Working Paper | HBS Working Paper Series | 2015

Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing

by Christopher Marquis, Michael W. Toffel and Yanhua Zhou


Under increased pressure to report environmental impacts, some firms selectively disclose relatively benign impacts, creating an impression of transparency while masking their true performance. We identify key company- and country-level factors that limit firms' use of selective disclosure by intensifying scrutiny on them and by diffusing global norms to their headquarters countries. We test our hypotheses using a novel panel dataset of 4,750 public companies across many industries and headquartered in 45 countries during 2004-2007. Results show that firms that are more environmentally damaging, particularly those in countries where they are more exposed to scrutiny and global norms, are less likely to engage in selective disclosure. We discuss contributions to the literature that spans institutional theory and strategic management and to the literature on information disclosure.

Keywords: disclosure strategy; disclosure; environmental performance; environmental strategy; environment; symbolic; reporting; Integrated Corporate Reporting; Globalization; Corporate Accountability; Corporate Disclosure; Governance Compliance; Management Practices and Processes; Organizational Change and Adaptation; Business and Government Relations; Environmental Sustainability;


Marquis, Christopher, Michael W. Toffel, and Yanhua Zhou. "Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing." Harvard Business School Working Paper, No. 11-115, May 2011. (Revised July 2015. Formerly titled "When Do Firms Greenwash? Corporate Visibility, Civil Society Scrutiny, and Environmental Disclosure.")