Greenwashing in the Corporate Sector—Do <scp>CEO</scp> Characteristics Matter?

Abstract

ABSTRACT The objective of this paper is to investigate the relationship between different CEO characteristics and the scale of greenwashing activism for a sample of 1476 U.S. firms listed on Standard and Poor's 1500 index over the years 2002–2023. Panel data regression results show that CEO age and tenure have a positive and significant impact on the scale of selective disclosure of environmental information. In contrast, companies run by female CEOs and offering CEO remuneration packages with a higher share of variable parts are characterized by a significantly lower scale of greenwashing activism. The empirical results also indicate that chief executive officer share ownership acts as a significant stimulator of the scale of the above activism among firms operating outside of the financial sector. Taken together, the proportion of the variable part in the overall salary of a CEO was the factor with the strongest negative effect on the scale of greenwashing, whereas CEO tenure had the strongest positive impact accordingly. The paper also proposes a new index measure of CEO propensity to greenwashing combining multiple CEO‐related attributes which can serve as a robust predictor of weaker environmental reporting mechanisms and more manipulative environmental behavior.

Affiliated Institutions

• EADA Business School ES

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