Greenwashing affects brand perception, trust, and buying – Study

Deceptive green marketing, also known as greenwashing, can create a negative impact on consumer trust, brand perception, and buying behaviour, according to the latest research conducted by the Indian Institute of Management Lucknow Faculty.

The study found that greenwashing not only fools people but also damages brand trust and discourages sustainable shopping. When consumers grow sceptical about a brand's perceived exaggerating or faking green credentials, their positive feelings about the brand drop. Moreover, consumers with greater environmental knowledge are more likely to critically assess eco-claims made by the brands, and react more strongly today.

Speaking about the real-world impact of the research, the key researcher, Dr Sushant Kumar, assistant professor – of marketing management, at IIM Lucknow, said, “Although consumers appreciate green claims, greenwashing is dangerous for brands. A brand’s green claims should be substantiated by evidence that can be verified by consumers.”

Greenwashing has become a common malpractice among brands to attract consumers, build positive perceptions, and manipulate buying behaviour. The studies conducted earlier were not able to assess how it could affect consumer attitudes towards a brand. However, the research team headed by IIM Lucknow faculty succeeded in identifying and studying the psychology of how consumers interpret and react to greenwashing.

To achieve this, the team developed a framework that combines 'Attribution Theory' and 'Elaboration Likelihood Model'. The framework emphasises the situational involvement, i.e. the degree of personal relevance a consumer assigns to environmental issues, helped in analysing ‘why’ and ’how’ consumers react to greenwashing. The research team tested the developed framework on 353 consumers from the United States. It analysed the data using structural equation modelling, a method mostly used in the social and behavioural science fields.

IIM Lucknow’s Dr Kumar collaborated with Dr Anis Ur Rehman from the University of Hail, Dr Rsha Alghafes from Princess Nourah bint Abdulrahman University, Dr  Laura Broccardo from University of Turin, and Dr Ajay Kumar Patel from Institute of Management Studies (IMS) Ghaziabad, the study proves greenwashing is a risky marketing strategy and brands that aim to be truly sustainable must ensure transparency and honesty in their messaging The research paper has been published in Business Strategy and the Environment journal.

The insights can prove valuable to brands, regulators, and eco-conscious consumers, paving the way for authentic green branding. As the next step of the research, the research team plans to explore many other aspects of consumer behaviour such as recommendation of a brand or product involved in greenwashing. The team plans to study the consumers’ sentiments while consuming green brands and later discover false claims by the brand.

The research was funded by Princess Nourah bint Abdulrahman University Riyadh, Saudi Arabia and the free access to the journal article was facilitated by Universita degli Studi di Torino, as part of the Wiley - CRUI-CARE agreement.