Fishing in muddy water? Climate policy uncertainty and corporate greenwashing in environmental, social, and governance

Abstract

This study investigates the relationship between climate policy uncertainty and corporate greenwashing behavior using data from Chinese A-share listed companies from 2009 to 2021. The results indicate that the increasing climate policy uncertainty significantly and robustly strengthens corporate greenwashing behavior, particularly among firms located in regions with weaker environmental regulations, within high-polluting industries and with shorter-term management perspectives. Additionally, the development and widespread adoption of digital technologies, along with enhanced external regulatory pressures, can inversely moderate the positive relationship between climate policy uncertainty and corporate greenwashing. In summary, this study contributes to our understanding of corporate behavior under climate risks and provides insights for achieving social sustainability.