Sustainability or profitability? How communicated motives for environmental policy affect public perceptions of corporate greenwashing

Abstract

Companies in the energy sector face a dilemma regarding how to communicate their environmental policies to the public. Communicating that environmental policies and activities are motivated by concern for the environment could elicit positive reactions, but may also lead to accusations of corporate greenwashing – the idea that companies deliberately frame their activities as ‘green’ in order to look environmentally friendly. The results of three experiments demonstrate that people easily suspect greenwashing when an energy company invests in environmental measures. Importantly, suspicions of corporate greenwashing are reduced by acknowledging economic motives instead of communicating environmental motives for such investments. Suspicion of strategic organizational behavior mediates the effect of communicated motive on perceived corporate greenwashing. This indirect effect occurs primarily among people who are not by nature very skeptical about organizational communications in general. These findings highlight the need to think carefully about how to communicate corporate environmental policies to the public.