Voluntary corporate environmental disclosure has increased significantly in the last decade. However, the increase in environmental disclosure has also been accompanied by the social questioning of its veracity. Previous studies have mainly focused on the determinant factors behind corporate decisions to disclose environmental data, with only limited consideration of both carbon performance and the veracity of the information disclosed. Based on an international sample of firms from 12 countries, this paper analyzes the impact of regulative pressures related to climate change on the likelihood of companies engaging in greenwashing. The results show that the number of regulations related to climate change negatively influences the propensity of firms to engage in greenwashing. Furthermore, firms in countries with stringent climate-related regulations are less likely to participate in greenwashing practices. This paper adds to the existing literature concerning greenwashing by demonstrating that institutional theory can deliver further insights into the explanation of corporate greenwashing behavior. This is the first study to incorporate international climate-related regulations into the analysis of corporate greenwashing. It also provides a new method for identifying greenwashing firms, based on their carbon performance and disclosure.
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