Same Firms, Different Verdicts: ESG Rating Choice and the Measurement of Greenwashing
This study proposes a “Disclosure–Performance Gap” (DPG) metric to quantify the discrepancy between voluntary environmental disclosures and actual emissions among large European firms at the close of the voluntary disclosure era, thereby measuring corporate greenwashing. Constructing a sample through a six-stage screening process, the authors employ OLS regressions with HC3 heteroskedasticity-robust standard errors and conduct multiple robustness checks. Results indicate that inclusion in flagship ESG indices (β = +0.78) and endorsement of the Task Force on Climate-related Financial Disclosures (TCFD) significantly widen the DPG, whereas renewable energy adoption (β = −0.31) and environmental capital expenditures (β = −0.22) effectively narrow it. The findings further reveal that greenwashing detection is highly sensitive to the choice of ESG rating framework, underscoring the DPG’s novel utility in providing a unified assessment of the authenticity of firms’ environmental performance.