Firms Talk, Suppliers Walk: Analyzing the Locus of Greenwashing in the Blame Game and Introducing ‘Vicarious Greenwashing’

How should companies handle greenwashing in supply chains?

Marta Pizzetti, Lucia Gatti, and Peter Seele analysed the relationship between corporate greenwashing in supply chains and its impact on stakeholder perceptions in « Firms Talk, Suppliers Walk: Analyzing the Locus of Greenwashing in the Blame Game and Introducing 'Vicarious Greenwashing' ».

They presented participants with fictional company descriptions and greenwashing incidents to measure the perception of greenwashing from both ethical (blame attributions) and business (intention to invest) perspectives

After manipulating the levels of controllability and intentionality of greenwashing scenarios, their main takeaways include:

• The study introduces a new typology of greenwashing based on where the discrepancy between in the supply chain it occurs: direct, vicarious, and indirect greenwashing.
• Direct greenwashing carried out by the company itself leads to the highest blame attribution and lowest intention to invest.
• Vicarious greenwashing arising from the discrepancy between company policies and supplier behaviour results in intermediate blame levels but similarly low investment intentions as direct greenwashing.
• Indirect greenwashing carried out by a company supplier generates the lowest blame attribution and highest intention to invest.
• Controllability and intentionality significantly influence blame attribution and investment intentions, particularly for vicarious and indirect greenwashing cases.

This study suggests companies should focus on implementing and communicating genuine sustainability practices throughout their supply chains, as vicarious greenwashing can be as damaging as direct greenwashing in terms of investment intentions.

It also supports the need for more regulations addressing supply chain sustainability as well as corporate accountability for supplier actions.

Academics might question the external validity of using fictional scenarios to model the complexity of supply chain management and sustainability implementation in real-world contexts.