Academic Journal of Business & Management, 2025, 7(1); doi: 10.25236/AJBM.2025.070106.
Liu Siqi
University of Shanghai for Science and Technology, Shanghai, China
The rise of the ESG concept reflects the emphasis on sustainable development, yet the greenwashing phenomenon poses a challenge to it. This paper reviews the development process of ESG, analyzes the evolution, theoretical roots, causes of the greenwashing phenomenon, and proposes corrective approaches. Greenwashing stems from enterprises' profit-seeking impulses and manifests itself in data falsification, selective disclosure and misleading publicity, which undermines market trust. The principal-agent theory, information asymmetry theory, signaling theory and institutional isomorphism theory explain its causes. At the institutional level, there are flaws in regulations and standards; at the market level, consumers and investors have limitations; and at the enterprise level, there are problems with organizational culture and managers' behaviors. The corrective approaches include improving the institutional system, guiding and cultivating the market, and enabling enterprises to carry out self-innovation. It requires the joint efforts of all parties to build a sustainable business ecosystem.
greenwashing; ESG; sustainable development
Liu Siqi. ESG Greenwashing: Theoretical Tracing and Practical Correction of ESG Conceptual Alienation. Academic Journal of Business & Management (2025) Vol. 7, Issue 1: 45-53. https://doi.org/10.25236/AJBM.2025.070106.
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