“Environmental disclosure greenwashing” and corporate value: The premium effect and premium devalue of environmental information

Abstract Environmental disclosure is a crucial method for companies to demonstrate their environmental efforts. However, in some institutional contexts, companies may be inclined to “greenwash” their environmental disclosures, strategically seeking social rewards. Anchored on impression management theory, this study delves into the relationship between environmental disclosure and corporate value. The research substantiates the premium effect of environmental information while shedding light on the adverse impact of “environmental disclosure greenwashing” (EDG) on corporate value. Moreover, EDG leads to a further devaluation in the premium effect of environmental information. A more profound analysis reveals that the market trust acts as the mediating mechanism in the premium devaluation effect caused by EDG. Notably, when information user capability and media attention are scrutinized as distinct groups, the impact of EDG displays pronounced heterogeneity. These findings provide a theoretical foundation for verifying the authenticity of corporate environmental disclosures. Additionally, they offer valuable policy insights for rectifying EDG practices and enhancing environmental disclosure mechanisms.