Uncovering Greenwashing: Investigating Impression Management Gap in Corporate Reporting

Abstract

The current study examined the impression management gap between sustainability and management reports, which in this study serves as a proxy for greenwashing in sustainability reporting. The study sample comprised 192 reports from 24 companies, covering the period 2020–2023. Impression management gaps were estimated across four dimensions—tone, analytical thinking, authenticity, and clout—using textual analysis with the Linguistic Inquiry Word Count software. Our findings reveal significant impression management gaps for tone, clout, and analytics dimensions throughout the entire research sample, confirming a more pronounced use of impression management techniques in sustainability reporting. Despite increasing regulatory pressure during the study period, the calculated gaps did not show signs of decreasing. The results further indicate a high likelihood of greenwashing in the Services and Manufacturing sectors, and a lower likelihood in the Utilities sector. Such gaps risk misleading stakeholders by shaping perceptions that diverge from a company’s actual sustainability practices. Our findings suggest that greenwashing can be effectively detected through textual analysis of disclosures, particularly when conducting comparative studies between different reports. Building on these results, we argue that targeted reporting standards, advanced assurance methodologies, and clearer boundaries for impression management are essential to curbing greenwashing and strengthening the integrity of sustainability communication.