Are firms motivated to greenwash by financial constraints? Evidence from global firms' data

Abstract Corporate social responsibility is the balance between a firm's economic outcomes and environmental protection. However, investors face increasing difficulties in selecting assets with suitable environmental, social, and governance (ESG) policies because companies may “greenwash” their activities by, for example, make misleading ESG disclosures. Here, we investigate the determinants that lead to companies engaging in ESG greenwashing. By analyzing international large‐cap companies across 47 countries and territories, we create a peer‐relative greenwashing score to measure the magnitude of ESG greenwashing by companies. First, we measure and evaluate the greenwashing by analyzing ESG disclosures and…