Greenwashing is the practice of making an organization’s activities or products appear more environmentally responsible or friendly than they really are to influence consumer behavior or create a more positive image. The term is derived from a combination of green, reflecting an environmental focus and sustainability, and whitewashing, which refers to covering something over, either literally (with white paint) or figuratively (with biased data or political action). In a world where consumers, regulators, and competitors increasingly scrutinize a firm’s environmental impact, appearing green can lead to increased sales, greater perceived legitimacy, and more favorable regulatory treatment. Given the obvious temptation for the firm to gain these benefits, governments, consumer agencies, and competitors are keeping a closer watch than ever before on whether firms’ claims match ...

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