Divinus Oppong-Tawiah, a researcher from York University’s Schulich School of Business, has developed a linguistic-based tool to detect “greenwashing” – the growing practice of companies using social media to communicate exaggerated, misleading or outright false claims about their environmental performance.
The findings are contained in an article published recently in the journal Sustainability. The article, titled “Corporate Communication as ‘Fake News’: Firms’ Greenwashing on Twitter,” was co-authored by Oppong-Tawiah, who is an assistant professor of operations management and information systems at the Schulich School of Business, together with Jane Webster, professor emeritus and E. Marie Shantz Chair of Digital Technology at the Smith School of Business at Queen’s University.
The researchers examined Twitter messages posted by companies in two industries with significant environmental footprints, namely, the oil and gas and automotive industries. Based on their findings, the researchers developed a new automatic deviation-based linguistic tool that is able to detect organizational greenwashing.
Researchers also showed that greenwashing is significantly associated with financial market performance because of its potential to erode shareholder value and damage the firm’s long-term financial health.
Firms are increasingly adopting social media for broadcasting their corporate social responsibility and green initiatives, the study notes. For stakeholders, this can be a positive development in that it exposes firms to greater scrutiny. However, firms suffer significant reputational damage and adverse market reaction in the event they are wrongly accused of faking green claims. Thus, until stakeholders can reliably detect greenwashing, firms remain hesitant to disclose all or part of their environmental performance on social media for fear of wrong accusation, notes Oppong-Tawiah.
“Fake news on social media has engulfed the world of politics in recent years and is now posing the same threat in other areas, such as corporate social responsibility communications,” says Oppong-Tawiah. “Our research work addresses an urgent need to identify greenwashing and measure its effects.”