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  • Writer's pictureDavid P. Castro

PhD Project: Greenwashing in Multinational Corporations

'The development of greenwashing practices in a globalized economy: exploring the challenges to theorize and measure how Multinational Corporations organize greenwashing.'


Research Area: Transnational governance, corporate networks, political economy, organization studies, and sustainable finance.



The growing demand for ESG (Environmental, Social, and Governance) investments has increased incentives for firms to engage in 'greenwashing' — perceived as disinformation disseminated by an organization to present an environmentally responsible public image. Firms engage in greenwashing to obscure the level of emissions linked to their operations and/or to appear legitimate to stakeholders. Greenwashing presents an important theoretical and empirical challenge for organization studies and political economy. Attempts to establish a clear definition of greenwashing have relied on the moment that specific marketing activity occurs (Seele & Gatti 2017), such as the public claiming that a company is presenting itself as sustainable when it is not (Mitchell & Ramey, 2011; Ramus & Montiel, 2005), advertising services and products as sustainable compliance to mislead consumers (Chen and Chang, 2013), and other forms of communication and dissemination.


There has been little engagement with greenwashing as an ongoing organizational problem for both Multinational Corporations (MNCs) and those seeking to stamp out the practice. The most acute problem is finding ways to identify how MNCs engage in greenwashing practices before they are known in the public sphere. Seizing this opportunity, the core research objective of this project is to advance theorization and develop an organizational research methodology to identify greenwashing practices in corporate structures. The will to track and map non-public greenwashing practices has been expressed by transnational standard setters—such as the European Securities and Market Authority (ESMA, 2022)—to improve corporate disclosures to mitigate growing greenwashing risks. Research is needed to identify and catalogue the varieties of greenwashing and measure its impact on corporate governance (Lyon & Montgomery, 2015).


Greenwashing is an acute problem in the relationship between contemporary capitalism and climate change mitigation, as scholars in organization studies and political economy have pointed out (Demers & Gond, 2020; Paterson, 2020). While we have insights into how MNCs organize greenwashing from public scandals, like Volkswagen’s ‘dieselgate’ (Gaim et al., 2021; Holtbrügge & Conrad, 2020), most greenwashing activity takes through the environmental management of assets within corporate structures (Gabor et al., 2019). These practices logically stem from relationships among professionals, clients (such as investors), and regulators across the firms' interactions and how they share their information to define firm’s compliance with perceived metrics of sustainable assets.


To reveal how MNCs organize greenwashing, this project proposes the following research question:


How do firms organize the sustainability profile of assets in multinational corporate structures?



References


Chen, Y. S., & Chang, C. H. (2013). Greenwash and green trust: The mediation effects of green consumer confusion and green perceived risk. Journal of Business Ethics, 114(3), 489-500.


Demers, C., & Gond, J.-P. (2020). The Moral Microfoundations of Institutional Complexity: Sustainability implementation as compromise-making at an oil sands company. Organization Studies, 41(4), 563–586.


ESMA. (2022, February). Sustainable Finance Roadmap 2022–2024 (No. ESMA30-379–1051). European Securities and Markets Authority. https://www.esma.europa.eu/sites/default/files/library/esma30-379-1051_sustainable_finance_roadmap.pdf


Gabor, D., Dafermos, Y., Nikolaidi, M., Rice, P., van Lerven, F., Kerslake, R., Pettifor, A. and Jakobs, M. (2019) Finance and climate change: A progressive green finance strategy for the UK. Report of the independent panel commissioned by Shadow Chancellor of the Exchequer John McDonnell MP.


Gaim, M., Clegg, S., & Cunha, M. P. E. (2021). Managing impressions rather than emissions: Volkswagen and the false mastery of paradox. Organization Studies, 42(6), 949-970.


Holtbrügge, D., & Conrad, M. (2020). Decoupling in CSR reports: A linguistic content analysis of the Volkswagen Dieselgate scandal. International Studies of Management & Organization, 50(3), 253-270.


Lyon, T. P., & Montgomery, A. W. (2015). The Means and End of Greenwash. Organization & Environment, 28(2), 223–249.


Mitchell, L., & Ramey, W. (2011). Look how green I am! An individual-level explanation for greenwashing. Journal of Applied Business and Economics, 12(6), 40-45.


Paterson, M. (2020). Climate change and international political economy: Between collapse and transformation. Review of International Political Economy, 28(2), 394-405.


Ramus, C. A., & Montiel, I. (2005). When are corporate environmental policies a form of greenwashing?. Business & Society, 44(4), 377-414.


Seele, P., & Gatti, L. (2017). Greenwashing revisited: In search of a typology and accusation‐based definition incorporating legitimacy strategies. Business Strategy and the Environment, 26(2), 239-252.





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