Sincere Action or Sweet Talk: How Do Firms Respond to Retail Investors' Green Appeals?
Saved in:
| Title: | Sincere Action or Sweet Talk: How Do Firms Respond to Retail Investors' Green Appeals? |
|---|---|
| Authors: | He, Ling1 (AUTHOR) heling_925@163.com, Hu, Shiyang2 (AUTHOR) hushiyang@cqu.edu.cn, Kong, Dongmin3 (AUTHOR) kongdm@mail.hust.edu.cn, Li, Xiao4 (AUTHOR) afxiaoli@cufe.edu.cn |
| Source: | Journal of Business Ethics. Oct2025, Vol. 201 Issue 1, p193-218. 26p. |
| Subject Terms: | Individual investors, Social responsibility of business, Ethical decision making, Greenwashing, Information asymmetry, Investor relations (Corporations) |
| Abstract: | With the rise in global awareness of sustainable transition, investor groups have become continuously engaged in pressuring firms to improve their environmental performance. However, there is limited knowledge about whether firms respond to these pressures through substantive actions or symbolic gestures. Based on the ethical decision-making framework, our study examines the relationship between retail investors' green appeals and corporate greenwashing. Our results show that retail investors' green appeals result in significant increases in corporate greenwashing, suggesting that firms are more inclined to adopt symbolic gestures in response to these investor aspirations. Meanwhile, we find that the information asymmetry and the short-term investment horizon of retail investors are two primary reasons for firms' adoption of greenwashing in response to retail investors' green appeals. This positive relationship is more pronounced in firms with opportunistic executives, financial constraints, weak environmental ethics, and without political connections. The consequences of greenwashing reveal that while corporate greenwashing behavior may receive positive market reactions in the short term, in the long term, regulators will recognize this behavior resulting in penalties for the firm. [ABSTRACT FROM AUTHOR] |
| Copyright of Journal of Business Ethics is the property of Springer Nature and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.) | |
| Database: | Education Research Complete |
|
Full text is not displayed to guests.
Login for full access.
|
|
| Abstract: | With the rise in global awareness of sustainable transition, investor groups have become continuously engaged in pressuring firms to improve their environmental performance. However, there is limited knowledge about whether firms respond to these pressures through substantive actions or symbolic gestures. Based on the ethical decision-making framework, our study examines the relationship between retail investors' green appeals and corporate greenwashing. Our results show that retail investors' green appeals result in significant increases in corporate greenwashing, suggesting that firms are more inclined to adopt symbolic gestures in response to these investor aspirations. Meanwhile, we find that the information asymmetry and the short-term investment horizon of retail investors are two primary reasons for firms' adoption of greenwashing in response to retail investors' green appeals. This positive relationship is more pronounced in firms with opportunistic executives, financial constraints, weak environmental ethics, and without political connections. The consequences of greenwashing reveal that while corporate greenwashing behavior may receive positive market reactions in the short term, in the long term, regulators will recognize this behavior resulting in penalties for the firm. [ABSTRACT FROM AUTHOR] |
|---|---|
| ISSN: | 01674544 |
| DOI: | 10.1007/s10551-025-06078-7 |
