DOES CLIMATE RISK EXACERBATE CORPORATE GREENWASHING? EVIDENCE FROM CHINESE LISTED FIRMS AND IMPLICATIONS FOR ENVIRONMENTAL DISCLOSURE REGULATION

Resumo

Climate risk has become an increasingly important factor influencing corporate environmental behavior. However, it remains unclear whether climate risk inhibits greenwashing or prompts companies to adopt more symbolic environmental strategies. This paper examines the impact of climate risk on corporate greenwashing behavior using a sample of A-share listed companies in China from 2009 to 2023. A conditionally fixed-effects logit model is employed, and a binary index is used to measure corporate greenwashing behavior. The results show that climate risk significantly increases the likelihood of companies engaging in greenwashing. This conclusion remains robust even after excluding years affected by the COVID-19 pandemic, using lagged climate risk variables, and replacing the dependent variable with a continuous greenwashing index. Heterogeneity analysis further indicates that the impact of climate risk on non-heavily polluting industries is numerically stronger than that on heavily polluting industries. These results suggest that rising climate risk may prompt companies to greenwash rather than make substantial environmental improvements to maintain their environmental legitimacy. This study contributes to the literature on climate risk and greenwashing and provides regulatory insights for environmental information disclosure, verification and accountability mechanisms, anti-greenwashing governance, and climate governance.