Greenwash vs. Brownwash: Exaggeration and Undue Modesty in Corporate Sustainability Disclosure

To truly understand greenwashing, one must understand what motivates corporate disclosure decisions. This article:

(1) Describes and tests factors that motivate environmental, social, and governance (ESG) disclosure. Those factors include output growth, deregulation, profit, and external scrutiny.

(2) Identifies a new phenomenon, called brownwashing, whereby companies are deliberately modest in their ESG disclosure.