Greenwashing Measurement and Its Impact on Corporate Operational Performance

Publications
Review of Securities and Futures Markets (證券市場發展季刊), forthcoming (TSSCI)
Author

Wen-Chyan Ke, Pei-Ru Lo, Chang Chan, Calvin J. Chiou

Published

April 1, 2025

Abstract

Companies may adopt greenwashing strategies to cultivate a sustainable corporate image. This study uses data from publicly listed companies in Taiwan between 2019 and 2023 and conducts empirical analysis based on the Taiwan Sustainability Rating database, jointly developed by National Taipei University and Taiwan Index Plus Corporation. Disclosed ESG-related actions are classified into symbolic and substantive actions to construct a firm-level greenwashing indicator. The overall greenwashing score is further decomposed into two dimensions: the exaggeration score, which measure the extent to symbolic actions exceed substantive actions, and the silence score, which reflects the reverse. Empirical findings present a negative relationship between greenwashing and operating performance. These results validate the applicability of the greenwashing measure proposed in this study, and suggesting that both substantive improvements in governance and a restrained, consistent approach to sustainability disclosure contribute meaningfully to better operating performance.

Keywords

Greenwashing, Corporate Governance, Operating Performance

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