Msc. Chantal Lucinda Theresia Cremers Student number: 10002142
Final version – August 31, 2015
MSc. in Business Administration – Marketing Track University of Amsterdam
Supervisor: Dr. Lars Moratis
Green(washing) is good
An exploratory study into the willingness of CSR
managers to engage in greenwashing practices
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STATEMENT OF ORIGINALITY
This document is written by student Chantal Cremers who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
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ACKNOWLEDGEMENT
With the completion of this Master Thesis, I have reached the final step of my Master Business Administration at the University of Amsterdam.While this is not the first time I have written a Master Thesis, given that I wrote one to finalize my Master Corporate Communication in 2014, the current qualitative research has been an interesting learning experience for me. This new research challenged me to gain new insights into the sensitive greenwashing issue that has become topical given the increasing importance placed on Corporate Social Responsibility (CSR) in society.
Hereby, I would like to take the opportunity to thank my supervisor Mr. Dr. Lars Moratis for his feedback and tips during the writing of my thesis. His enormous network of CSR
managers gave me the opportunity to interview very interesting and inspiring people who are experts in the field of CSR. I am very thankful to all these CSR managers who were willing to participate in my research and gave me their openness during the interviews about the
sensitive topic ‘greenwashing’. Furthermore, I would like to thank my family and friends who supported me through the whole process of writing a Master Thesis and did not give up their faith in me.
I hope you will enjoy reading this Master Thesis that gives new insights into the positive effects of greenwashing.
Kind regards,
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TABLE OF CONTENTS
ABSTRACT………. 5
1. INTRODUCTION……… 6
2. LITERATURE REVIEW……….. 13
2.1 Corporate Social Responsibility……….…. 13
2.1.1. CSR definition and strategies……….. 13
2.1.2. CSR communication……… 14
2.2 Greenwashing………. 15
2.2.1. Definition and essence of greenwashing………. 15
2.2.2. Types of greenwashing……… 16
2.3 CSR as aspirational talk……….. 19
2.3.1. Essence of CSR as aspirational talk……… 19
2.3.2. Positive effects of hypocrisy as aspiration………... 21
2.3.3. Positive effects of other greenwashing types……… 23
2.4. Influencers of greenwashing decision………... 26
2.4.1. CSR development stage of organization………... 27
2.4.2. CSR orientation of organization………... 30
2.4.3. Employees’ personal and CSR beliefs……….. 34
2.4.4. Sector of operation………... 37
3. METHODOLOGY………... 42
3.1 Research method and sample……… 42
3.2 Research procedure………... 44
3.3 Data analysis………... 47
4. RESULTS………..……… 49
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4.2 CSR as aspirational talk……….…. 52
4.3 Willingness to greenwash………... 56
4.4 Influencers of greenwashing choice……….……... 61
4.4.1. CSR development stage of organization……….. 61
4.4.2. CSR orientation of organization……….. 64
4.4.3. Employees’ personal and CSR beliefs………. 66
4.4.4. Sector of operation………... 71
5. DISCUSSION AND CONCLUSION……….……… 75
5.1 Research question and contribution………... 75
5.2 Discussion of results………...……. 76
5.2.1. CSR as aspirational talk………...…… 76
5.2.2. Willingness to greenwash………. 79
5.2.3. Influencers of willingness to greenwash………... 81
5.3 Overall conclusion……….... 84
5.4 Limitations and future research……… 85
5.5 Managerial and Theoretical implications………. 88
6. REFERENCES……… 91
7. APPENDICES……….. 98
7.1 Interview guide………. 98
7.2 Codes and themes………. 103
TABLE OF FIGURES Figure 1. Types of greenwashing……….. 19
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ABSTRACT
Over the past decades, internal and external stakeholders have become increasingly interested in the Corporate Social Responsibility (CSR) of organizations. CSR managers face the
challenge to position their organization as a sustainable contributor to society. However, organizations’ communicated CSR initiatives are not always in line with their actual CSR behavior, which can be labeled as greenwashing. The current research contributes to the existing CSR and greenwashing literature by making a distinction of four types of
greenwashing: ‘pure greenwashing’, ‘green-highlighting’, ‘greywashing’ and the new type ‘CSR as aspirational talk’. Although greenwashing is generally considered to be harmful for the organization, the current research investigates whether greenwashing, and in particular if CSR as aspirational talk, can also be beneficial for the organization. It is the first research that empirically tests this new perspective on greenwashing, which assumes that by
communicating CSR intentions to the public, even when these are not yet supported by real actions, the employees can be motivated to achieve these intentions which, in turn, will improve the organization’s CSR standards. Additionally, this research contributes to the existing greenwashing literature by hypothesizing that the willingness to use different types of greenwashing is influenced by the organization’s CSR development stage, its CSR
orientation, the sector of operation, and the employees’ personal/CSR beliefs. Thirty-three CSR managers of organizations that are a member of a well-known Dutch CSR network were interviewed. Based on these interviews it can be concluded that the CSR managers
acknowledge the positive perspective on CSR and are willing to use CSR as aspirational talk. They are also willing to use pure greenwashing, green-highlighting, and greywashing.
However, this willingness is influenced by the organization's CSR development stage, its CSR orientation, its sector of operation, and the personal/CSR beliefs of its employees.
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1. INTRODUCTION
In the recent years, especially since the 1970s, more and more stakeholders, such as
consumers and investors, want organizations to behave environmentally friendly and ask for green products (Vos, 2014). That ethical consumerism has become very popular in today’s market can be supported by the fact that eighty-three percent of consumers says to think about the green reputation of the organization while shopping (Gillespie, 2008). Therefore,
positioning the organization as a sustainable one, which takes care of the society and
environment, has become increasingly important. Corporate Social Responsibility (CSR) can be defined as the responsibility organizations take for the impact of their business on
environmental, societal and economic dimensions (Werre, 2003). Organizations have to communicate about their commitment to and fit with a specific CSR issue, how they can have influence on this CSR issue, and more importantly, what their motives to pay attention to this CSR issue are. By communicating this, the organization can reduce the stakeholders’
skepticism towards its CSR initiatives and it can show the favorable corporate motives in the CSR activities (Du, Bhattacharya, & Sen, 2010). Summarized, the organization’s CSR communication is necessary to realize the benefits of CSR.
Organizations communicate about CSR activities in order to realize benefits for themselves. However, some organizations do not engage in these CSR activities or they do so in a limited amount. This can lead to greenwashing of their CSR activities (Delmas & Burbano,
2011).This greenwashing happens in many organizations and can be defined as disinformation, which is disseminated by an organization in order to present an
environmentally responsible public image (Oxford English Dictionary, 2003, in: Banerjee, 2008, p. 674). Another common description of greenwashing is that of Laufer (2003) who
7 described it as disinformation regarding social reporting initiatives given by organizations to maximize the perceptions of the organization’s legitimacy and improve the organization’s image and relationship with its stakeholders. Therefore, when an organization claims to behave responsibly towards the environment and society but its practices do not support this claim, the organization can be accused of greenwashing. Mainstream thoughts about
greenwashing, which is about misleading, lying to and swindle the organization’s stakeholders, are that this is harmful to the organization. For example, greenwashing can diminish employees’ organizational trust, which negatively affects their identification with the organization and the overall relationship between these stakeholders and the organization (Dunford, Jackson, Boss, Tay, & Boss, 2014).
However, decoupling of words and actions need not necessarily be solely negative and can even improve the organization’s CSR. This is a new perspective on the effects of a
misalignment between the organization’s CSR policy/claim and the organization’s CSR practices (Bromley, & Powell, 2012). Christensen, Morsing and Thyssen (2013) laid the foundations for this new and positive perspective on greenwashing. They mention that a discrepancy between words and actions is not always a bad thing and can even improve the organization’s CSR goals, standards, and practices. When an organization communicates its CSR ideals and intentions, even when these are not yet supported by actions, this can motivate its employees to implement these CSR strategies and fulfill the organization’s promises. Essential hereby is that the ambitions are communicated to the public, so that the external stakeholders can criticize the organization and its employees or ask them for clarification when these ambitions are not supported by real actions. Hypocrisy as aspiration – due to a discrepancy between green talk and walk – is not harmful in this situation, but rather an important driver to create organizational change. This assumption is called ‘CSR as
8 aspirational talk’. Although, Christensen and colleagues (2013) laid the foundations for this new perspective, it has not yet been tested empirically. Therefore, this research will elaborate on this new perspective on greenwashing thereby contributing to science in obtaining more clarity about the benefits of greenwashing compared to its harms (Lyon & Montgomery, 2015). More specifically, this research will examine empirically whether CSR managers see a potential in greenwashing, in particular CSR as aspirational talk, rather than the risks and whether they are willing to use it. The fact that greenwashing is a very sensitive topic, especially for CSR managers, makes this research very challenging, yet more interesting.
To investigate whether CSR managers are willing to greenwash their organization’s CSR initiatives, four types of greenwashing will be distinguished. While the four types of
greenwashing have all been discussed in the existing literature separately, no research has yet investigated all four types collectively. Previous research has often used greenwashing as an umbrella term for misleading communication. However, Lyon and Montgomery (2015) argue that thinking in terms of ‘varieties of greenwashing’ is more effective when studying its effects. The two types ‘pure greenwashing’ and ‘green-highlighting’ derive from research by Walker and Wan (2012). In their research, pure greenwashing is defined as the organization’s conscious lying about its CSR activities. Green-highlighting is described as embellish the CSR initiatives, selectively communicating about the CSR initiatives or communicating future CSR activities of the organization next to the current CSR activities. The third and new type, ‘CSR as aspirational talk’, is discussed by Christensen and colleagues (2013). It encompasses a situation in which the organization’s communication focuses on future CSR
intentions/ideals and conceals its eventual current CSR activities. The fourth type,
‘greywashing’, is not commonly used in science yet it is often used in practice. While not using the term ‘greywashing’ explicitly, Furlow (2009) refers to it by describing it as the
9 concealment of CSR practices in the organization’s communication. So, the current research will empirically test whether CSR managers are willing to use any of the four types of greenwashing mentioned above, especially the type ‘CSR as aspirational talk’, after being confronted with the new and positive perspective on greenwashing as proposed by
Christensen and colleagues (2013).
Just as the willingness to implement CSR, the willingness to greenwash is expected to be influenced by different factors. A review of the extant CSR literature provided four factors that are often linked to the choice of implementing CSR. These factors are the organization’s CSR development stage, its CSR orientation, the organization’s sector of operation, and its employees’ personal/CSR beliefs. In this research, the influence of these factors on the implementation of greenwashing will also be tested. It is expected that organizations in an early phase of CSR implementation (Miller, & Serafeim, 2014) and organizations that mainly focus on the CSR costs in combination with narrow responsibilities will be more likely to greenwash (Jamali, Sidani, & El-Asmar, 2009). Additionally, an organization that operates in a sector with many competitors who have implemented CSR or an organization that has a workforce of employees who find CSR unimportant are expected to have a higher willingness to greenwash.
Summarized, this research will investigate the new and positive academic perspective on greenwashing, and especially whether business professionals also see the potential positive influence of greenwashing on the organization. For the first time, greenwashing will hereby be categorized by the four types: pure greenwashing, green-highlighting, greywashing, and the new type CSR as aspirational talk. Moreover, four circumstances that influence the CSR choice – the CSR development phase, the CSR orientation of the organization/employees, and
10 the sector of operation - will be taken into account when investigating the CSR manager’s willingness to greenwash. This leads to the following research question:
‘Are CSR managers willing to use greenwashing, in particular CSR as aspirational talk, and how is this influenced by the CSR development phase, the CSR orientation of the organization and its employees, and the sector of operation?’
CSR managers of thirty-three well-known and large companies in The Netherlands, who are part of a Dutch CSR network, are interviewed to get an answer to this research question.The method chosen for this research is of qualitative nature, given the sensitivity and difficulty of the greenwashing topic.
This research contributes to the existing CSR and greenwashing literature in several ways. The main contribution is that it fulfills the suggestion for future research given by
Christensen, Morsing and Thyssen (2013) to empirically test their new and positive perspective on greenwashing called ‘CSR as aspirational talk’. Furthermore, this research contributes to science by shedding more light on whether the benefits of greenwashing can outweigh its harms (Lyon, & Montgomery, 2015). Besides empirically testing the willingness of CSR managers to use ‘CSR as aspirational talk’, the willingness to use other types of greenwashing is also tested empirically. Additionally, this research is the first one to divide the concept of greenwashing into four types: pure greenwashing, green-highlighting, greywashing and CSR as aspirational talk. By doing this, the current research responds to Lyon and Montgomery's (2015) recommendations to stop with the use of the umbrella term ‘greenwashing’ and make a distinction on the various ways in which greenwashing occurs. Moreover, this research contributes to science by empirically exploring how different factors
11 that mainly influence the organization’s choice to implement CSR also affect the choice to implement greenwashing. This research also contributes to business practices, given the increasing external pressure put on organizations to communicate about the CSR activities and organizations’ caution in doing so as to not be accused of greenwashing. If the new and positive perspective on greenwashing is confirmed, this can encourage organizations to be less reserved and to communicate their CSR ambitions to fulfill their external stakeholders’ expectations. Discrepancy between the CSR claims of the organization and its CSR practices can then be beneficial for the CSR development of the organization instead of being harmful. Furthermore, this research does not only provide a general conclusion about the usefulness of CSR as aspirational talk and the other three types of greenwashing, it also provides insight into the circumstances CSR development stage of organization, CSR orientation of
organization, sector of operation and employees’ personal/CSR beliefs - in which different types of greenwashing are an effective business strategy.
This Master Thesis is further structured as followed: firstly, an overview of the key concepts- CSR and greenwashing - is given. The three greenwashing types: ‘pure greenwashing’, ‘green-highlighting’ and ‘greywashing’ also the new and positive type of greenwashing ‘CSR as aspirational talk’ will be described more in detail. Also the positive effects of these four greenwashing types and the willingness of CSR managers to use them will be discussed. Next to this, there will be explained how the four circumstances: CSR development stage and CSR orientation of the organization, personal and CSR beliefs of the employees, and the sector of operation can probably affect the willingness of the CSR managers to use a specific type of greenwashing. Concluding the literature review, hypotheses and a conceptual framework based on previous research are presented. After this, the research method, as well as the sample, the procedure and the data analysis are discussed. In the chapter that follows the
12 results obtained from the analyzed interviews with CSR managers will be discussed. Lastly, an overall conclusion is given and the empirical findings are discussed. Additionally, the limitations of the current research, suggestions for further research, and the theoretical and managerial implications are discussed.
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2. LITERATURE REVIEW
2.1 Corporate Social Responsibility 2.1.1. CSR definition and strategies
Until the 1960s the goal of business was to make as much profit as possible for the organization itself and its shareholders. Doing well to the environment was seen as unnecessary cost that decreased profits (Friedman, 1962, in: Pinkston, & Carroll, 1996, p. 199). In the past, only a few companies faced their responsibility and donated some money to charity organizations, which is known as philanthropy (Jamali, Sidani, & El-Asmar, 2009). However, nowadays Corporate Social Responsibility (CSR) has become more important for business. Organizations integrate CSR goals into their business strategies and relate these CSR goals to their values and core competences (Van de Ven, 2008). CSR can be defined as the strategic choice of the organization to take responsibility for the impact of its business on environmental, societal and economic dimensions (Werre, 2003). Where CSR started as a business tool implemented by a few organizations to distinguish themselves, it is nowadays a standard practice for many organizations (Illia, Zyglidopoulos, Romenti, Rodriguez-Cánovas, & González del Valle Brena, 2013). Organizations develop internal and external green
strategies. An example of an internal green strategy is developing or adapting products that need less materials and energy to be produced or use alternative products that are more sustainable. The external green strategies focus more on the long-term sustainability of the products, for example, how the production process can be improved to diminish the impact on the environment. Some of these new strategies require large investments, but can be beneficial in the long term because they improve the competitiveness of the organization or waste less material and energy (Cronin, Smith, Gleim, Ramirez, & Dawn Martinez, 2011).
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2.1.2. CSR communication
If the organization wants to prove the quality of its CSR and gain the benefits that CSR can effectuate, it is necessary for the organization to communicate about its CSR initiatives. It is only by communicating the organizational CSR commitment, the CSR motives and how the organization can have a positive influence on the environment and society, that the
organizational benefits of CSR can be realized (Du, Bhattacharya, & Sen, 2010). The reason for this is that by communicating, the skepticism of stakeholders towards the organization’s CSR initiatives can be taken away and the favorable corporate motives in the CSR activities of the organization will be understood. Therefore, managers are wrong if they think that they cannot communicate the CSR policies and activities of the organization because it would be too complex for stakeholders to understand. Namely, many stakeholders are capable enough to understand this CSR communication and even have a growing interest in the CSR activities and CSR performances organizations (Illia, Zyglidopoulos, Romenti, Rodriguez-Cánovas, & González del Valle Brena, 2013). Illia and colleagues (2013) propose that it is important that not only the CSR or the communication department communicates the organizations’ CSR policies and activities, as has often happened in the past, but that CSR is implemented and communicated by the entire organization irrespective of the department. The whole organization must be aligned according to the CSR message. Many organizations do not solely communicate their CSR activities in the media, but do so in other sources like annual reports and the organization’s website as well (Alves, 2009). Some organizations, especially the ones that score high on CSR and put much effort in improving their CSR, even report information about their CSR voluntary in specific public CSR-reports (Mahoney, Thorne, Cecil, & LaGore, 2013).
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2.2 Greenwashing
2.2.1. Definition and essence of greenwashing
Communication about the organization’s CSR initiatives is thus indispensable if the
organization wants to create the sustainable image that is necessary to survive in its business and for creating business opportunities. Over the past decades, stakeholders such as
consumers, investors, competitors, and the media have put high pressure on organizations to communicate their environmental and societal responsibilities (Vos, 2014). However, for some organizations claiming to be social and environmental responsible is much easier than actually implementing CSR initiatives. When the organization communicates CSR claims but does not follow them up with real actions, it can be accused of greenwashing. Since 1990, when environmentalist David Bellamy used the term ‘greenwashing’ for the first time, it has become increasingly popular (Gillespie, 2008). Greenwashing can be defined as
“disinformation which is disseminated by an organization so as to present an environmentally responsible public image” (Oxford English Dictionary, 2003, in: Banerjee, 2008, p. 674). Walker and Wan (2012) defined greenwashing not as disinformation, but as symbolic organizational information that is not underpinned with substantive actions. A more detailed definition is: greenwashing is about the organization using environmental rhetoric information to improve its sales and its image, while still harming the environment, not fulfilling the green promises that are made or not investing in protecting the environment, the welfare of the society and the employees of the organization (Cherry, & Sneirson, 2011). Summarized, despite the fact that there are different definitions of greenwashing the principle is the same, namely that the organization’s CSR policy is not supported by the daily organizational actions, which are necessary to achieve the intended CSR outcomes. Therefore, there is decoupling of CSR words and actions, which means that they are not aligned with each other (Bromley, & Powell, 2012).
16 Delmas and Burbano (2011) propose that greenwashing can be driven by three factors:
external (institutional/non-market and market), organizational and individual drivers. External institutional drivers can be lax and uncertain regulations regarding to the environment, which make publishing incorrect information possible and pressure from activists, NGO’s and the media. External non-market drivers that cause greenwashing are, for example, high
competitiveness in the industry in which the organization operates or pressure from investors who only want to invest money in green companies. Next to the non-market and market external drivers, organizational drivers can cause greenwashing too (Delmas, & Burbano, 2011). Organizational drivers can be firm characteristics like the size of the organization, an ethical climate that is not that strong and does not punish unethical behavior, organization’s inertia whereby realizing the intentions takes (too) much time and ineffectiveness of intra-firm communication i.e. the communication department communicates about a new
sustainable package, but the development department is still busy developing it. Lastly, also individual psychological drivers can be determinants of greenwashing (Delmas, & Burbano, 2011). For example, employees’ optimistic bias whereby they overestimate the likelihood of positive events and underestimate the negative events, and narrow decision framing whereby CSR is only improved in the short term and not in the long term.Another individual
psychological driver is hyperbolic inter-temporal discounting, which can be described as a gap between the long-term goals and the short-term behavior of the organization.
2.2.2. Types of greenwashing
Discrepancy between the communicated CSR intentions and the real CSR actions can also be defined as hypocrisy. Brunsson (1993) originally described hypocrisy as communication about the solution of a problem whereby this communication does not lead to the
17 corresponding actions to solve the problem. Based on the discrepancy between words and actions, hypocrisy, different greenwashing types can be distinguished.
Walker and Wan (2012) distinguish symbolic actions (green talk) and substantive actions (green walk) that are both used to acquire legitimacy among stakeholders. Symbolic actions can be seen as information/promises for the future given by the organization that have to show how responsible the organization is towards the environment and society. On the other hand, substantive actions are not about the information, but about the real practices that prove the organization’s responsibility towards the environment and society. Based on this distinction between symbolic and substantive actions, Walker and Wan (2012) divide greenwashing into two types. The first type is ‘pure greenwashing’ and is defined as the strategy of the
organization to communicate symbolically about environmental issues without supporting them with substantive actions. Therefore, there is discrepancy between the green walk and green talk of the organization, because the green walk does not support the green talk. The second type is ‘green-highlighting’, which means that the organization communicates its current responsibility for the environment - the substantive actions - but also communicates the plans about how the organization will take its responsibility in the future, meaning the symbolic actions. Additionally, substantive actions are described more favorably in the green talk than they really are or get a disproportional amount of attention in comparison to non-CSR activities. The main difference between these two types of greenwashing is the (mis)alignment between the symbolic actions and the substantive actions. The two
greenwashing types mentioned by Walker and Wan (2012) can be expanded with a third type of greenwashing called ‘greywashing’, which is often used in organizations. Greywashing means that, although the organization behaves responsibly towards the environment and society, it does not communicate these CSR initiatives. So, also in this type of greenwashing
18 the CSR actions are not in line with the CSR claims of the organization, because the
organization does not claim anything about its actions. Greywashing has become more common because of organizations’ increasing fear to be accused of greenwashing when their CSR activities do not completely meet the expectations of stakeholders (Furlow, 2009). Based on the research by Christensen, Morsing and Thyssen (2013) a fourth type of greenwashing is distinguished, namely CSR as aspirational talk. This ‘CSR as aspirational talk’ can be defined as an organization's CSR communication in which the CSR intentions and ideals for the future are central instead of the current CSR behavior.’ Thus, also in this case hypocrisy is central, because the communicated CSR intentions are not yet supported by real actions.
In conclusion, pure greenwashing is characterized by CSR claims that are not supported by CSR actions at all, while green-highlighting is characterized by CSR claims that are partially supported by CSR actions. Green-highlighting involves selective communication of real CSR actions and sometimes also about CSR actions planned for the near future. On the other hand, CSR as aspirational talk consists of CSR claims that focus solely on CSR intentions while current CSR initiatives are concealed. When the organization uses greywashing it conceals all its current and potential future CSR initiatives. There is no communication about the CSR activities, while the organization does engage in these CSR activities. The current research about CSR managers’ willingness to greenwash will be the first research that takes these four types of greenwashing – whereby words and actions are not aligned – all together into account (Figure 1).
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Figure 1. Types of greenwashing
2.3 CSR as aspirational talk
2.3.1. Essence of CSR as aspirational talk
The fourth type of greenwashing called ‘CSR as aspirational talk’ comes from the research of Christensen, Morsing and Thyssen (2013). They defined ‘CSR as aspirational talk’ as
communication of the organization about its CSR in which the intentions and ideals for the future are central instead of the current CSR behavior. Where many previous studies discuss the harmfulness of hypocrisy and thus greenwashing, the new type of greenwashing can be seen as something positive that can improve the CSR standards of the organization
(Christensen, Morsing, & Thyssen, 2013). This is a very remarkable and new perspective on greenwashing, which can change the common negative perspective on greenwashing.
The starting point of the aspirational talk function of CSR is that all the communication of organizations, regardless of the subject, is about intentions and ideals to gain legitimacy for
20 the organization (Kolk, 2003). However, this view on CSR in which communicating about what the organization will do to improve the environment and society is central, differs from the traditional view on CSR. In the traditional view on CSR, doing good to the environment and society instead of communicating about it is most important (Aras, & Crowther, 2009). Communication is performative which means that by communicating the intentions and ideals to give sense to the constantly evolving CSR, organizations set down the standards and
strategies to which they have to comply. They set the direction for their actions (Christensen, Morsing, & Thyssen, 2013). This assumption is in line with the perspective ‘Communication as Constitutive of Organization (CCO)’. The starting point of this CCO-perspective is that the way in which organizations communicate about themselves and their environment are
activities that create and develop the organizational reality. If there is no communication about the organization’s activities, intentions and decision, then the organization does not exist. As mentioned before, this also applies to the organization’s CSR, when there is no communication about the CSR, it does not exist (Christensen, Morsing, & Thyssen, 2013). The CCO-perspective can be linked to Luhmann’s ‘System Theory’, which posits that organizations produce and reproduce themselves by interconnected communication around their decisions. Organizations move themselves towards new goals and practices by referring each decision, although not always completely implemented in their business, to another decision (Luhmann, 2000, in: Christensen, Morsing, & Thyssen, 2013, p. 5). Noteworthy is that Luhmann’s System Theory originally focused on decisions that play an important role in the communicative constitution of organizations, while Christensen, Morsing and Thyssen (2013) discussed aspirational talk as an important factor to constitute organizations via communication (Schoeneborn, & Blaschke, 2014). In other words, communication and actions always come together. Communication is necessary to make decisions and these decisions lead to actions. Thus, when an organization communicates its CSR ideals and
21 intentions, this is already an action because without this communication it could not be
implemented in the organization and society (Christensen, Morsing, & Thyssen, 2013).
H1 The use of aspirational talk is necessary if the organization wants to develop and
improve its Corporate Social Responsibility
2.3.2. Positive effects of hypocrisy as aspiration
Christensen, Morsing and Thyssen (2013) mention that organizations have to communicate about their intentions, decisions, and activities to acquire the right to exist. However, the intentions communicated by the organization cannot always be (immediately) converted into actions, which in turn could be called ‘hypocrisy’ and could be seen as greenwashing. Walker and Wan (2012) conclude that this discrepancy between the green talk (communicated CSR intentions) and the green walk (current CSR actions) is harmful for an organization. They conclude that when the symbolic actions are not backed with substantive actions
(greenwashing), the financial performance of the organization will decrease. Dunford, Jackson, Boss, Tay and Boss (2014) also show that employees who noticed that they and the third parties are treated in an incorrect way, for example, when they are victims of
communicated CSR claims that are not backed up with actions, this harms the organizational trust. This can lead to a decreasing organizational identification of the employees. Therefore, a discrepancy between the words and actions of the organization, hypocrisy, has negative effects for the organization. However, Brunsson (1993) on the other hand mentioned that this hypocrisy can also be beneficial for the organization.
To understand this assumption it is important to discuss hypocrisy in more detail. Hypocrisy can be divided into two types namely: ‘hypocrisy as duplicity’ and ‘hypocrisy as aspiration’
22 (Christensen, Morsing, & Thyssen, 2013). ‘Hypocrisy as duplicity’ is equal to lying and hiding the truth behind a green story. This type of hypocrisy can lead to cynicism. ‘Hypocrisy as aspiration’ means that the organization acts and communicates as if the desired future already exists (idealization) in order to motivate the organization and, for example, the stakeholder to participate in the CSR practices. While this type of hypocrisy does not lead to cynicism, it does lead to motivation. In their communication, managers often prefer to focus on how the current situation should be (idealization), rather than it actually is because the truth can demotivate stakeholders to reach the desired future (Christensen, & Cheney, 2000, in: Christensen, Morsing, & Thyssen, 2013, p. 9).
Besides the fact that ‘hypocrisy as aspiration’ is a motivator for stakeholders to participate in the organization’s CSR practices, given that the manager has illustrated the desired future, hypocrisy as aspiration can also motivate stakeholders in another way. Namely, when a (CSR) manager communicates the organization’s CSR intentions to the public, the intentions are more binding. The public will pressurize the organization to fulfill its promises, which pushes the organization towards improved organizational CSR standards (Christensen, Morsing, & Thyssen, 2013). In conclusion, CSR as aspirational talk can be seen as a positive type of greenwashing, because by communicating the intentions to the public, which are not yet supported by actions, the employees will be motivated to really fulfill these promises the organization made. This will improve the organization’s CSR standards. Regarding this new perspective on greenwashing, it is expected that CSR managers are willing to use CSR as aspirational talk:
H2 CSR managers are willing to show more courage by communicating CSR intentions to
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2.3.3. Positive effects of other greenwashing types
While Christensen, Morsing and Thyssen’s (2013) research is the first one to discuss the positive effects of ‘CSR as aspirational talk’, there are some other studies that besides mention the positive effects of different types of greenwashing as well. However, the current research is the first one to empirically test the positive view on the greenwashing type ‘CSR as aspirational talk’ as discussed by Christensen and colleagues (2013). Additionally, this research investigates whether this positive view on greenwashing is applicable for the other three types, namely pure greenwashing, green-highlighting and greywashing.
In their research, Walker and Wan (2012) concluded that ‘pure greenwashing’ has a negative effect on the financial performances. This, however, is counter-argued by Gräuler and
Teuteberg (2014), who concluded that greenwashing is often not detected and for this reason does not have negative consequences for the organization. Another research by Wagner, Lutz and Weitz (2009) concluded that organizations that use a pro-active communication strategy whereby their CSR statements are contradicted by the observed behavior that follows, leads to a higher level of discrepancy than reactive communication. Regarding the reactive
communication strategy, the observed behavior comes before the CSR statements of the organization. The discrepancy, which causes negative consequences such as a negative consumer attitude towards the organization, can be minimized in both the pro-active and reactive communication strategies when the inoculation communication strategy is used (Wagner, Lutz, & Weitz, 2009). The inoculation theory in combination with the pro-active communication strategy means the following. When the organization launches a positive CSR statement and thereafter communicates another CSR claim that prepares the stakeholders for a future corporate irresponsibility accompanied by a refutation, this diminishes the discrepancy between the words and actions. This leads to less negative consequences. The inoculation
24 theory applied to the reactive communication strategy means that the organization reacts on its negative CSR behavior by communicating positive CSR claims (Wagner, Lutz, & Weitz, 2009). In conclusion, greenwashing, the discrepancy between words and actions, is not that harmful when the organization applies the inoculation theory in its communication towards stakeholders. These findings and Gräuler and Teuteberg’s (2014) view that greenwashing is solely harmful when it is noticed by the receivers can probably positively affect the CSR manager’s willingness to use pure greenwashing:
H3a CSR managers are willing to use pure greenwashing in their communication towards
stakeholders whereby the CSR claims are not at all supported by CSR actions
Although Walker and Wan (2012) found a negative effect of pure greenwashing on the organization's financial performance, they did not find an effect of green-highlighting on the financial performance. It is noteworthy that on forehand they expected a positive effect of green-highlighting on financial performance. This positive effect was expected, because the symbolic actions are partially supported by substantive actions, which shows the
environmental and social responsibility of the organization. Another reason why
green-highlighting was expected to increase the financial performance of the organization is because the current substantive actions, in combination with the planned future substantive actions, can also show the (future) organizational commitment towards the environment and society. Research by Bazillier and Vauday (2013) mentions that ‘light greenwashing’ or in other terms ‘green-highlighting’, whereby the organization has some vague evidence for its CSR claims, can be beneficial for the organization’s CSR. Namely, when this ‘light greenwashing’ is combined with a high level of CSR in the organization, it can improve the organization’s green image without an extra CSR investment of the organization. So, previous research
25 shows a neutral effect and a positive effect of green-highlighting. For this reason, it is
expected that CSR managers are willing to use green-highlighting whereby they can strive to twist the neutral effect on the financial performance into a positive effect as well:
H3b CSR managers are willing to use green-highlighting in their communication towards
stakeholders whereby they embellish the current organization’s CSR activities and also focus on the organization’s future CSR activities
Besides the effects of pure greenwashing and green-highlighting on the organization, greywashing can also have an effect on the organization. Many organizations promote their businesses, products, and services as environmentally friendly. However, it happens more often that these CSR claims are vague, incomplete or incorrect which can be labeled as greenwashing. For this reason, the organization's stakeholders, such as consumers, investors, the media, and activists have become skeptical towards these claims and their cynicism amongst ‘green’ organizations is rising. The greenwashing activities of irresponsible organizations can negatively affect the good intentions and the fair CSR communication of responsible organizations. In turn, this leads to organizations not communicating their CSR activities anymore to avoid being accused of greenwashing when the organization’s CSR activities do not fully meet stakeholders’ expectations (Furlow, 2009). Given that
greywashing can have neutral or maybe even positive effects for the organization, one can expect CSR managers to be willing to use this type of green washing.
H3c CSR managers are willing to use greywashing whereby they conceal the
26
2.4 Influencers of greenwashing decision
Many studies have focused on the different factors that affect the organization’s choice to implement CSR in their business practices. A review of these studies shows that the factors most frequently linked to the CSR choice are: the CSR development stage of the organization, the CSR orientation of the organization, the personal/CSR beliefs of the employees, and the sector/industry in which the organization operates. While few studies have linked these factors to the organization’s choice to greenwash, this research expects these factors to have a noteworthy effect on CSR managers’ willingness to greenwash.
To the researcher’s knowledge, there is only one previous study by Debeljak, Krač and Banks (2011) that has linked the organization’s CSR development stage to its choice to greenwash or not. Another research by Fassin and Buelens (2011) linked the CSR orientation to the
organization’s greenwashing choice. Regarding employees’ CSR beliefs, research by Rodrigo and Arenas (2008) laid the foundation for the link between this factor and the organization’s choice to greenwash. Moreover, a few researches that implicitly propose a link between employees’ personal beliefs and greenwashing choice of the CSR manager were found (Dunford, Jackson, Boss, Tay, & Boss, 2014; Riordan, Gatewood, & Bill, 1997). Three other studies linked the sector in which the organization operates to the organization’s
greenwashing choice (Ramus, & Montiel, 2005; Marquis, & Toffel, 2012; Illia,
Zyglidopoulus, Romenti, Rodriguez-Cánovas, & González del Valle Brena, 2013). So, there is not only a gap in the CSR literature about the positive effects of different greenwashing types and the willingness of CSR managers to use these greenwashing types, but there is also a lack of knowledge about which circumstances can influence CSR managers’ willingness to greenwash. For this reason, the current research examines how these four factors, CSR development stage of the organization, the organization’s CSR orientation, the personal/CSR
27 beliefs of the employees, and the operation sector of the organization, all together can
influence the willingness of CSR managers to use a specific type of greenwashing.
2.4.1. CSR development stage of organization
Nowadays, more organizations change from a classical perspective to a modern perspective on CSR (Jamali, Sidani, & El-Asmar, 2009). To guide this process of implementing the (changing) CSR assumptions in organizations, previous studies developed roadmaps. Maon, Lindgreen and Swaen (2009) created a CSR integration roadmap of all the existing CSR integration processes and based this on the Field Model of Change created by Lewin in 1951. In their model, four stages to implement organizational change regarding CSR are defined. In the first stage, ‘unfreeze’, the managers’ goal is to break with the assumption that past
practices are the only way to do things right. The second stage is called ‘moving’, whereby the organization moves away from the current assumptions about CSR towards a new set of CSR assumptions, which the managers refreeze in the third stage called ‘refreezing’. The last stage is ‘sensitizing’ in which the importance of CSR issues becomes clear to everyone in the organization and resistance to change with respect to CSR is taken away. The fourth stage can also be seen as the first stage, because there is a vicious circle inside the model.
Miller and Serafeim (2014) also defined development stages to implement sustainability strategies in an organization, but they defined three stages. The first stage is ‘compliance’, followed by the second stage ‘efficiency’ and last is the third stage ‘innovation’.
In the compliance stage, organizations first meet the sustainability issue. The responsibility of the Chief Sustainability Officer, which can be seen as the CSR manager, is searching for data about sustainability i.e. information about competitors’ CSR. Based on this data he develops a CSR strategy and imbeds this into the organization. In the ‘efficiency’ stage, the focus is on
28 responding to pressure from stakeholders and to create more responsibility among the
organization's workforce, for example, by turning off the lights when employees leave the office. The main activity of the CSR manager in this phase is to create sustainability legitimization. The final stage, ‘innovation’, is characterized by developing market-driven strategies to minimize the organization’s negative impact on the environment such as pollution, and taking responsibility in societal issues such as obesity. The further the organization is developed, the more authority the CSR managers will have. While the CSR manager’s authority increases as progress is made toward the next development stage, his decision rights become decentralized and his engagement in CSR activities decreases (Miller, & Serafeim, 2014).
Although, as far as known there is only one research by Debeljak, Krač and Banks (2011) that links the CSR development stage to the greenwashing choice, it is plausible that CSR
managers of organizations in a later stage of CSR implementation are less likely to
greenwash. The first reason can be that, because of the CSR manager’s decentralized decision rights in a later CSR development stage, he himself cannot decide whether to greenwash or not (Miller, & Serafeim, 2014). When a lot of other people from the organization are involved in the greenwashing decision process, there is a high chance that some of them will not accept the CSR manager’s proposal to greenwash the organization’s CSR activities.
Especially, because in a later stage, i.e. the ‘sensitizing phase’, the importance of CSR issues becomes clear to everyone in the organization (Maon, Lindgreen, & Swaen, 2009).
Additionally, in a later stage, i.e. the ‘innovation stage’, the organization takes its responsibility towards the environment and society, because it really wants to have less negative impact (Miller, & Serafeim, 2014). In this case, the organization will not lie about its CSR activities, because it really wants to do well. Moreover, a CSR manager from an
29 organization in a high CSR development stage can communicate about the current CSR activities of the organization. When these CSR activities are in line with the stakeholders’ expectations, the CSR manager does not need it to greenwash the organization’s CSR activities (Karnani, 2010). However, green-highlighting some CSR activities would be a possibility. This leads to the following hypothesis:
H4a CSR managers in a later CSR development stage are not willing to use pure
greenwashing, but will be willing to use green-highlighting
CSR managers of organizations in an earlier CSR development stage have little to communicate towards their stakeholders when they ask about the organization’s CSR activities. This can lead CSR managers to lie about the organization’s CSR initiatives to prevent to be seen as irresponsible (Karnani, 2010). In their research, Debeljak, Krkač and Banks (2011) conclude that organizations make use of insincere CSR especially in the first stage of CSR implementation and during the maturing process. Besides lying about their CSR activities, it could be useful for organizations to solely focus on the CSR intentions and ambitions in their communication. In this way, the CSR managers can distract the attention from the current CSR initiatives. As Christensen, Morsing and Thyssen (2013) mention, an organization can improve its CSR by talking aspirational CSR ambitions. Therefore, one can expect that:
H4b CSR managers from organizations in an early CSR development stage are more likely
30
2.4.2. CSR orientation of organization
Organizations can have two types of motives to integrate CSR in their business strategies. The first CSR motives are self-centered/egoistic, for example, to increase the organization’s profit. In these motives the importance of the organization is paramount (De Roeck, & Delobbe, 2012). These self-centered motives belong to the Classical CSR perspective of organizations in which the focus is especially on the economic and legal responsibilities of the organization (Jamali, Sidani, & El-Asmar, 2009). In this Classical CSR perspective, the organization’s responsibilities are ranked on the following order of importance: economic (to produce goods/services and to make profit of this) – legal (to obey the law) – ethical (to behave in a way that is not included in law but expected from society) – discretionary/philanthropy (voluntary organizational activities to improve society/environment) (Pinkston, & Carroll, 1996). However, Pinkston and Carrol already noticed in 1996 that although economic
responsibilities of the organization were still seen as most important, a small change could be recognized towards the Modern CSR perspective in which ethical responsibilities of the organization became more important. So, according to the Modern CSR perspective the self-centered motives of the organization change towards other-self-centered CSR motives. These other-centered motives mean that the organization integrates CSR to improve the welfare of its stakeholders instead of its own welfare. When the main goal of the organization to implement CSR is not increasing its profit, but is rather to do business without harming society and its living space, CSR can be described as a stakeholder-oriented concept.
Especially in the past decades this stakeholder-oriented concept, which belongs to the Modern CSR perspective, has become more important in organizations (Maon, Lindgreen, & Swaen, 2009). Maignan, Ferrell and Ferrell (2005) describe the stakeholder-oriented concept as a situation in which organizations have to adopt values and norms along with the organizational processes to minimize their negative impact and maximize their positive impact on important
31 issues that stakeholders face. Besides this definition, Barnett (2007) describes stakeholder-oriented CSR as the allocation of corporate resources in such a way to enhance the social welfare that can improve the relationship between the organization and its key stakeholders. These definitions of CSR as a stakeholder-oriented concept fit the Stakeholder Theory (Cronin, Smith, Gleim, Ramirez, & Dawn Martinez, 2011). This theory proposes that when organizations create new CSR strategies they have to take the people who are affected by these decisions into account and try to diminish the damage to these people, while also maximizing their benefits.
To identify whether the organization’s CSR perspective is classical or modern, Jamali and colleagues (2009) developed a two-dimensional model that can show the CSR orientation of the organization. The model consists out of two axes. The first axe puts wide responsibility and narrow responsibility opposite to each other and the second axe does the same with benefits from CSR actions versus costs from CSR actions. This model describes four possible views of CSR with the two (classical and modern) CSR perspectives as starting point. The first view is the ‘Modern view’, which is characterized by high responsibilities toward issues, expectations and stakeholders and a focus on the benefits of CSR actions, while the
‘Philanthropic view’ is also characterized by high responsibilities but has a focus on the costs of CSR actions. The ‘Socio-economic view’ is recognized by its narrow responsibilities toward issues, expectations and stakeholders and its focus on the benefits of CSR actions, while in the ‘Classical view’ the responsibilities are still narrow but the focus is especially on the costs of CSR actions. It is worth to note that the modern view quadrant can be split into two other views. The ‘Modern Strategic Perspective’, in which the organization focuses on CSR activities that are in areas of direct concern or relevance to the specific organization and the ‘Modern Philanthropic Perspective’, in which the organizations’ CSR activities are not
32 specifically related to the area in which the organization operates (Jamali, Sidani, &
El-Asmar, 2009).
Summarized, organizations can have a classical perspective on CSR whereby the focus is on improving the financial results by making less costs or a modern perspective on CSR whereby the focus is on doing well to the environment and society (Pinkston, & Carroll, 1996; Jamali, Sidani, & El-Asmar, 2009). More specifically, Jamali and colleagues (2009) place
organizations into a CSR orientation quadrant based on their broad or narrow responsibilities and their focus on costs or benefits of CSR. Organizations with a classical view irrespectively of how broad or narrow their responsibilities are, focus on the minimizing of costs from CSR actions. For this reason, it is expected that they are more likely to use pure greenwashing, because, in this way, a (fake) green organizational image can be created which leads to a higher profit without making costs on actual green activities. Fassin and Buelens (2011) support this expectation by concluding that organizations that mainly focus on making profit regarding CSR, are more likely to communicate falsehoods about their (limited) CSR
implementation. They mention that organizations in the ‘hypocrisy’ and ‘cynicism’ position only communicate in enormous amounts about their CSR activities to improve their financial performance, while the actual CSR activities are limited in the ‘hypocrisy’ position and very limited in the ‘cynicism’ position. The current research expects that green-highlighting will also be often used by organizations that want to minimize their CSR costs, but that also want to improve their sustainable image by embellishing their limited CSR activities. Fassin and Buelens (2011) also mention that organizations with an ‘opportunism’ position communicate a lot about their little CSR activities and are very selective in their communication. For example, they make some of their CSR activities bigger than they are or give incomplete information about the activities in order to give stakeholders the impression that they are
33 sustainable without spending a high amount of money on their CSR activities. This leads to the following hypothesis:
H5a CSR managers of organizations with a classical CSR perspective whereby the focus is
on the costs of CSR are more willing to use pure greenwashing or green-highlighting
When the organization does not focus on the costs of CSR, but wants to do well to the environment and society - i.e. the modern CSR perspective - it does not matter whether the organization communicates its CSR activities with stakeholders. When stakeholders
experience the positive impact of the organization’s CSR activities, the organization reaches its goal. For this reason, CSR managers are expected to have a high willingness to use
greywashing. This expectation is supported by the findings of Fassin and Buelens (2011) that an organization with the moral position ‘idealism’ has the goal to do well to the environment and society without taking into account what the positive or negative consequences are for its reputation or (financial) marketing effects. They further conclude that greywashing is often used in this type of organizations. However, there are also organizations with a modern perspective that besides doing well to the environment and society also want to experience benefits of these CSR activities, for example, by a good reputation or a higher revenue. It is plausible that these organizations will focus their communication on their CSR ambitions. First of all because this will improve their sustainable image and secondly it will help the organization to develop a more positive CSR impact for the environment and society. This expectation strokes with the findings of Fassin and Buelens (2011) that an organization with the position ‘sincerity’ cares a lot about the environment and society, but in contrast to ‘idealism’ communicates a lot about it to survive in its business.
34
H5b CSR managers of organizations with a modern CSR perspective whereby the focus is
on benefits of CSR and doing well to the environment and society are more willing to use greywashing or CSR as aspirational talk.
2.4.3. Employees’ personal and CSR beliefs
Next to how the CSR orientation of the organization influences the willingness of CSR managers to use a form of greenwashing, this research expects that this willingness is also affected by the CSR orientation and personal values of the employees. Although much research has been conducted on how employees can influence the choice to implement CSR in the organization, less is known about their role in the organization’s greenwashing choice.
Based on employees’ reactions on CSR they can be divided into three types: the committed employee, the indifferent employee and the dissident employee (Rodrigo, & Arenas, 2008). The first one encourages the organization to implement CSR, because in his daily life he is really concerned about the environment and society. The indifferent employee wants to make the best of his career and will accept the implementation of CSR if the organization decides this. However, he will not ask for organizational CSR out of his own conviction. The dissident employee is the opposite of the committed employee and is against the
implementation of CSR in the organization. In his opinion, CSR costs money and this money could be better invested in benefits for the employees like a higher salary. However, he would accept CSR implementation if this leads to these personal advantages. Based on this typology, the current research expects that employees who really care about the environment and
society will not accept greenwashing, because they want real organizational actions that improve the environment and society (Rodrigo, & Arenas, 2008). It is plausible that because the employees will not accept incorrect CSR information, this can decrease the CSR
35 manager’s willingness to embellish or even lie about the organization’s CSR activities. On the other hand, when an organization has a lot of dissident employees these employees can
perhaps influence the CSR manager to use greenwashing. This is caused by the fact that they want as much benefits for the organization and themselves, preferably without ‘unnecessary’ costs.
H6a CSR managers are less willing to use pure greenwashing or green-highlighting when
the employees attach value to the CSR of their organization than when the employees do not attach value to the organization’s CSR
If the employees really care about the environment and society and want organizational actions that have a positive influence on this, it is possible that these employees will encourage CSR as aspirational talk. Namely, when the organization communicates its CSR ambitions to the public, even when they are not supported by actions, the organization can motivate its internal stakeholders to fulfill these CSR ambitions (Christensen, Morsing, & Thyssen, 2013). In this way, the discrepancy between words and actions will lead to the achievement of the employees’ goal: an improved organizational impact on the environment and society. The encouraging of the employees towards the organization to use CSR as aspirational talk can influence the CSR managers’ willingness to use this type of greenwashing:
H6b CSR managers are willing to use CSR as aspirational talk if the employees attach
36 Besides the expectation that the greenwashing choice of the CSR manager can be affected by the employees’ CSR beliefs, the employees’ personal beliefs are also expected to be an influencer. Dunford, Jackson, Boss, Tay and Boss (2014) show that employees want
organizational justice as fair (CSR) communication for themselves and third parties. This care about a fair treatment can be caused by instrumental motives (self-interest reasons for caring about organizational justice, like if I am a consumer, I want to be treated in a fair way too), relational motives (social exchange factors for caring about organizational justice, like they want consumers to see them as fair persons) and deontic motives (universally held moral expectations, like treat everyone fairly).
If employees notice that they and third parties like consumers are treated in a correct way this shows the ethical and moral values of the organization, which relates positively to the
organizational trust of the employee. This trust in the organization can improve the employee’s organizational identification (De Roeck, & Delobbe, 2012). However, when external stakeholders attack the organization for its greenwashing activities, which leads to a negative image, the employee’s self-definition through their organizational membership will worsen (Riordan, Gatewood, & Bill, 1997). Probably, because he fears that his image will be damaged too. Dunford, Jackson, Boss, Tay and Boss (2014) also mention that when the organization lies or misleads its employees and other stakeholders by greenwashing, this can harm the employee’s organizational trust and diminish the employee’s organizational
identification. It is worth mentioning that the employee’s organizational trust is thus not only affected by the organization lies about its CSR activities towards the employees themselves, but also to people outside the organization when recognized by the employees (Hansen, Dunford, Boss, Boss, & Angermeier, 2011). Moreover Rupp, Ganapahti, Aguilera and Williams (2006) confirm that social irresponsibility as corporate injustice can negatively
37 affect the employee’s attitude toward the organization, because this causes discrepancy
regarding his/her personal values and threats his psychological needs.
Therefore, besides the specific CSR beliefs of the employee his/her personal beliefs can also play an important role by affecting the greenwashing choice. When the employee experiences corporate injustice, for example, by greenwashing or green-highlighting activities this can have negative influence on his organizational trust and identification (De Roeck, & Delobbe, 2012; Dunford, Jackson, Boss, Tay, & Boss, 2014), but also on the employee’s attitude
toward the organization (Rupp, Ganapathi, Aguilera, & Williams, 2006). For this reason, CSR managers’ willingness to give incorrect or incomplete CSR information is expected to be low since it will bring too much risk for the employee-organization relationship.
H6c CSR managers are not willing to use pure greenwashing or green-highlighting when
the employees’ personal beliefs disapprove corporate injustice
2.4.4. Sector of operation
The sector in which the organization operates is often linked to the organization’s CSR implementation choice. However, few studies have linked the sector of operation and the organization’s greenwashing choice. Ramus and Montiel (2005) investigated four industry sectors: oil/gas industry, services industry and chemical versus non-chemical manufacturing industry and concluded that the organization’s commitment to environmental policies is in every sector almost the same. However, the organizations’ implementation of environmental policies differs per sector. Ramus and Montiel (2005) further mention that pressure from the environment can motivate organizations in a specific sector to commit to environmental policies when there is no regulation regarding to CSR. Maon, Lindgreen and Swaen (2009)
38 also conclude that pressure from stakeholders who can affect or are affected by the
organizational practices, like consumers, investors, NGO’s, government and the media, put pressure on organizations to behave responsibly toward the environment and society. Aguinis and Glavas (2012) also recognize the stakeholder’s pressure on the organization’s necessity to have a CSR policy. It is noteworthy that in all these three studies the economic advantage is also given as a reason to communicate a CSR policy and is even a main reason to really implement the environmental policy.
The chemical sector experiences the greatest consumer pressure and also has to deal the most with regulations, because of its toxic chemicals. Additionally, the oil and gas sector is faced with much regulation regarding environmental responsibility, because fossil fuel products are seen as harmful for the environment and there is a high pressure of stakeholders. However, stakeholders' pressure is very low in the (chemical) manufacturing sector, although there is some regulation to minimize the environmental impact of this sector regarding its waste. On the other hand, in the services (non-chemical manufacturing) sector the environmental regulations and stakeholder pressure are negligible (Ramus, & Montiel, 2005). Ramus and Montiel (2005) conclude that the low stakeholder pressure regarding CSR in the service sector and the fewer economic (dis)incentives to implement a change in its environment compared to the other sectors, leads this sector to be less likely to implement environmental policies. However, the service sector shows the same commitment to the environmental policies as the other sectors. Therefore, the service sector can be accused of greenwashing compared to the other sectors that not only show their CSR commitment but also really try to implement CSR policies. The high stakeholder pressure can explain that the other sectors next to their
commitment to CSR policies also really care about the implementation. The stakeholder pressure and control is high in these sectors which cause that lying or another way of
39 misleading the stakeholders will be noticed sooner than in sectors where the pressure and control of stakeholders is lower (Ramus, & Montiel, 2005). Marquis and Toffel (2012) also mention that organizations in a sector with a high visibility are more likely to communicate transparent CSR information and not conceal their real CSR performances. The reason for this is that the society will control and criticize this information more than the CSR information of organizations in less visible sectors.
H7a: CSR managers in a visible sector that faces high stakeholder pressure are less likely to
use pure greenwashing compared to organizations in an invisible sector with low stakeholder pressure
Besides this, Illia, Zyglidopoulos, Romenti, Rodriguez-Cánovas and González del Valle Brena (2013) note that managers agree that organizations in controversial sectors such as the oil and tobacco industry do not have to conceal the difficulties they face regarding CSR implementation. In their communication towards their stakeholders, they have to
communicate balanced information, meaning not only the progress they are making regarding their CSR initiatives, but also the CSR initiatives that are still a difficult challenge.
Stakeholders will show their understanding and will not accuse them of greenwashing. Greenwashing in controversial sectors is, therefore, not recommended. Furthermore, De Vries, Terwel, Ellemers and Daamen (2015) advice organizations in controversial sectors not to communicate environmental motives for implementing CSR. It is better to acknowledge the economic motives in the communication, because this can reduce stakeholders' suspicions of greenwashing. The reason is that stakeholders are often convinced that an organization in a controversial sector attaches more value to its own (financial) benefits of CSR than to the benefits for the environment. When the organization communicates its environmental motives for implementing CSR, the stakeholders will not believe this, which diminishes the
