Proceedings of the International Conference on Environmental, Social, and Governance (ICESG 2024)

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The Impact of Greenwashing: Risks and Implications for Corporate Performance and Stakeholder Trust

Authors
Woon Leong Lin1, *, Siong Choy Chong1, Chuen Khee Pek1, Jing Yi Yong1, Kelvin Lee Yong Ming1, Nelvin Leow XeChung1
1School of Management and Marketing, FacultyBusinessandLaw, Taylor’s University, Subang Jaya, Malaysia
*Corresponding author. Email: woonleong.lin@taylors.edu.my
Corresponding Author
Woon Leong Lin
Available Online 31 January 2025.
DOI
10.2991/978-2-38476-358-0_8How to use a DOI?
Keywords
Greenwashing; Firm Risk; Corporate Reputation; Stakeholder Trust; Sustainability Practices
Abstract

This conceptual paper investigates the impact of greenwashing on firm risk, corporate reputation, and financial performance, particularly in industries with significant environmental implications. Using Legitimacy Theory, Stakeholder Theory, and Signalling Theory, it explores why firms engage in greenwashing and the risks associated with deceptive environmental practices. Greenwashing may offer short-term benefits, such as enhanced brand image or market share, but it also leads to long-term consequences, including legal liabilities, reputational damage, and financial instability. The paper emphasizes the importance of corporate transparency and genuine sustainability practices in mitigating these risks. By aligning corporate actions with stakeholder expectations and promoting accountability, firms can avoid the pitfalls of greenwashing and build lasting trust with consumers, investors, and regulators. This theoretical framework offers insights into how companies can foster ethical behaviour and sustainable practices for long-term success.

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the International Conference on Environmental, Social, and Governance (ICESG 2024)
Series
Advances in Social Science, Education and Humanities Research
Publication Date
31 January 2025
ISBN
978-2-38476-358-0
ISSN
2352-5398
DOI
10.2991/978-2-38476-358-0_8How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Woon Leong Lin
AU  - Siong Choy Chong
AU  - Chuen Khee Pek
AU  - Jing Yi Yong
AU  - Kelvin Lee Yong Ming
AU  - Nelvin Leow XeChung
PY  - 2025
DA  - 2025/01/31
TI  - The Impact of Greenwashing: Risks and Implications for Corporate Performance and Stakeholder Trust
BT  - Proceedings of the International Conference on Environmental, Social, and Governance (ICESG 2024)
PB  - Atlantis Press
SP  - 77
EP  - 94
SN  - 2352-5398
UR  - https://doi.org/10.2991/978-2-38476-358-0_8
DO  - 10.2991/978-2-38476-358-0_8
ID  - Lin2025
ER  -