{"id":65703,"date":"2020-05-08T13:00:08","date_gmt":"2020-05-08T17:00:08","guid":{"rendered":"https:\/\/brocku.ca\/brock-news\/?p=65703"},"modified":"2020-05-08T13:09:24","modified_gmt":"2020-05-08T17:09:24","slug":"goodman-profs-research-doesnt-whitewash-corporate-greenwashing","status":"publish","type":"post","link":"https:\/\/brocku.ca\/brock-news\/2020\/05\/goodman-profs-research-doesnt-whitewash-corporate-greenwashing\/","title":{"rendered":"Goodman prof\u2019s research doesn\u2019t whitewash corporate greenwashing"},"content":{"rendered":"<p><span data-contrast=\"none\">The amount of greenwashing by corporations has one <\/span><span data-contrast=\"none\">Goodman School of Business<\/span><span data-contrast=\"none\">\u00a0professor seeing red.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The practice of pretending to be socially responsible for the sake of the environment will only get worse as firms <\/span><span data-contrast=\"none\">clamour<\/span><span data-contrast=\"none\"> for consumer dollars, according to <\/span><span data-contrast=\"none\">Samir Trabelsi<\/span><span data-contrast=\"none\">, Accounting and Governance Professor, and founding Director of the CPA Ontario Research Excellence Centre.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">\u201cIt comes from the pressure on companies to have good performance when growth is slow,\u201d he said. \u201cGrowth opportunities are not very good right now, so companies are going to keep engaging in this because customers are looking for it.\u201d<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Greenwashing is the selective disclosure of positive information about a company&#8217;s environmental or social performance to create an overly positive corporate impression. Greenwashing is so widespread that <\/span><span data-contrast=\"none\">Trabelsi<\/span><span data-contrast=\"none\"> found <\/span><span data-contrast=\"none\">all of<\/span><span data-contrast=\"none\"> the 700 firms he studied between 2005 and 2015 made misleading claims about their environmental performance and benefits.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/X7fKvlxBb60\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p><span data-contrast=\"none\">His research, made possible by a <\/span><a href=\"https:\/\/brocku.ca\/brock-news\/2018\/06\/brock-awarded-1-6-million-in-sshrc-funding\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-contrast=\"none\">Social Sciences and Humanities Research Council (SSHRC) grant<\/span><\/a><span data-contrast=\"none\">, was inspired by his time as a visiting scholar at Hong Kong Polytechnic University. <\/span><span data-contrast=\"none\">Trabelsi<\/span><span data-contrast=\"none\"> noticed people were most likely to determine a company\u2019s level of corporate social responsibility simply by taking their word for it.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">\u201cI was puzzled by the way we were measuring social responsibility,\u201d <\/span><span data-contrast=\"none\">Trabelsi<\/span><span data-contrast=\"none\"> said. \u201cThe way we measure it is, if you say more about it, you\u2019re more socially responsible, without anyone checking whether it\u2019s true or not. Many companies are polluting the environment, yet they claim social responsibility. This is the puzzle \u2014 how do we capture this? What are the costs and benefits?\u201d<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The answer was there for anyone to find with a little digging, he said.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Trabelsi<\/span><span data-contrast=\"none\"> and his research partners from Hong Kong Polytechnic University and the University of Alberta measured greenwashing by computing the absolute disclosure ratio for each company.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">They tallied the number of polluting lines a business has, then determined how many of those were actually being reported. They calculated the damage caused by the reported polluting lines and divided that by the destruction created by all lines, including those that weren\u2019t reported, to get a dollar value for the damage caused.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">In most cases, companies did not report the value of the business arm creating the most pollution.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">\u201cThe information is out there, but the individual investor like me and you, we don\u2019t pay attention,\u201d said <\/span><span data-contrast=\"none\">Trabelsi<\/span><span data-contrast=\"none\">.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">All that lip service about being good stewards of the environment isn\u2019t just bad for the planet, he added, but terrible for companies who get caught. Businesses can face hefty fines, and the cost of financing for firms who engage in greenwashing will also be exorbitantly high.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">In addition, <\/span><span data-contrast=\"none\">Trabelsi<\/span><span data-contrast=\"none\"> and his fellow researchers found that the more optimistic a Chief Executive Officer (CEO) is, the more likely their company is to engage in greenwashing.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">\u201cWe also saw that media coverage and competition on the market reduce greenwashing,\u201d he said. \u201c<\/span><span data-contrast=\"none\">So<\/span><span data-contrast=\"none\"> when there is media coverage and the market is so competitive, it\u2019s unlikely firms will engage in greenwashing.\u201d<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">This is first of three studies <\/span><span data-contrast=\"none\">Trabelsi<\/span><span data-contrast=\"none\"> has planned to examine the phenomenon of firms faking their environmental benefits. He also wants to look at the relationship between greenwashing and insider trading, and whether companies that fudge their eco-friendly ways are \u201ccooking their books.\u201d<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Ultimately, he hopes the findings will inspire activists to strengthen their role in the fight against greenwashing. Tougher rules around social and environmental disclosure, <\/span><span data-contrast=\"none\">similar to<\/span><span data-contrast=\"none\"> those developing in Europe and Australia, are also essential to limit the practice, he added.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">\u201cThe market should sort out the lemons from the good cars,\u201d <\/span><span data-contrast=\"none\">Trabelsi<\/span><span data-contrast=\"none\"> said. \u201cFor that to happen, in terms of greenwashing, we need more regulations, tighter regulations.\u201d<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">As discouraging as his findings are about the state of corporate social responsibility, <\/span><span data-contrast=\"none\">Trabelsi<\/span><span data-contrast=\"none\"> is optimistic there are businesses doing right by the planet.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">\u201cThere are good companies out there,\u201d he said. \u201cBut who they are, we don\u2019t know yet.\u201d<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The amount of greenwashing by corporations has one Goodman School of Business\u00a0professor seeing red.\u00a0\u00a0<\/p>\n","protected":false},"author":13,"featured_media":65704,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[39,7,1,4,5],"tags":[594,8975,5415,2468],"_links":{"self":[{"href":"https:\/\/brocku.ca\/brock-news\/wp-json\/wp\/v2\/posts\/65703"}],"collection":[{"href":"https:\/\/brocku.ca\/brock-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/brocku.ca\/brock-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/brocku.ca\/brock-news\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/brocku.ca\/brock-news\/wp-json\/wp\/v2\/comments?post=65703"}],"version-history":[{"count":3,"href":"https:\/\/brocku.ca\/brock-news\/wp-json\/wp\/v2\/posts\/65703\/revisions"}],"predecessor-version":[{"id":65741,"href":"https:\/\/brocku.ca\/brock-news\/wp-json\/wp\/v2\/posts\/65703\/revisions\/65741"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/brocku.ca\/brock-news\/wp-json\/wp\/v2\/media\/65704"}],"wp:attachment":[{"href":"https:\/\/brocku.ca\/brock-news\/wp-json\/wp\/v2\/media?parent=65703"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/brocku.ca\/brock-news\/wp-json\/wp\/v2\/categories?post=65703"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/brocku.ca\/brock-news\/wp-json\/wp\/v2\/tags?post=65703"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}