances transparency and reducing agency conflicts (Fiechter et al. 2022). These governance mechanisms can help ensure that CSR initiatives are genuinely pursued, rather than merely serving as symbolic gestures. A well-structured board can align managerial actions with the long-term interests of shareholders and other stakeholders, thereby mitigating the risks of greenwashing.

A fourth strategy is mitigating greenwashing through culture and ethics. Fostering a corporate culture that prioritizes ethical behavior and sustainability can be a powerful deterrent against greenwashing (Eliwa et al. 2023). Companies that embed environmental values into their corporate culture are more likely to pursue genuine sustainability initiatives rather than resorting to symbolic management. This cultural shift can be supported by leadership commitment, ethical training programs, and incentives that reward sustainable practices (Lee and Raschke 2023).

At the core of this cluster lies the concept of decoupling, which encapsulates the idea of separating economic growth from environmental harm. Decoupling plays a pivotal role in this context, serving as a barometer for the authenticity of corporate environmental practices (Montgomery et al. 2023). It challenges companies to sustain profitability while innovating towards the reconsideration of the environmental impact of long supply chains (Lee et al. 2018a) or the adoption of circular solutions (Testa et al. 2020) to reduce their CO2 emissions and overall ecological footprint (Bryant et al. 2020).

Institutional theory also emerges as a crucial theoretical foundation in this cluster. It provides a framework for understanding how broader societal norms, regulations, and expectations shape organizational behavior regarding environmental practices (Berrone et al. 2017). This theory helps explain why companies might engage in greenwashing or adopt more genuine environmental practices based on the institutional pressures they face. These pressures—including legal, moral, and societal expectations—significantly influence corporate behavior as organizations strive to align with these norms while balancing traditional business goals with increasing environmental expectations. Simultaneously, stakeholder theory also plays a significant role in this cluster, emphasizing the importance of considering various stakeholder groups in environmental decision making and communication. This theory underscores the evolving nature of stakeholder engagement, which transcends mere information dissemination to become a more dynamic interaction where stakeholders are active participants in environmental discourse and decision making (Testa et al. 2018b; Yamoah et al. 2022). This approach promotes a more integrated perspective on corporate responsibility, highlighting the role of transparency and accountability in enhancing stakeholder trust and cooperation.

The focus on decoupling underscores the expectation that responsible businesses must move beyond compliance with current environmental policies, striving instead for continuous improvement in their environmental performance. Several studies have explored the intricate relationship between regulation and corporate behavior. An example of this phenomenon can be observed in the automotive industry, where some companies have invested in emission reduction technologies to comply with regulations while simultaneously lobbying against stricter standards, demonstrating inconsistency between their public actions and their political influence efforts (Delmas and Burbano 2011). Analyzing US publicly traded firms, Bryant et al. (2020) discussed the paradox of environmental regulatory compliance, which may be essential for environmental protection but could inadvertently jeopardize corporate ambitions by presenting additional opportunity costs that discourage efforts beyond the minimal requirements. At the same time, they found that environmental wrongdoings could be hidden behind actions that appear to go beyond compliance.

Meanwhile, there is also the realm of voluntary actions, such as achieving ISO 14001 certification related to respecting environmental management standards, which can enhance a firm’s reputation and demonstrate a commitment to environmental stewardship beyond what is legally required (Heras-Saizarbitoria et al. 2020). Other voluntary initiatives include adherence to the United Nations Global Compact or participation in disclosure programs such as the Carbon Disclosure Project. These voluntary actions can serve as credible signals of a company’s environmental commitment, potentially reducing accusations of greenwashing (Bryant et al. 2020). Several studies have thus posited that complementing formal mechanisms of enforcement with informal pressures from public and peer entities can deter or expose greenwashing.

The concept of institutional complexity is particularly relevant in this cluster. Shareholder resolutions, media scrutiny, social media exposure, industry associations, and non-governmental organizations all represent various manifestations of a rich institutional environment, which plays a pivotal role in holding firms accountable and ensuring that their policies and practices align with their professed sustainability commitments (Huang et al. 2020; Ioannou et al. 2023). For instance, environmental NGOs and activist groups are key players in exposing greenwashing and pressuring companies to improve their environmental practices (Gatti et al. 2021). By conducting independent research, publishing reports, and launching public campaigns, these groups highlight gaps between companies’ sustainability claims and their actual practices, leading to reputational risks and potential market impacts. Moreover, by leveraging social media and digital platforms, these groups mobilize public opinion, creating grassroots pressure on companies. For example, Strauß et al. (2023) found that news media act as an institutional force that shapes public opinion and sets the agenda on sustainable finance, educating the public and holding companies accountable—thereby pushing them to align more closely with their environmental commitments. Thus, underdeveloped institutional contexts may hinder environmental sustainability and promote companies’ selective discourses (Marquis et al. 2016). This is particularly evident in developing countries, where the lack of strong enforcement mechanisms and stakeholder pressure can lead to more widespread and less controlled greenwashing practices (Li et al. 2023a).

Furthermore, institutional complexity arises from the need for multinational companies to navigate different environmental regulations across various jurisdictions, often resulting in inconsistent greenwashing practices or communication (Orazalin et al. 2023). This highlights the need for a coordinated global approach to effectively curb greenwashing. Recent research has also emphasized the crucial role of national culture in shaping environmental responsibility and greenwashing behaviors (Peng et al. 2023). Indeed, cultural norms act as powerful isomorphic forces, compelling organizations to adopt similar practices and structures based on societal expectations and professional standards. This isomorphism influences corporate decision making, leadership styles, and approaches to environmental ethics. In this regard, Roulet and Touboul (2015) found that firms are more prone to greenwashing in competitive environments, while companies are more likely to take genuine environmental actions in contexts that emphasize individual responsibility. These findings suggest that in contexts where weak government intervention is favored, firms may feel compelled to fill institutional voids through substantive actions, but this tendency is counterbalanced in those environments in which competitive mindsets dominate. This interplay between cultural beliefs and regulatory frameworks underscores the complex ways in which corporate greenwashing practices are shaped across different contexts.

The evolution of stakeholder engagement from mere information dissemination to active participation in environmental discourse and decision making (Testa et al. 2018b; Yamoah et al. 2022) has profound implications for how companies address greenwashing concerns and manage their environmental communications. This shift is reflected in several regulatory and corporate initiatives. The 2017 Second Shareholder Rights Directive in the EU, for example, was designed to promote long-term shareholder engagement and transparency in corporate governance while reducing short-term risk-taking by managers (Fiechter et al. 2022). In any case, the effectiveness of stakeholder engagement varies significantly among institutional investors. Brandon et al. (2022) found that non-US investors generally achieve better portfolio sustainability scores and improve them after joining responsible investment initiatives, unlike their US counterparts, who often perform no better than non-signatories, even when they claim to fully incorporate sustainability factors. This discrepancy extends to engagement practices, with US investors showing lower levels of engagement compared to non-US investors.

Investors can employ various engagement methods to influence corporate behavior and address greenwashing (Tilba 2022). These include “internal engagement,” where investors influence corporate governance through the appointment of non-executive directors, and “direct engagement,” where large shareholders (often referred to as block-holders) exert influence over senior management. In this sense, informal, behind-closed-doors engagements by these influential investors can be particularly effective. Additionally, collaborative engagement—where multiple investors work together to exert pressure on companies—serves as a strategy to amplify investor voices, especially for smaller shareholders who may not have significant individual influence. Surprisingly, however, Li et al. (2023b) found that when large investors coordinate their actions, it can unexpectedly weaken their influence on corporate governance and increase greenwashing opportunities. This “herd behavior” often leads significant shareholders to ignore their own insights and follow other big investors, obscuring crucial information about a company’s social responsibility performance and making it easier for companies to engage in greenwashing.

As the landscape of stakeholder engagement continues to evolve, new platforms and technologies have emerged as powerful tools for communication and scrutiny. In particular, social media has become a crucial platform for stakeholder engagement, allowing for the rapid dissemination of information but also exposing companies to increased surveillance (Lyon and Montgomery 2013). Consequently, less sophisticated forms of greenwashing are declining due to increased stakeholder vigilance and the spread of new data and monitoring technologies that flatten information asymmetries. Activists now expose greenwashing through inventive methods such as online ratings and categorizing corporate misdeeds. Unilever’s experience highlights the complexities of corporate sustainability initiatives. In 1997, Unilever and WWF established the Marine Stewardship Council as an independent non-profit organization focused on safeguarding oceans through a certification program for sustainable fishing (Munasinghe et al. 2021). However, the Council faced criticism for allegedly undermining national fishery management and favoring large commercial fleets, raising concerns that it served Unilever’s market interests rather than environmental goals. Similarly, in 2013, Unilever developed a living lab in partnership with The Guardian to host a 24-h online dialogue to discuss sustainability challenges, bringing together experts, NGOs, and consumers (Bowen and Aragon-Correa 2014). However, the initiative was met with a Twitter campaign accusing the company of greenwashing (Bowen and Aragon-Correa 2014). These cases illustrate how even partnerships with respected NGOs can be perceived as self-serving rather than genuinely addressing environmental concerns.

The role of social media becomes even more critical during environmental crises, as seen in the 1989 Exxon Valdez oil spill and the 2015 Volkswagen emissions scandal. In the Exxon Valdez disaster, approximately 11 million gallons of crude oil were spilled into the sea after the tanker ran aground near Alaska, causing one of the worst human-made environmental disasters. ExxonMobil’s chairman faced widespread criticism for his delayed response, refusal to accept full responsibility, and reliance on passive communication channels like newspaper advertisements. This mishandling significantly amplified public outrage, leading to severe reputational damage, exemplified by around 40,000 customers cutting up their Exxon credit cards in protest (Gilbert et al. 2018). Similarly, when news broke that Volkswagen had been using “defeat devices” to cheat on emissions tests, the company’s initial lack of transparency and slow response amplified the scandal’s impact. The story spread rapidly across social media platforms, leading to immediate and severe reputational damage, financial consequences, and increased regulatory scrutiny for the company.

These incidents highlight how social media can significantly influence consumer concerns regarding environmental claims (Fernando et al. 2014) and reduce information asymmetry (Li et al. 2023a). Both cases underscore how ineffective stakeholder engagement during an environmental crisis can exacerbate negative outcomes, highlighting the need for prompt, transparent, and sincere communication strategies (Topal et al. 2020). They also demonstrate the evolving landscape of crisis communication—from traditional media in ExxonMobil’s case to the rapid, global reach of social media platforms in Volkswagen’s situation. These examples emphasize the critical importance of proactive and transparent stakeholder engagement, especially in the context of environmental issues or disasters. Companies must be prepared to communicate effectively and honestly, leveraging appropriate platforms to promptly address concerns while also being aware of the challenges these platforms present in managing corporate reputation and stakeholder relationships.

At the core of this cluster lies the concept of integrating sustainability into business strategy and operations. Sustainability is not merely an additional feature for organizations but is increasingly becoming central to companies’ strategic orientations. Indeed, when businesses incorporate sustainability into their core strategy, it often reflects a shift from viewing environmental and social responsibility as cost centers to seeing them as key drivers of long-term value creation (Graafland and Smid 2019). This integration challenges the traditional view of a trade-off between profitability and environmental responsibility, instead positing that these can be mutually reinforcing when properly aligned.

The theoretical perspectives that inform this shift are crucial for understanding greenwashing as a strategic phenomenon. Game theory, for example, offers a lens through which to analyze the strategic decisions that firms make regarding CSR and greenwashing. Wu et al. (2020) introduced a game theory model to differentiate between firms driven by profit and those motivated by genuine social good. Their model highlights that low transparency might lead profit-driven firms to greenwash, while high transparency encourages genuine environmental efforts but reduces extra investments as transparency further increases.

Additionally, in emerging markets where regulations are often weaker, the dynamics of greenwashing differ. Huang et al. (2020) extended the application of game theory to the context of emerging markets, where greenwashing behaviors are notably impeding sustainable progress. Their model explores the competitive pricing strategies of green incumbents (established companies that are genuinely green) and greenwashing entrants (new companies pretending to be green). They found that when the environmental efforts of an incumbent green firm and the greenwashing activities of a new entrant are both low, tolerating greenwashing can sometimes benefit the incumbent by avoiding price competition. Moreover, when the gap between actual and claimed greenness is small, greenwashing can even increase consumer surplus by easing competitive pressures. However, these benefits are context-dependent, and greenwashing is not advantageous beyond specific conditions. The study also highlights how governments in emerging markets may prefer looser enforcement of greenwashing to prioritize economic growth, explaining the prevalence of greenwashing in these regions. Understanding these conceptual foundations helps explain how companies approach sustainability and how these actions translate into various performance metrics. They also offer a framework for analyzing the potential disconnects between stated commitments and actual practices that can lead to accusations of greenwashing.

While often viewed primarily through a communicative lens, greenwashing can also be understood as a deliberate strategic choice with substantial organizational implications. This perspective extends beyond mere “cosmetic” communication, suggesting that greenwashing can drive organizations to take concrete actions in an attempt to align their reality with their public sustainability commitments. Accordingly, this section examines the conditions under which greenwashing is used strategically and the consequences it may have on a company’s market positioning.

In certain environments, particularly those with weak regulatory oversight, companies may find that engaging in greenwashing allows them to enhance their brand image and appeal to environmentally conscious consumers without fully committing to substantive sustainability practices (Berrone et al. 2017). This is particularly true in under-regulated industries where the costs of genuine sustainability initiatives outweigh perceived benefits. Delmas and Burbano (2011) provide evidence that greenwashing is more prevalent in these environments, where companies face fewer repercussions for overstating their environmental achievements. The strategic use of greenwashing is particularly effective in industries where stakeholders such as consumers and investors are distanced from the firm’s actual operations, making it harder to verify claims. For instance, corporate citizenship activities targeting external stakeholders, like community involvement programs, are often more vulnerable to greenwashing (Li et al. 2023a). This vulnerability arises because these initiatives typically receive less scrutiny compared to a company’s operational practices, making it easier for firms to exaggerate their environmental contributions (Kassinis et al. 2022). Unlike core operational processes, which are often subject to rigorous audits and oversight, community-oriented programs are generally seen through a more lenient lens. Stakeholders, including consumers and investors, are less likely to have direct access to verify the actual impact of these programs, leading to potential disconnects between a company’s public claims and its genuine actions. This reduced level of scrutiny allows firms to project a greener image with minimal effort, leveraging these activities as tools for reputation management rather than genuine sustainability efforts.

From a broader perspective, corporate strategies and stakeholder influence are critical in determining whether environmental practices are genuinely adopted or remain symbolic. Siano et al. (2017) note that varying stakeholder expectations can lead to different levels of environmental commitment. When environmental management systems like ISO 14001 are integrated without corresponding behavioral changes, the result can be superficial improvements in environmental management (Heras-Saizarbitoria et al. 2020). This situation often arises when companies prioritize the appearance of compliance over actual environmental outcomes. Testa et al. (2018a) also suggest that stakeholders like shareholders and suppliers, who are invested in the company’s long-term sustainability, often promote genuine practices. For example, shareholders might demand transparency and real environmental performance improvements to protect their investments. Similarly, suppliers, who are increasingly interconnected through green supply chain management, support sustainable practices to ensure long-term collaboration.

In contrast, customers can inadvertently drive companies toward greenwashing. This happens because they often lack direct access to information about a company’s real environmental practices, leading them to rely on certifications more as marketing tools than as genuine proof of sustainability. Industrial associations may also prioritize economic concerns over environmental goals, sometimes lobbying against stricter regulations, which further complicates the internalization of true sustainability practices. An interesting reflection on organizational implications and micro-level inclinations toward the integration of environmental paradigms comes from Yamoah et al. (2022). Investigating UK food companies, they found that managers are generally aware of environmental issues but often face a misalignment with organizational goals, as the immediate costs of implementing sustainable practices deter proactive changes. This discrepancy can lead to greenwashing, where companies make superficial environmental commitments influenced by public opinion rather than genuine action. This issue was further confirmed by an analysis of green bonds released by Chinese listed companies between 2015 and 2021, which were usually associated with non-invention patents, especially in firms operating in heavily pollutant sectors, where the public pressure to embrace sustainability is higher (Shi et al. 2023). The absence of clear, actionable standards further exacerbates the issue, impeding meaningful engagement with supply chain actors and partners and making short-term economic concerns outweigh the potential long-term benefits of environmental sustainability, leading to strategic inertia.

This tension between genuine environmental efforts and greenwashing is heightened in cases of aspirational greenwashing, where companies commit to long-term sustainability goals while continuing to carry out unsustainable practices in the short term. Aspirational talk (Christensen et al. 2013), like pledges for carbon neutrality or high-profile CSR goals, can help maintain a company’s image and attract environmentally conscious stakeholders. However, it risks creating a gap between promises and what can realistically be achieved, a practice also called “greenwishing.” A key example is British Petroleum (BP), which was praised for its sustainability reporting and “Beyond Petroleum” campaign before the 2010 Deepwater Horizon disaster (Kassinis and Panayiotou 2018). Despite its public commitment to environmental responsibility, BP’s operational focus was on cost-cutting and efficiency, including the use of cheaper cementing methods and the reduction of safety barriers—decisions that directly contributed to the catastrophic oil spill (Matejek and Gössling 2014). This revealed a disconnect between its green rhetoric and operational practices. While BP’s green image initially boosted its reputation, the disaster underscored the risks of aspirational greenwashing when promises do not align with actions. Moreover, the BP case illustrates the increased scrutiny that companies face when they claim leadership in sustainability. BP’s failure to substantiate its “Beyond Petroleum” campaign intensified criticism and resulted in significant reputational damage and a sharp drop in market value due to its loss of moral legitimacy. This underscores the importance of carefully evaluating the strategic benefits and risks of greenwashing as a competitive strategy. While greenwashing may offer short-term competitive advantages, the long-term consequences can be severe. As markets evolve and regulatory pressures increase, companies that rely on greenwashing may face significant reputational risks and financial penalties. This discussion underscores the importance of carefully weighing the strategic benefits and risks of greenwashing.

The consequences of greenwashing are multifaceted, affecting both financial and non-financial performance metrics. Companies that engage in greenwashing often experience a range of negative outcomes, from eroded consumer trust to increased scrutiny from regulators and investors. Kahraman and Kazançoğlu (2019) and Nyilasy et al. (2014) demonstrate that greenwashing diminishes consumers’ intent to make green purchases as they become more skeptical of environmental claims. This erosion of trust can have long-lasting effects on a company’s brand equity and customer loyalty.

From a financial perspective, greenwashing can also have significant repercussions (Bo and Battisti 2024). Cooper and Weber (2021) and García-Sánchez et al. (2021) show how it increases the cost of capital and generally reduces access to finance. Investors are increasingly prioritizing ESG criteria in their decision-making processes, and companies that are perceived as engaging in greenwashing may find it more difficult to secure financing at favorable rates. This is particularly critical in industries where sustainability is a key consideration, such as energy, manufacturing, and consumer goods. A deeper examination reveals that greenwashing negatively impacts overall ESG performance. Indeed, Brandon et al. (2022) and Kim and Yoon (2023) highlight how greenwashing damages a company’s reputation and detracts from its ability to meet meaningful sustainability goals. For instance, firms that sign onto voluntary frameworks like the United Nations Principles for Responsible Investment often experience a rise in capital inflows, yet they fail to improve their actual ESG performance. This mismatch between symbolic ESG claims and actual performance can lead to reputational damage and reduced trust from institutional investors (e.g., pension and sovereign wealth funds or foundations), which are increasingly reluctant to back companies with questionable environmental practices as they seek to mitigate long-term financial risks associated with environmental mismanagement. Further elucidating the consequences of greenwashing, Gatti et al. (2021) demonstrate through an experimental setting that individuals exhibit a diminished inclination to invest in companies implicated in active falsification or engaged in deceptive manipulation. These strategies involve employing tactics that intentionally counterfeit or mislead stakeholders about the company’s practices or achievements. This aversion is more pronounced compared to their reaction to companies that practice selective information disclosure, meticulously curating the information released to present themselves in a favorable light. Additionally, the study highlights a comparative tolerance towards companies that adopt a strategy of diverting attention from their shortcomings, prominently showcasing their positive business practices while overshadowing negative misconduct. In a similar vein, investigating US consumers, Ginder et al. (2021) identified different strategic postures that companies may adopt in approaching their CSR communication. They demonstrate that discreet positioning—characterized by companies not openly communicating their CSR actions but still participating in them—is perceived in a similar manner to uniform positioning, where communication and actions are aligned. These findings provide valuable insights into the nuanced perceptions of different greenwashing strategies and CSR communication approaches, further emphasizing the complexity of managing corporate sustainability communications and practices.

Adding to this complexity, Orazalin et al. (2023) studied 592 global firms from 35 countries and found that while higher GHG emissions negatively impact market value, proactive climate change initiatives are positively correlated with market value. However, the presence of board committees on climate change, which are intended to oversee such initiatives, is paradoxically associated with higher GHG emissions. This may suggest that firms with higher emissions feel greater pressure to establish such committees, possibly as a response to stakeholder expectations. Nevertheless, these committees often fail to effectively reduce emissions, serving more as tools for impression management or greenwashing. The findings highlight the need for corporate boards to not only recognize the detrimental effects of carbon emissions on society and the environment but also to integrate genuine, effective climate change initiatives into their business operations. Accordingly, greenwashing can have profound long-term consequences for regulatory relations and legal risks. As Delmas and Burbano (2011) suggest, companies that rely on deceptive environmental claims are more likely to face penalties from regulators as transparency standards evolve and oversight increases. In sectors with stringent environmental regulations, greenwashing can provoke legal challenges or fines that exacerbate financial instability. This dynamic also extends to voluntary reporting frameworks like ISO 14001 or the Global Reporting Initiative, where firms that fail to align their actual environmental practices with reported claims may face reputational backlash, even if they are not legally obligated to meet the same standards.

The complexity of managing greenwashing risks is further compounded by the growing role of stakeholder activism and social media scrutiny. Gatti et al. (2021) and Li et al. (2023a) emphasize how these platforms have empowered consumers and NGOs to hold companies accountable for exaggerated environmental claims. The rapid dissemination of information on social media can intensify public pressure, making it increasingly difficult for companies to control narratives once allegations of greenwashing arise. For instance, in the Volkswagen emissions scandal, the company’s deceptive practices were exposed through social media, leading to significant reputational damage and heightened regulatory scrutiny.

In conclusion, the consequences of greenwashing extend far beyond temporary reputational risks. While some companies may achieve short-term financial gains by enhancing their green image, the long-term costs—such as increased scrutiny, financial penalties, diminished consumer trust, and potential regulatory backlash—can outweigh these benefits. The interconnectedness of financial, reputational, and regulatory outcomes underscores the importance of aligning symbolic environmental communications with substantive actions to avoid the pitfalls of greenwashing.

This cluster’s focus on marketing, consumer perception, and trust in relation to greenwashing is underpinned by several interconnected theoretical frameworks. At the core of this theoretical landscape is signaling theory, which explains how companies attempt to convey their environmental credentials to consumers through various marketing strategies. This theory has been crucial in exploring how firms use green marketing to differentiate themselves and how consumers interpret these signals in the context of potential greenwashing (Berrone et al. 2017). Similarly, the economic aspects of green marketing are addressed through value-based pricing theory, which offers insights into how companies might set prices for sustainable products. This theory helps explain how pricing strategies can influence consumer perceptions of value and quality in relation to green claims, potentially affecting their purchasing decisions. In fact, Lee et al. (2018b) note, price often serves as an external cue for consumers to infer the quality and value of green products.

Closely related to signaling theory is the concept of brand trust, which emerges as a critical factor in the effectiveness of green marketing strategies. Studies have examined how trust mediates the relationship between green marketing efforts and consumer responses, highlighting the challenges companies face in building credibility for their sustainability claims (Chen and Chang 2013). This focus on trust naturally leads to consideration of the theory of planned behavior, which extends our understanding of consumer decision making in sustainability contexts. By suggesting that intentions to engage in environmentally friendly behaviors are influenced by attitudes, subjective norms, and perceived behavioral control, this theory helps explain the often-observed gap between consumers’ positive attitudes towards sustainable products and their actual purchasing behaviors.

The cognitive and emotional aspects of consumer responses to sustainability claims are further elucidated through several complementary models. The cognition–affect–behavior (C–A–B) model has been applied to understand how consumers process and respond to sustainability-related information. For instance, Rahman et al. (2015) demonstrated how perceived insincerity in a hotel’s green marketing efforts can trigger skepticism (affect), potentially leading to negative behavioral outcomes like reluctance to revisit or support the brand (behavior). Building on this understanding of cognitive and emotional processes, the affect–reason–involvement (ARI) model has also been utilized to explore both logical and emotional elements in green advertising. Schmuck et al. (2018) applied this model to examine how greenwashing advertisements influence consumer evaluations of ads and brands (affect), revealing that emotional responses to nature imagery in ads (reason) can be more influential in shaping attitudes than rational assessments of greenwashing (involvement). Complementing these models, the stimulus-organism-response theory provides a framework for understanding how environmental stimuli (such as green marketing messages) are processed internally by consumers and lead to specific behavioral responses. This theory offers additional insights into the process of consumer decision making in response to sustainability claims. For instance, it could explain how a consumer might respond to a product labeled as “eco-friendly” by researching the claim (organism) before deciding to purchase or not (response). In addition, social exchange theory can be applied to this context to help explain how consumers weigh the perceived benefits and costs of engaging with brands making sustainability claims. This theoretical perspective sheds light on the factors influencing consumer trust and loyalty in the face of green marketing efforts. For example, it can explain why consumers might remain loyal to a brand accused of greenwashing if they perceive the overall benefits of the brand’s products to outweigh the costs of the misleading claims.

These theoretical applications collectively illuminate the complexity of consumer responses to green marketing. They highlight that environmental knowledge alone does not guarantee consumers’ ability to detect misleading advertising intentions. Instead, the interplay of cognitive, emotional, and economic factors significantly influences how consumers interpret and respond to sustainability claims. By integrating these diverse theories and their applications, researchers have developed a more nuanced understanding of the challenges and dynamics involved in effectively communicating sustainability efforts while maintaining consumer trust and avoiding perceptions of greenwashing. This comprehensive theoretical framework provides a solid foundation for analyzing the multifaceted nature of consumer responses to sustainability marketing and the potential for greenwashing.

Consumer perception and response to greenwashing are complex phenomena influenced by various factors. Research has shown that consumers’ ability to detect and respond to greenwashing is not solely dependent on their environmental knowledge. Instead, as previously introduced, it involves an interplay of cognitive, emotional, and behavioral factors. For instance, Gosselt et al. (2019) found that consumer responses to green initiatives can significantly impact behavior and brand loyalty. However, the effectiveness of these initiatives is mediated by consumers’ ability to discern genuine sustainability efforts from greenwashing. This discernment is often challenging, as Chen and Chang (2013) highlight, noting that misleading information can lead to confusion and uncertainty and thus complicate consumers’ decision-making processes. In some cases, confusion might arise not only from misleading advertising but also from a company’s attempt to obscure the environmental impact of its broader operational practices, thereby deepening the cognitive load required for consumers to make informed choices.

The cognitive challenges posed by greenwashing can lead consumers to adopt different strategies. Some may lean towards heuristic evaluations to conserve cognitive resources, prioritizing cognitive ease over thorough analysis (Testa et al. 2020). This heuristic approach often leads consumers to rely on surface-level indicators, such as green-colored packaging or labels with vague environmental claims like “natural” or “eco-friendly,” without thoroughly investigating the actual impact of the product. As a result, products that adopt superficial green cues may still benefit from positive consumer perceptions, even if they lack substantive environmental improvements. Others might experience negative emotions such as a sense of betrayal, which can alter their behaviors in ways that inadvertently undermine genuine sustainability efforts (Kahraman and Kazançoğlu 2019). When consumers perceive that they have been deceived, this emotional response can translate into long-term damage to brand trust, making it difficult for companies to rebuild consumer confidence, even if they later adopt genuine environmental practices.

Interestingly, in this vein, the willingness of consumers to pay a premium for eco-friendly products—linked to substantive CSR activities—can potentially deter companies from greenwashing (Ioannou et al. 2023). However, as Nardi (2022) points out, the effectiveness of this premium depends on consumers’ ability to monitor environmental impacts, their CSR preferences, and the competitive environment. In highly competitive markets where multiple firms engage in green marketing, consumers may become overwhelmed by the volume of green claims, which could diminish their ability to distinguish between genuine and misleading CSR initiatives. This, in turn, can lower their willingness to pay a premium for eco-friendly products, as they may perceive these claims to be less trustworthy overall. Schmuck et al. (2018) provide further insights into consumer responses to greenwashing. They found that while ambiguous verbal claims do not necessarily heighten perceptions of greenwashing, outright false claims are perceived as deceptive. Moreover, they discovered that greenwashing with nature imagery triggers an emotional response similar to experiencing real nature, which can be more influential in shaping attitudes towards ads and brands than rational greenwashing perceptions. For instance, an advertisement that uses images of pristine landscapes or wildlife can create a strong positive emotional association with the product, even if the environmental claims made by the company are not entirely credible. This emotional appeal often distracts consumers from critically evaluating the veracity of the claims. Furthermore, Rahman et al. (2015) explored the behavioral consequences of consumer perceptions of insincere green marketing efforts, showing that these perceptions can lead to a significant decline in brand loyalty and negative word-of-mouth. Such negative behaviors can spread quickly through social media platforms, amplifying the reputational damage for companies accused of greenwashing. Indeed, in today’s digital environment, consumers are more empowered to share their experiences and influence others’ perceptions, making it critical for companies to maintain transparency in their sustainability claims to avoid widespread backlash.

These findings underscore the complexity of consumer responses to greenwashing and highlight the need for a nuanced understanding of how consumers process and react to sustainability claims in marketing communications. Companies that engage in green marketing without substantive environmental commitments risk not only short-term damage to their reputation but also long-term consequences for consumer loyalty and market position. In contrast, firms that invest in transparent, verifiable sustainability practices are more likely to build lasting trust with consumers, even in competitive environments.

In the current era of heightened environmental consciousness, companies face significant challenges in effectively communicating their sustainability efforts while avoiding accusations of greenwashing. In fact, companies engaged in green marketing face immediate scrutiny and are often presumed guilty of greenwashing unless they can substantiate their claims (Seele and Gatti 2017). This heightened skepticism has led to a potential boomerang effect, where ostensibly positive intentions can backfire, underscoring the importance of legitimacy and signaling theory in green marketing (Berrone et al. 2017).

Marketing strategies in this domain range from subtle green cues to explicit sustainability claims. For instance, some companies superficially label conventional products as “green” by merely incorporating a minimum of eco-friendly features. This strategy allows firms to avoid substantial investments in truly green innovation while still capitalizing on the growing demand for sustainable products (Guo et al. 2018). A clear example of this is Coca-Cola’s introduction of Coca-Cola Life, packaged in green cans and sweetened with stevia, which was marketed as a healthier, environmentally friendly alternative. However, critics pointed out that most of the other ingredients remained unchanged, demonstrating a superficial green shift rather than substantive environmental progress. Similarly, H&M has been criticized for its pledge to use 100% recyclable or sustainable materials by 2030. While the fast fashion giant promotes this goal, critics argue that the sheer volume of production, combined with the complexity of its supply chain, undermines the sustainability message. Many consumers and stakeholders have expressed skepticism over whether the company’s green branding aligns with its actual environmental impact.

The effectiveness of these strategies can vary significantly across different sectors. For example, Font et al. (2017) highlighted the risks of misleading or deceptive green advertising in the tourism industry, where consumers are especially sensitive to environmental claims. Similarly, Apaolaza et al. (2023) and Policarpo et al. (2023) showed that brands in the fashion industry frequently face accusations of greenwashing due to opaque supply chains and inconsistent sustainability practices. These industry-specific studies underscore that while greenwashing concerns transcend sector boundaries, the manifestation and impact of greenwashing can vary based on industry characteristics. Corporate communication strategies also play a crucial role in shaping public perception. Siano et al. (2017) demonstrated how scandals such as Volkswagen’s emissions cheating can have broad repercussions that transcend the industry and spotlight the critical need for transparency and integrity in corporate environmental initiatives more broadly. The Volkswagen emissions scandal, which involved the company’s deceptive marketing of “clean diesel” vehicles, led to significant reputational damage and regulatory consequences. This case highlights how greenwashing not only damages a company’s image but also invites legal and regulatory scrutiny, with long-term financial impacts.

The challenges in corporate communication are further complicated by the fact that accusations of greenwashing can arise from both environmental and non-environmental factors, including communication quality. Szabo and Webster (2021) emphasized that such accusations can disproportionately denigrate companies, exceeding the actual impact of their practices. Once implicated in greenwashing, a company may find itself disproportionately blamed for environmental harm or climate change, as public perception can amplify the severity of the offense. Restoring consumer trust after a greenwashing scandal can be a difficult and prolonged process. Guo et al. (2018) highlighted that companies must make significant adjustments in their marketing and communication strategies to regain credibility. For instance, after the Volkswagen scandal, the company embarked on an aggressive rebranding campaign, emphasizing its commitment to electric vehicles and stricter environmental standards. However, regaining trust after such a major breach requires more than just improved communication; it demands substantive changes in both corporate practices and stakeholder engagement strategies.

At the macro level, legitimacy theory, institutional theory, and stakeholder theory remain the primary frameworks for understanding how organizations manage greenwashing. These theories explore how firms respond to external pressures such as regulatory changes, cultural norms, and market expectations in order to maintain their legitimacy and ensure their survival. For instance, Marquis et al. (2016) used legitimacy theory to demonstrate how firms selectively disclose environmental information to maintain social approval. However, much of the literature has focused on pragmatic legitimacy, which emphasizes meeting immediate stakeholder needs. Torelli et al. (2020) highlight the importance of legitimacy theory and signaling theory for understanding greenwashing, underscoring the strategic use of selective disclosures to bolster corporate reputation, particularly in industries vulnerable to environmental scrutiny. Accordingly, future research should further investigate how greenwashing impacts the moral and cognitive dimensions of legitimacy. These dimensions extend beyond short-term stakeholder approval and delve into the ethical congruence between a company’s stated values and its actions. Research could explore questions such as how greenwashing erodes trust in corporate environmental claims and whether repeated exposure to greenwashing diminishes the moral credibility of firms.

Stakeholder theory also plays a key role at the macro level by examining how firms manage competing stakeholder pressures, often leading to greenwashing as a way to balance diverse expectations. Specifically, instrumental stakeholder theory (Donaldson and Preston 1995) suggests that firms respond to stakeholders not solely out of ethical duty but also to enhance their financial performance. Additionally, stakeholder salience theory (Mitchell et al. 1997) highlights how organizations prioritize responses to stakeholders based on their power, legitimacy, and urgency. This may drive firms to engage in symbolic environmental actions that satisfy the most salient stakeholders while neglecting broader sustainability goals. Despite their relevance, these aspects of stakeholder theory remain underexplored in the greenwashing literature, representing a fertile ground for future research (Kim and Lyon 2015). Accordingly, future studies could investigate how stakeholder salience influences greenwashing strategies—in particular, why some stakeholder pressures are more likely to prompt substantive environmental actions while others trigger symbolic compliance. For example, companies may engage in greenwashing to respond to high-salience stakeholders, such as powerful investors or governmental regulators, who can impact a firm’s financial performance or operations. Conversely, firms may downplay concerns from low-salience stakeholders like environmental activists if they perceive the immediate risk of non-compliance as low. Future research could also explore how the effectiveness of green signals varies based on the power and urgency of different stakeholder groups and whether misleading signals result in long-term reputational damage once exposed. Hence, future research could explore how signaling theory intersects with stakeholder salience by investigating how firms use these signals to prioritize their interactions with different stakeholders.

Furthermore, political-economy theory, which examines the role of power structures and political interests in shaping economic systems, has been underutilized in greenwashing research. This theory offers a valuable lens for exploring how economic and political forces enable firms to engage in greenwashing with minimal consequences. Berrone et al. (2017) argued that weak regulatory frameworks and institutional environments often enable corporate misconduct, particularly in emerging economies. Future studies could investigate how political lobbying and regulatory capture by powerful industries create environments where greenwashing thrives. For example, companies may invest heavily in lobbying efforts to reduce environmental regulations or shape public policy in ways that decrease the risk of accountability for deceptive green claims. One potential avenue for research involves examining the intersection of political-economy theory and institutional theory. This integration could offer insights into how institutional norms and power structures conflate to influence the development of environmental regulations. As discussed, several studies have shown that greenwashing can be seen as a decoupling strategy where firms symbolically comply with environmental regulations while evading substantive change. By combining political-economy and institutional perspectives, researchers could explore how power dynamics shape the enforcement of environmental standards and why certain firms are more successful at avoiding accountability for their greenwashing practices.

Recent developments in emerging technologies further complicate the macro-level dynamics of greenwashing. As Seele and Schultz (2022) describe, the rise of “machinewashing” involves parallels between greenwashing and the unethical use of technologies like AI to manipulate information, conceal environmental wrongdoings, or circumvent regulations. Similarly, Schwaeke et al. (2025) have recently proposed an integrative model for AI adoption, emphasizing the need for robust data management, system integration, and continuous performance monitoring to mitigate risks of misrepresentation and alignment with firms’ sustainability objectives. This represents a new frontier for both greenwashing research and corporate accountability. Future studies could investigate how advanced technologies are leveraged to enhance deceptive green claims, leading to new forms of greenwashing that are more difficult for regulators and stakeholders to detect. Such technological innovations raise questions about the adequacy of current regulatory frameworks for addressing tech-enabled greenwashing.

At the meso level, theories such as agency theory, the RBV, and game theory provide valuable insights into how firms balance internal dynamics with external pressures in their environmental strategies. These theories explore the decision-making processes within firms and how firms manage resources to maintain legitimacy and project an environmentally responsible image. In this section, we outline how these theories contribute to understanding greenwashing and propose future research directions.

Agency theory highlights the conflicts of interest that can arise between a firm’s principals (e.g., shareholders) and agents (e.g., managers), particularly when agents prioritize short-term financial gains over long-term sustainability (Gull et al. 2023). Greenwashing can occur when managers mislead stakeholders in order to appear environmentally responsible without making substantive changes to the firm’s practices. While agency theory has been applied to understand corporate governance issues, future research could explore how incentive structures within firms drive managers toward greenwashing as a short-term solution, especially when sustainability performance metrics are linked to executive compensation. This could be particularly relevant for firms in highly competitive markets where immediate financial performance is crucial. Moreover, this theory aligns well with upper echelon theory, which posits that organizational outcomes are shaped by the values and experiences of top executives (Zhang et al. 2023). For instance, although no studies have integrated these perspectives, leadership characteristics such as risk tolerance or ethical orientation could influence a firm’s propensity to engage in symbolic environmental actions. Future research could investigate how these leadership traits mediate the relationship between internal managerial decisions and external greenwashing behaviors, particularly in industries with strong financial pressures.

The RBV and slack resources theory explain how firms use their resources to manage sustainability efforts. The RBV posits that firms gain competitive advantage through the strategic deployment of unique resources and capabilities (Barney 1991). In the context of greenwashing, firms with strong environmental capabilities may genuinely invest in sustainability initiatives, while those lacking such capabilities may resort to symbolic actions to maintain their image. However, slack resources theory offers a more nuanced perspective by suggesting that firms with surplus resources are more likely to innovate and engage in genuine sustainability efforts, while those with fewer resources may adopt symbolic environmental policies to meet stakeholder expectations without making substantive changes (Bryant et al. 2020). This dynamic may be especially pronounced in small and medium-sized enterprises (SMEs), where resource constraints can drive firms toward greenwashing as a cost-effective strategy to manage external pressures. Combining the RBV with slack resources theory could provide a broader framework for understanding how firms’ resource availability affects their choice between genuine sustainability efforts and symbolic actions. Accordingly, future research could investigate the role of slack resources in driving meaningful environmental actions, focusing on whether firms with excess resources are better positioned to engage in long-term sustainability strategies. Additionally, studies could explore how resource-constrained firms such as SMEs navigate the tension between stakeholder expectations and resource limitations, leading to either substantive environmental efforts or greenwashing (Orazalin et al. 2023).

Game theory offers another perspective on the strategic decision-making processes related to greenwashing, especially in competitive environments. This theory examines how firms interact with competitors and stakeholders, often using green claims as a strategic tool to differentiate themselves in the market (Huang et al. 2020; Wu et al. 2020). For example, firms may engage in greenwashing to outcompete rivals by projecting an environmentally responsible image while continuing harmful practices behind the scenes. However, the strategic value of greenwashing diminishes as transparency increases, encouraging firms to adopt genuine sustainability measures (Wu et al. 2020). Future research could explore how transparency regimes or consumer access to environmental information influence the effectiveness of greenwashing as a competitive strategy, particularly in emerging markets where regulatory frameworks may be weaker. Several studies have further explored these issues by applying signaling theory to dissect the communicative aspects of greenwashing, where companies often broadcast misleading environmental signals to stakeholders through their CSR disclosures (Kim and Lyon 2015; Torelli et al. 2020) or social media communications (Amin et al. 2022; Lyon and Montgomery 2013). A misalignment here often leads to accusations of greenwashing and corporate hypocrisy, potentially compromising stakeholders’ engagement and trust (Bernard and Nicolau 2022; Seele and Gatti 2017). The tension between symbolic management (aimed at creating positive perceptions) and attribution theory (explaining how these symbols are interpreted) highlights the challenges organizations face in managing their environmental image. However, the interplays between what is signaled by companies and what is substantiated by receivers still need deeper investigation (Li et al. 2023a).

Further considering the internal and strategic pressures that influence greenwashing behavior, beyond-compliance theory provides insights into why firms voluntarily exceed regulatory standards in their environmental practices (Bryant et al. 2020). Indeed, while some companies genuinely aim to improve their sustainability performance, others may use beyond-compliance actions as a way to offset past environmental wrongdoings or to create a buffer against future risks. Future research could explore how beyond-compliance strategies are used as defensive mechanisms to mitigate reputational risks associated with greenwashing and how regulatory capture influences the effectiveness of these strategies.

Finally, another underexplored theory is organizational communication theory. Linked to institutional theory and stakeholder theory, organizational communication theory offers perspectives on how firms craft narratives around their sustainability efforts to shape stakeholder perceptions, usually as a response to institutional pressures or regulations. According to Nass and Purwin (2024), organizational narratives and individual sensemaking are key elements in driving sustainability-related decision making. Positioned within the organizational hierarchy, they are actively involved in interpreting (sensemaking) the organizational goals set by senior management and translating (sensegiving) them into actionable steps for employees who carry out day-to-day operations. Future research could explore the roles of other figures, such as lower-level employees, CSR officers, or even external consultants, in influencing sustainability narratives within organizations. Furthermore, research exploring how different layers of organizational communication interact to either support or challenge greenwashing practices could help uncover how various actors contribute to symbolic versus substantive sustainability efforts.

At the micro level, theories such as attribution theory, consumer behavior theory, and the theory of planned behavior provide valuable insights into how consumers, employees, and individual stakeholders interpret and react to environmental claims. For instance, Gosselt et al. (2019) used attribution theory to explore how consumers attribute motives to firms’ environmental claims, which often leads to skepticism that may persist long-term. While attribution theory has been used to examine how deceptive environmental practices influence consumer behavior, there are ample opportunities to investigate how personal values and individual decision-making processes play a role in moderating these effects. Future studies could explore whether more transparent communication can mitigate the negative attributions associated with greenwashing.

Furthermore, consumer behavior theory sheds light on the purchasing decisions made in response to green claims, with a significant impact on consumer trust and loyalty. While much of the existing research focuses on confusion and mistrust (e.g., Apaolaza et al. 2023; Kahraman and Kazançoğlu 2019), there is still a need to explore how consumer education on environmental issues might reduce the effectiveness of greenwashing or the necessity of regulating it (Lee et al. 2018a). Future studies could analyze the relationship between consumer knowledge, transparency of green claims, and purchasing behavior across diverse demographic groups, including younger generations who are increasingly eco-conscious. Moreover, exploring how digital platforms like social media influence these behaviors could open new avenues for research into how consumers interpret and spread environmental messages.

Another emerging area involves stimulus-organism-response (SOR) theory, which provides a more holistic view of how consumers process green marketing stimuli. Rahman and Nguyen-Viet (2023) suggest that trust and non-deception play a key role in how consumers develop trust toward green brands. By using the SOR framework, future research could investigate how green marketing acts as a stimulus that shapes cognitive and emotional responses, potentially leading to changes in behavior or disillusionment when deceptive claims are revealed. These studies could focus on whether specific stimuli (e.g., green certifications and product labels) lead to heightened skepticism or, conversely, reinforce trust in genuine environmental initiatives.

Gender socialization theory and critical mass theory offer additional underexplored avenues for examining how individual characteristics and group dynamics influence perceptions of greenwashing. For instance, gender socialization theory suggests that men and women may process environmental claims differently due to varied social conditioning regarding environmental responsibility. Future research could investigate how gendered perceptions influence responses to green claims, especially in light of growing interest in gender diversity in corporate leadership (Sterbenk et al. 2022). Additionally, critical mass theory, which has been applied to investigate organizational board composition (Eliwa et al. 2023), can be extended to the consumer level to explore whether a critical mass of informed consumers can shift market dynamics and reduce the prevalence of greenwashing. Research could examine how social media platforms and online consumer communities help to generate this critical mass and influence broader purchasing behaviors.

Another key area of interest is information asymmetry theory; although it is traditionally applied in agency contexts, it has significant relevance for the micro level. Greenwashing exploits the information gap between companies and consumers, particularly by making misleading environmental claims that are difficult for the average consumer to verify. Future studies could examine how reducing information asymmetry affects consumer and investor trust and purchasing behavior or investment decisions (Gatti et al. 2021; Koseoglu et al. 2021). This line of research could extend to investigating how digital tools like blockchain-based transparency initiatives might reduce information asymmetry and protect stakeholders from deceptive practices.

In conclusion, micro-level theories offer substantial opportunities for future research, especially for understanding consumer behavior and individual responses to greenwashing. As the cross-level theoretical integrations in this framework suggest, combining macro-level theories such as institutional theory with micro-level approaches like consumer behavior theory could provide a more comprehensive understanding of how regulatory pressures shape individual decision making. Similarly, integrating meso-level organizational communication theory with micro-level theories could reveal how firms’ communication strategies influence individual trust and behavior. In this vein, future studies could further explore how group dynamics, individual characteristics, and information transparency affect the perceived legitimacy of environmental claims and, ultimately, how these perceptions influence broader market behaviors.