Corporate Social Responsibility in Supply Chain: Green or Greenwashing?

Finance Webinar（2021-19)

Topic: Corporate Social Responsibility in Supply Chain: Green or Greenwashing?

Speaker: Yu Zhang, Peking University

Time: Friday, May 14, 12:00–13:00 p.m. Beijing Time

Location: K01, Guanghua Building 2

Abstract:

Perception regarding a focal firm’s corporate social responsibility (CSR) depends not only on itself but also on its known suppliers. This paper provides the first empirical evidence linking CSR and supply chain information disclosure together. Specifically, it uncovers robust evidence that firms selectively disclose environmentally responsible suppliers, controlling for other considerations in supply chain disclosure. Exogenous variations in abnormal temperatures around the world drive variations in the selective disclosure of “clean” suppliers, supporting a causal interpretation of our finding. Supply chain greenwashing is more prevalent for firms who face higher competition, care more about their brand awareness, and for firms that are more profit-driven and held more by institutional investors. The greenwashing behavior mitigates after implementing mandatory CSR disclosure policies. Finally, firms who greenwash supply chains observe an increase in sales, but only for the short term.

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