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The Harm of Symbolic Actions and Green-Washing: Corporate Actions and Communications on Environmental Performance and Their Financial Implications

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Abstract

We examine over 100 top performing Canadian firms in visibly polluting industries as we seek to answer four research questions: What specific environmental issues are firms addressing? How do these issues differ between industries? Are both symbolic and substantive actions financially beneficial? Does green-washing, measured as the difference between symbolic and substantive action, and/or green-highlighting, measured as the combined effect of symbolic and substantive actions, pay? We find that substantive actions of environmental issues (green walk) neither harm nor benefit firms financially, but symbolic actions (green talk) are negatively related to financial performance. We also find that green-washing (discrepancy between green talk and green walk) has a negative effect on financial performance and green-highlighting (concentrated efforts of the talk and walk) has no effect on financial performance. In this article, we provide explanations of our findings and put forth future research directions.

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Notes

  1. We initially included LEED certification, but it was subsequently dropped as only one company in the entire sample mentioned it.

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  1. Odette School of Business, University of Windsor, Windsor, ON, N9B 3P4, Canada

    Kent Walker

  2. I.H. Asper School of Business, University of Manitoba, Winnipeg, MB, R3T 5V4, Canada

    Fang Wan

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  1. Kent Walker
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Correspondence to Kent Walker.

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Walker, K., Wan, F. The Harm of Symbolic Actions and Green-Washing: Corporate Actions and Communications on Environmental Performance and Their Financial Implications. J Bus Ethics 109, 227–242 (2012). https://doi.org/10.1007/s10551-011-1122-4

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