OXFORD, UK: The degree to which companies indulge in "greenwashing" – otherwise described as bovine effluent – is more likely to occur when people believe more in the virtue of competition that in individual responsibility.
This is the conclusion of Thomas Roulet, a research fellow at Oxford University's Saïd Business School, who claims that when corporations say one thing and do another in promoting Corporate Social Responsibility (CSR) it "is not far from the truth".
In a new paper Roulet and his co-author Samuel Touboul of the IPAG Business School argue that in countries where people believe strongly in the virtues of competition, firms "make a lot of noise about CSR but to do very little"; while in countries where liberalism is defined as individual responsibility, companies are more likely to focus on concrete actions.
"Our research suggest[s] a highly complex relationship between beliefs in particular virtues of economic liberalism and the socially responsible behaviours of organisations," says Roulet. "It also raises a number of subtle questions relating to the respective roles of business and the state. When a small state is favoured, for example, it seems more likely that companies will step in to fill the gap."
Using qualitative and quantitative methods, the researchers found that developed market economies in Switzerland, the U.S., New Zealand and Canada have higher cultural beliefs in favour of individual responsibility.
Conversely, the two researchers discovered that developing countries such as India, China, and Morocco, where belief in the virtue of individual responsibility is apparently low while the virtue of competition is high, companies are more likely to express CSR using the methane-related euphemism.
However in a country like France, where the population believes in the virtue of individual responsibility but prefers an absence of competition, companies are less likely to greenwash as they tend to implement socially and environmentally responsible actions without specifically promoting them.
"We tend to assume that firms are inherently selfish and more likely to indulge in symbolic CSR practices that look good, such as getting green accreditation, than actively trying to improve stakeholders' welfare by, for example, reducing CO₂ emissions," notes Roulet.
"In fact, our research has shown that what a firm does in the context of CSR is influenced by the shared cultural expectations in its country of origin, which either unconsciously encourages greenwashing or demands substantive action. Subtle distinctions between different countries' interpretations of what a liberal economy is all about can lead to very different attitudes and actions when it comes to how businesses operate in relation to society," he concludes.