Who's Greenwashing Via the Media and What are the Consequences? Evidence From China

Jerry Cao, Robert Faff, Jing He, Yong Li*

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

Abstract

We show that those Chinese listed companies that are riding high on the media corporate social responsibility (CSR) ranking lists tend to have greater advertising (sales) expenses and poor environmental performance. This observation suggests that some companies opportunistically use media to greenwash their image, hoping to capture economic rents. Indeed, our evidence shows that greenwashing firms benefit in the lending market by exploiting the media to gain a kind of environmental, social, and governance (ESG) endorsement, thereby allowing them to achieve a lower cost of debt and to experience lower collateral obligations. The evidence suggests an adverse incentive to exploit ESG awareness via media coverage in weak institutional environments and opaque ESG disclosure regimes.

Original languageEnglish
Pages (from-to)759-786
Number of pages28
JournalAbacus
Volume58
Issue number4
DOIs
Publication statusPublished - 16 Dec 2022

Fingerprint

Dive into the research topics of 'Who's Greenwashing Via the Media and What are the Consequences? Evidence From China'. Together they form a unique fingerprint.

Cite this