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Financial distress and corporate ESG greenwashing

Ruiqian Li et al.

International Review of Economics & Finance2026https://doi.org/10.1016/j.iref.2026.104938article
AJG 2ABDC A
Weight
0.37

Abstract

Understanding the drivers of greenwashing is crucial for promoting genuine sustainability practices. This study uses data from A-share listed companies between 2009 and 2022, applying resource dependence theory to examine whether and how financial distress affect environmental, social, and governance (ESG) greenwashing. Our findings indicate that financial distress prompts companies to engage in ESG greenwashing. Mechanism analysis shows that financial distress encourages companies to adopt ESG greenwashing by reducing green innovation and harming corporate reputation. Heterogeneity analysis shows that this promoting effect is stronger in companies with high customer concentration, significant media pressure, and intense industry competition. Additionally, ESG greenwashing induced by financial distress leads to a range of economic consequences, including reduced debt financing scale, misallocation of government environmental subsidies, and decreased analyst earnings forecast accuracy. This study enhances the literature on ESG greenwashing drivers by providing fresh perspectives on how financial distress influences corporate sustainability practices.

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https://doi.org/https://doi.org/10.1016/j.iref.2026.104938

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@article{ruiqian2026,
  title        = {{Financial distress and corporate ESG greenwashing}},
  author       = {Ruiqian Li et al.},
  journal      = {International Review of Economics & Finance},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1016/j.iref.2026.104938},
}

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Financial distress and corporate ESG greenwashing

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.