How does greenwashing affect the sustainability reporting of
firms in the automotive industry to attain better sustainability
performance?
Author: Lennart Jansink Student number: S4187105 Email: l.b.jansink@student.rug.nl
Supervisor: H. Reijn
Co-assessor: P.J. Marques Morgado
Faculty of Economics and Business University of Groningen
Duisenberg Building, Nettelbosje 2, 9747 AE Groningen, The Netherlands P.O. Box 800, 9700 AV Groningen, The Netherlands
http://www.rug.nl/feb
Table of content
1. Introduction ... 1
2. Literature review ... 2
2.1 Automotive industry ... 2
2.2 Sustainability and sustainability reporting ... 4
2.3 Greenwashing ... 6
2.4 Drivers for greenwashing ... 6
2.5 Performance measurement ... 10
3. Research framework ... 11
4. Research design ... 12
5. Analysis ... 13
5.1 Sustainability indices ... 14
5.2 Greenwashing automotive industry ... 18
6. Conclusion ... 21
6.1 Limitations ... 22
6.2 Future research ... 22
Abstract
The automotive industry is challenged for being sustainable in their business activities and to the environment. Increasing demand for environmentally friendly cars and other environmental activities have increased the need for companies to publish their sustainability report. Certain companies in the automotive industry have been criticized for greenwashing in recent years. This phenomenon is that a company present itself greener or more socially responsible than it actually is. Therefore, greenwashing is affecting the sustainability performance of the company. This paper focusses on the sustainability reporting and the key drivers for making use of greenwashing in the automotive industry. The research conclude that there are still risks for greenwashing as some drivers are still there, but the wake-up call of the consequences of the Volkswagen scandal was so strong that greenwashing is now seen as not-done with a way to high risks for huge financial and reputational damage. Therefore, greenwashing is not a key driver anymore in the automotive industry to attain a ‘green image’ to the society.
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1. Introduction
This paper will look into the key drivers for sustainability reporting in the automotive industry, especially looking into the aspects of greenwashing. This industry has a global revenue of 5.315 billion USD dollar in 2017 (Statista, 2020). Toyota Group, Volkswagen Group, Ford, Honda, Nissan and Hyundai have together about 43% of the global market share. The research will focus on the three largest manufactures in the automotive industry, namely Toyota Group, Volkswagen Group and Ford. Products in the automotive industry are passenger cars, light trucks, motor vehicles and large transport trucks.
According to Saberi (2018) the increase of the global population stimulates the production of cars. Besides that, due to the economic development in developed and developing countries, more and more people can afford buying a car or several cars.
A current global trend is that governments stimulate environmentally friendly driving. This trend has influenced the way of production of the cars and how software in cars is used (Sato, 2015). Therefore, the key activities within the automotive industry are new product development and development of the software for the cars.
Sustainability is an important theme nowadays, also in the automotive industry, since it can be a competitive advantage for a firm. This means that firms have to regulate their activities in a way to minimize the negative impacts on the environment (Salvado et al., 2015).
2 Greenwashing is the phenomenon that a company presents itself greener or more socially responsible than a company or organization actually is. In recent years, several automotive companies have been criticized for this, by manipulating the car´s software. Volkswagen had in 2015, 11 million cars with emission cheating software around the world, which had to be returned, because they did not meet the so-called Euro 5 standard (Majláth, 2016).
This research will look at the sustainability performances for firms in the automotive industry. The automotive industry has to deal with market trends and customer preferences. Key drivers for greenwashing, outlined by Delmas and Burbano (2011) are analysed for gaining a green image and to attain a better sustainability performance.
Following from these thoughts, the central research question is formulated as follows:
‘’How does greenwashing affect the sustainability reporting of firms in the automotive industry to attain better sustainability performance?’’
Hypothesis is that companies are more interested in a green reputation to secure sustainability success than in true sustainability performance improvements. The focus will be on greenwashing reporting and its influence on performance measurement within the automotive industry, especially car manufacturers.
2. Literature review
This section present an overview of the literature regarding the automotive industry, sustainability, sustainability reporting, greenwashing, drivers for greenwashing and performance measurement.
2.1 Automotive industry
The automotive industry is one of the biggest industries in the world, with a lot of history, capital and knowledge.
3 (OICA, 2020), in 2016 the total value of exported cars around the world was about 698.2 billion dollars. In 2017, there were 73.4 million cars produced in the world, with China as the main producer, with about 28 million cars. In the United States about 11 million cars were produced and Japan came in third with about 10 million cars. Germany and India follow in fourth and fifth place.
The average annual turnover in the global automotive industry is more than 2.75 trillion Euro. The production of cars is still increasing in recent years, and it contributes for almost 4% of the global GDP (Saberi, 2018).
In 2018, there were approximately 1.3 billion cars in use worldwide, which is approximately 180 cars per 1000 inhabitants. Furthermore, the industry plays an important role in innovation, with large-scale investments in research and development. In 2017, the entire sector, worldwide, spent nearly 120 billion euros on research and development. According to the European automotive manufacturers association (ACEA) the European Union was the most important region and spent over 57 billion euros on research and innovation (ACEA, 2019). Japan followed with 30 billion euros on investments on research and innovation as reported by the Japan automotive manufacturers association (JAMA, 2019).
Nowadays, car manufacturers do not just produce physical cars, but have also to develop and implement the car´s software. Currently about 50-70% of the production costs are software costs (Broy, 2006).
4 Figure 2.1: Market share Automotive Industry. Source: Statista, 2020.
2.2 Sustainability and sustainability reporting
There is not a single definition for sustainability. Brundtland Commission wrote in a report in 1987, that sustainability was based on three overlapping pillars, namely; environment, economy and equity. Brow, Hanson, Liverman and Meredith (1987) made in this report a general concept of sustainability, see table 2.1 below. These definitions have been used for a long time by companies to create a clear definition for sustainability.
Nowadays, sustainability has become ever more complex. According to Purvis, Mao and Robinson (2019) sustainability is the phenomenon that a business is concerned with social, economic and environmental pillars. These pillars are seen as input for being sustainable as a company. 2,62% 2,94% 3,35% 4,52% 5,05% 5,15% 5,46% 5,59% 7,59% 10,24% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 12,00% BMW Mercedes Kia Chevrolet Hyundai Nissan Honda Ford Volkswagen Toyota
5 The aim of the social pillar is to define the liveability and to perform and control the social system at a defined level. This level is determined by the goals of human beings. The environmental pillar refers to the ability that resources can be reused. The level of sustainability will increase if companies have renewable resources. The economic sustainability pillar refers to the ability of the economy to support the social and environmental pillar, by supporting the defined economic production in a country (Purvis, Mao and Robinson, 2019).
Kates et al., (2012) emphasized that the strategy of businesses should be based on society and nature concerns. Because of the different definitions, sustainability creates diverse reports among different companies and segments. According to Mile and Gray (2007) the reports are concerned with the economic, social and environmental impacts of the companies, and the goals of the management.
The pressure for companies to publish these sustainability performances in their reports has increased in recent years. Sustainability reporting started in the 80s where companies involved environmental policies and the impacts of it in their financial report. In the late 90s, companies included social, environmental and financial information in their report (Elkington, 1999).
6 Table 2.2 Trends in sustainability reporting by large companies. KPMG 2012
2.3 Greenwashing
According to Siano et al., (2017) companies give misleading information, called greenwashing, to withhold certain aspects related to sustainability. There is a distinction between firm-level greenwashing and product-level greenwashing. Firm-level greenwashing is giving misleading information by the company about their environmental practices. Furthermore, a company can give misleading information about the benefits of their products or services, this is termed as product-level greenwashing.
Aras and Crowther (2012); Testa, Boiral, and Iraldo, (2015) described in their article that increasing pressure on the company of the stakeholders is a reason for companies to make use of greenwashing. By making use of greenwashing the financial performance of a company can be influenced in a positive but misleading way (Jonsen et al., 2015). Moreover, according to Aras and Crowther (2011) a stronger reputation to the society can be a reason for companies to give misleading information.
2.4 Drivers for greenwashing
7 Looking at the environmental performance, firms can be categorized into a bad (brown firms) or a good performance (green firms). The communication about environmental performance can be categorized in no communication and positive communication, since companies with bad environmental performance will be silent about their environmental performance. In Figure 2.2 below, ‘’vocal green firms’’ can be defined as firms with a good environmental performance and a positively communication about their environmental performance tot the society, while those firms that do not communicate are called ‘’silent green firms’’ Firms with a bad environmental performance, which do not communicate this are described as ‘’silent brown firms’’. Lastly, there are greenwashing firms, these are companies with bad environmental performance, but with a positive, thus misleading communication (Delmas and Burbano, 2011).
Figure 2.2 Classification firms outlined by Delmas and Burbano (2011)
Delmas and Burbano (2011) focused on the firm’s communication about their environmental performance and described 4 different drivers for greenwashing. This research will use these 4 drivers to analyse the behaviour of car manufacturers.
Non-market external drivers
Lax and Uncertain Regulatory Environment
The regulations and fines for companies according to greenwashing are still very unclear. So, for firms it is also unclear if they will be punished for environmental claims (Delmas and Burbano, 2011). Especially in developing countries there are no regulations and firms will not be fined for greenwashing.
Activist, NGO and Media Pressure
8 for companies to disguise misleading information of their environmental performance to the society as much as possible.
Market external drivers
Consumer and investor demand
Firms experience pressure for being sustainable from consumers and stakeholders, which is an incentive for companies to give misleading information about their environmental performance. Vos (2009) concluded that firms with higher pressure from consumers and stakeholders, are more likely to make use of greenwashing.
Competitive pressure
Delmas and Toffel (2008) analysed that firms tend to compare themselves to similar firms in their industry, which leads to the adoption of how these similar firms communicate about their environmental performance.
Organizational drivers
Firms characteristics
Delmas and Burbano (2011) discussed that firms characteristics are influencing the pressure for firms to communicate positively about their environmental performance. Firms with consumer-products would experience a greater demand for being environmentally friendly by consumers, than a firm with non-consumer products.
Incentive structure and Ethical Climate
Wimbush, Shepard and Markham (1997) describe that the incentive structure and the ethical climate influence the firm on how it communicates its environmental performance to the society. Incentives are often based on the results of a company, which could encourage the managers to give misleading information about the performance. Martin and Cullen (2006) investigated that giving misleading information appears more in firms with an egoistic climate.
Organizational Inertia
9 delays the process from intention to be ‘green’ to the actual implementation, which makes it tempting for firms to pretend to be greener than they actually are.
Effectiveness Intra-Firm Communication
Delmas and Burbano (2011) describe that firms with ineffective communication are more likely to make use of greenwashing, than firms with effective communication between different departments.
Individual Psychological Drivers
Optimistic Bias
Kahneman (2003) describes that uncertainty influences the decision-making process of managers, called bounded rationality. Greenwashing is more likely to occur by managers who are working in an uncertain environment, due to the lack of perfect information.
Narrow decision framing
Delmas and Burbano (2011) analysed that greenwashing is stimulated by the fact that managers cannot estimate the negative effects of providing misleading information about environmental performance to the society.
Hyperbolic Intertemporal discounting
Delmas and Burbano (2011) describe that cognitive factors are influencing the firm to choose for greenwashing. Managers can communicate positively about the environmental performance of the company for the future, but they choose for greenwashing when the future becomes today.
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2.5 Performance measurement
There is not a single measurement to measure the performance of all the companies, so each company uses different tools to measure their performance. According to Bititci et al., (2011) performance measurements are changing in response to global and business trends. This leads to different frameworks and models that were adopted to test certain activities on their performance.
Aguinis (2019) describes performance measurement as a process of identifying, measuring and developing the performance of certain activities and aligning their performance with the strategy of the organization. It is a continuous process for managers of setting goals, measuring the performance and giving and receiving feedback. Additionally, measuring the performance generates a connection between employee performance and the goals of the firm, where it makes the contribution of the employees to the firm explicit.
According to Morgado (2014) the challenges for communicating and reporting of sustainability resulted in big efforts and striving for standardising the performance measurements and reporting of it. Roa and Holt (2005) analysed that sustainability is related to the performance and the competitiveness of the company. This was later substantiated by empirical research of (Callan and Thomas, 2009; Vitezic, 2011). They found a positive correlation between the economic and social factors of a firm.
Sustainability performance measurement systems (SPMS) can be defined as: ’’system of
indicators that provides a corporation with information needed to help in the short-and long-term management, controlling, planning, and performance of the economic, environmental, and social activities undertaken by the corporation’’ (Searcy, 2011).
Corporate sustainability performance measures refers to the ability of a firm to integrate economic, environmental, social and government issues in their business activities and the impact of these activities on the firm and society (Artiach and Walker, 2010).
11 individual employee. Thirdly, systems on how to report sustainability. Lastly, initial project assessments systems. This all in order to facilitate the integration of sustainability in the performance measurement of companies. Through the different measurements to measure sustainability performance it is important to compare companies on the same business activities that contributes to sustainability.
3. Research framework
In this section the research question and hypotheses are formulated. The conceptual model clearly illustrates the variables and the relationship between them, where the research question and hypothesis are based on.
In combination with sustainability and greenwashing the activity within firms that will be addressed in this paper, is the sustainable performance measurement.
12 Figure 3.1 Conceptual model
Based on this conceptual model the research question is formulated as follows:
‘’How does greenwashing affect the sustainability reporting of firms in the automotive industry to attain better sustainability performance?’’
In order to answer the research question the following hypotheses has been formulated: Hypothesis 1: The automotive industry is more interested in a "green image" to secure sustainability success (performance) than in true sustainability performance improvements. Hypothesis 2: Greenwashing is an important key driver to attain a ´´green image´´ in the automotive industry.
4. Research design
13 philosophies, approaches, strategies, choices, time horizon and techniques and procedures (Saunders et al., 2009).
Literature is researched from an interpretivist philosophy, which aims to create new understandings of social worlds and contexts (Saunders et al., 2009). This research made use of the inductive approach, where academic literature is used to explore a phenomenon, the influence of greenwashing on sustainability reporting in the automotive industry. The aim of this approach is to define this theory and create a conceptual framework (Saunders et al., 2009).
The strategy that is used in this research paper is based on archival data. It means that the data is not collected by the researcher themselves, but that the research relies on existing data and theories (Saunders et al., 2009). Due to the time constraints this strategy is used. In addition, this research makes use of data triangulation, in order to confirm research findings of the secondary data.
A mono-method technique will be used, due to the time constraints of this research paper. This implies that the data that is used will be qualitative in nature. There is enough secondary data available regarding sustainability and greenwashing in the automotive industry, so there is no need for primary data collection. This research is longitudinal, since it focuses on outlining a trend instead of a snapchat of certain time (Sanders et al., 2009).
The secondary data from the academic sources are collected between February-June 2020. For the search of relevant literature, Google Scholar, RUG library, SMART CAT, EBSCO and Science Direct have been used as search engines. For describing the automotive industry and the trends, data from consultancy firms and data-organisations are used, like KMPG and OICA. The keywords during the desk research are: automotive industry, car manufacturers, sustainability, sustainability reporting, greenwashing, corporate social responsibility and automotive markets and trends.
5. Analysis
14 and the World Benchmarking Alliance (WBA). Furthermore, the behaviour of the car manufacturers will be discussed by analysing the 4 different drivers for greenwashing, outlined by Delmas and Burbano (2011).
5.1 Sustainability indices
The Dow Jones Sustainability Index (DJSI) is a tool which ranks companies in the industry based on economic, environmental and social concerns, see table 5.1. The DJSI is one of the most important indicators for sustainability of companies. SAM scores (Sustainability Assessment of Materials), which are based on recognition and response of certain global sustainability actions by companies, are also given to the automotive industry. These scores can analyse if companies are truly interested in sustainability performance or just want to create a ‘green image’ to the society by giving some actions and challenges in their sustainability reports. Only companies that meet sustainability criteria more than the majority of comparable companies are included in the DJSI. In this index scores are given between a scale of 0 and 100 in which a high score implies a higher sustainability performance in all of the business activities. Table 5.1 Structure of Dow Jones Sustainability Index (DJSI)
Another sustainability index is the Sustainability Brand Index. This is a European study, which measures and analyses the sustainability of different industries. In 2019 there are more than 20 industries analysed based on their sustainability performances, including many car manufacturers in the automotive industry. These analyses are currently conducted in Sweden, Norway, Denmark, Finland and the Netherlands. Furthermore, this study ranks different brands, based on the perceived sustainability by the stakeholders of the firms.
15 a trend assessment. These three parts form the base for the overall assessment, which measures the sustainability of the firms and the alignment to go to a low emission economy.
Toyota sustainability performance
In the sustainability report of Toyota (2019), is stated that they strive to maximize the sustainability contribution for growth and society. The global approach that Toyota used is that social contribution will be achieved by using efficient resources and by concentrating on initiatives that address the global social needs. Besides that Toyota has formulated 6 environmental challenges for 2050 and milestones for 2030. The main purpose of these challenges are reducing the global CO2 emission in their cars and the supply chain, minimizing
water usage and establishing a future society in harmony with nature. Furthermore, according to Toyota for being sustainable, a positive relationship with stakeholders, shareholders and customers is essential.
Toyota is included in the Dow Jones Sustainability Index (DJSI). With a SAM ESG (Environmental Social and Governance) score of 59, it is among the best 10 companies within the automotive industry, see table 5.2 below.
Table 5.2: Toyota score on Dow Jones Sustainability Index. Source: Yearbook RobecoSAM. Dow Jones Sustainability Index (DJSI)
Car manufacturer
Ranking based on other car manufacturers in DJSI
SAM ESG Score
Toyota (10/35) 59
Additionally, Toyota is ranked very high in the Sustainable Brand Index, see table 5.3. In this index means 1 the most sustainable company. Toyota belongs in all countries to the best 3 sustainable companies within the automotive industry.
Table 5.3: Toyota ranking sustainability index. Source: Sustainable Brand Index Toyota Sustainable Brand Index
Country Ranking for car manufacturers
Sweden (3/25)
Norway (2/23)
Denmark (3/25)
Finland (3/22)
The Netherlands (2/12)
16 efficiency and lowering the emissions of the cars, but Toyota is still struggling with going to fully electric vehicles. Furthermore, Toyota’s business model is focused on the development of battery and charging technologies for the cars.
Table 5.4: Toyota sustainability performance score. Source: World Benchmarking Alliance World Benchmarking Alliance (WBA)
Car manufacturer
Ranking position Performance score
Toyota (8/25) 10.4/20
Volkswagen sustainability performance
According to the sustainable report of Volkswagen Group (2019), the main purpose of sustainability is giving equal priority to the economic, social and environmental goals of the company. Volkswagen group has formulated challenges to achieve sustainability with the main purpose to be a role model for the environment. Sustainability is now at the centre of the business model of Volkswagen. Contributing local development and equity opportunities is an important factor. Another mission statement by Volkswagen is to minimize the environmental impact, focusing on the entire life cycle. This is in order for the ecosystem and to be a role model for the environment.
Between 1994 and 2004, and from 2007 to 2015 Volkswagen was included in the DJSI. With a score of 91 in September 2015, Volkswagen was appointed as the world’s most sustainable car company. But after greenwashing in 2015, where Volkswagen manipulated emission tests of the cars, they were removed from the DJSI.
Looking at the Sustainability Brand Index, Volkswagen scores high and belongs in most countries to the best 5 sustainable companies within the automotive industry, see table 5.5.
Table 5.5: Volkswagen ranking sustainability index. Source: Sustainable Brand Index Volkswagen Sustainable Brand Index
Country Ranking for car manufacturers
Sweden (7/25)
Norway (7/23)
Denmark (4/25)
Finland (5/22)
The Netherlands (5/12)
17 reduced in emissions, due to the development of the engines. Furthermore, Volkswagen is encouraging and giving incentives for electric vehicles.
Table 5.6: Volkswagen sustainability performance score. Source: World Benchmarking Alliance World Benchmarking Alliance (WBA)
Car manufacturer
Ranking position Performance score
Volkswagen (4/25) 12.1/20
Ford sustainability performance
According to the sustainability report of Ford (2019), is that freedom of movements drives human progress to attain sustainability. With the main purpose to become the most trusted company around the world. The business model of Ford is based on three concerns. Firstly to be a trusted company. Secondly, driving human progress, which stimulates the production of cars to create freedom of movement. Thirdly, lower the emission of the cars and to have a good reputation around the world.
Additionally, Ford has formulated the goals in their report to attain sustainability. These goals are mainly based on reduction of water and CO2 emission, equity of human rights and focussing
on renewable energy.
Ford is included in the Dow Jones Sustainability Index (DJSI). With a SAM ESG score of 30, see table 5.7, it is among the best 20 companies within the automotive industry. This ranking may seem low, but only companies that meet the sustainability criteria more than the majority of comparable companies are included in the DJSI.
Table 5.7: Ford score on Dow Jones Sustainability Index. Source: Yearbook RobecoSAM. Dow Jones Sustainability Index (DJSI)
Car manufacturer
Ranking based on other car manufacturers in DJSI
SAM ESG Score
Ford (19/35) 30
18 Table 5.8: Ford ranking sustainability index. Source: Sustainable Brand Index
Ford Sustainable Brand Index
Country Ranking for car manufacturers
Sweden (19/25)
Norway (9/23)
Denmark (14/25)
Finland (11/22)
The Netherlands (8/12)
Analysing the World Benchmarking Alliance, Ford is with a performance score of 11.3 ranked as 9th within the automotive industry, see table 5.9. Ford is performing well in reducing the emissions of the cars, due to the development of their engines. In addition, they are performing well of the material and intangible assets.
Table 5.9: Ford sustainability performance score. Source: World Benchmarking Alliance World Benchmarking Alliance (WBA)
Car manufacturer
Ranking position Performance score
Ford (9/25) 11.3/20
5.2 Greenwashing automotive industry
In this section the behaviour of the car manufacturers will be analysed. This is done by the different drivers for greenwashing, outlined by Delmas and Burbano (2011). These are the non-market external, non-market external, organizational and individual psychological drivers. The organizational and individual psychological drivers for greenwashing are according to Delmas and Burbano (2011) more common and easier to detect in smaller companies. For the large car manufacturers the non-market and market external drivers for greenwashing are more relevant. These two drivers include consumer demand, investor demand, competitive pressure and are more common in bigger companies, like the car manufacturers. Therefore, the car manufacturers are analysed and ranked on these key drivers.
Greenwashing Toyota
19 This is a market external driver, by giving misleading information to the consumers and society about the environmental performances of their products. A reason for this, could be that Toyota experienced pressure for being sustainable from customers or stakeholders. More activities of Toyota concerning greenwashing cannot be found in the literature.
The sustainability indexes show that Toyota scores very high on sustainability, which implies that their business activities are truly based on sustainability. But analysing the literature, with regard to greenwashing, also firms which are ranked high for sustainability make use of greenwashing to create a green image for the society. Toyota was more interested to increase their green image, by giving misleading information to the consumers and society, than in true sustainability performance improvements.
Greenwashing Volkswagen
In 2015, Volkswagen was exposed for making use of greenwashing. They produced 11 million diesel cars with ‘’cheating software’’, so that the cars seemed to emit less polluting gases during emission tests. With this software, the cars met the environmental requirements at the time they were tested, but in reality they were a lot more polluting. On 21 August 2015, Volkswagen verbally admitted that it used counterfeit software in their cars. The consequences of this form of greenwashing were enormous, by paying more than 27 billion euros in fines and damages. According to Business Insider (2015), Volkswagen technology was not sufficient to meet the low emission requirements, determined by the government.
This is both a non-market and a market external driver. Due to the regulations regarding emissions, which Volkswagen at that moment could not meet, they chose to manipulate the software. This is a non-market external driver, by giving misleading information about the environmental performances of the cars.
It is also a market external driver. Volkswagen experienced that customers prefer cars that are less harmless to the environment. This could be satisfied, by giving misleading information to the consumers and society about the environmental performances of the products.
20 greenwashing. Volkswagen was more interested to attain a green image to the society, than in true sustainability performance improvements.
Greenwashing Ford
Ford published in 2007 an advertisement for the Ford Escape Hybrid. This commercial suggested that it was easy for a human being to become green by purchasing a Ford Escape Hybrid. According to this advertisement, buying this car would help for a greener environment and it totally ignores the impact on the environment by the company itself.
This is just like Toyota, a market external driver, by trying to manipulate the consumers about the environmental performances of their products. The reasons for greenwashing are not given by Ford, but it could be that Ford experienced pressure for being sustainable from customers or stakeholders. This form of greenwashing had few consequences for Ford. More activities of Ford concerning greenwashing cannot be found in the literature.
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6. Conclusion
This research paper analyzed the influence of greenwashing on sustainability reporting within the automotive industry to better attain sustainability performance. The research questions was formulated as follows:
‘’How does greenwashing affect the sustainability reporting of firms in the automotive
industry to attain better sustainability performance?’’
To answer the research question, two hypotheses are formulated, which are hypotheses 1: The automotive industry is more interested in a "green image" to secure sustainability success (performance) than in true sustainability performance improvements. Hypotheses 2: Greenwashing is an important key driver to attain a ´´green image´´ in the automotive industry.
The literature shows that sustainability reporting is becoming more and more important for car manufacturers. This is because of the behavior of the customers for sustainable products. Important factors within the sustainability reporting are economic, environmental and social concerns. In terms of being sustainable, by analyzing the sustainability performances of the firms it shows that a green reputation in some cases are more important than in true sustainable performance improvements in the automotive industry. In 2015 the non-market and market external were an important driver for Volkswagen to make use of greenwashing, without knowing the consequences. After the scandal and the major consequences, Volkswagen changed its way to communicate about their environmental performances to the society, by being more transparent.
This shows that highly ranked sustainable firms also make use of greenwashing in certain times, in order to increase their reputation to the society or to withhold data related to the environment. After the emission scandal by Volkswagen, little greenwashing in the automotive industry has been noted. The Volkswagen scandal has been a wake-up call for other car manufacturers in the automotive industry, by knowing the financial and the reputation consequences.
22 expectations of transparency by customers with regard to sustainability reporting, it is more difficult to make use of greenwashing. Therefore, greenwashing is not a key driver anymore in the automotive industry to attain a ‘green image’ to the society.
6.1 Limitations
A limitation of this paper is that the conclusions are based on three car manufacturers in the automotive industry. Furthermore, the conclusions are only based on the literature and not tested with empirical data. Another limitation of this paper was the limited information about greenwashing, since firms do everything they can to make this unavailable for the society.
6.2 Future research
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