The Greenwashing Machine: is Csr More Than Communication?
Abstract: Corporate Social Responsibility (CSR) and advertising are strategic complements. However, it could be that communicating on CSR represents by itself a good strategy. If the claim about the environmental or social benefits of the product is unsubstantiated or misleading, this practice is known under the name of greenwashing (GW). If consumers do not discover there is no CSR, they may be attracted by a so-called CSR product because of the advertising. The model clearly identifies some ``usual suspects'' that will prefer GW over CSR. We then conduct an empirical analysis using data on CSR, economic data of the 500 largest European firms to test the predictions. Several instruments are used in order to estimate the propensity to prefer GW. We show that ``hard greenwashing'', i.e active communication with no CSR at all, is not a credible strategy and therefore propose the concept of ``light greenwashing'' that is empirically verified.