Greenwashing and Greenfraud in Corporate Sustainability Practices: An Analysis of the Gap Between Claims and Environmental Performance

Dessy Adelin; Jonnardi; Primadonna Ratna Mutumanikam; Laela Lanjarsih

doi:10.59890/ijaeam.v4i3.199

Authors

Dessy Adelin Perbanas Institute Jakarta
Jonnardi Universitas Tarumanagara
Primadonna Ratna Mutumanikam Perbanas Institute Jakarta
Laela Lanjarsih Perbanas Institute Jakarta

DOI:

https://doi.org/10.59890/ijaeam.v4i3.199

Keywords:

Greenwashing, Greenfraud, Corporate Sustainability, Environmental Performance, ESG

Abstract

The growing attention to sustainability issues has pushed companies to integrate environmental aspects into their business strategies and corporate reporting. As stakeholders increasingly demand transparency and environmental responsibility, many companies are competing to build an eco-friendly image through sustainability disclosures and Environmental, Social, and Governance (ESG) practices. However, this trend has also led to greenwashing and greenfraud, which can mislead investors, consumers, and the public. Greenwashing refers to companies trying to create a positive environmental image without adequate environmental performance, while greenfraud involves more serious actions, such as deliberately manipulating or falsifying environmental information.. This article aims to analyze the gap between the sustainability claims made by companies and the actual environmental performance achieved. The method used is a literature study by reviewing various research, sustainability reports, and scientific publications related to greenwashing, green fraud, and corporate sustainability practices. The results of the study show that the gap between claims and environmental performance is still widely found across various industry sectors. The main factors driving these practices include market pressure, the need for social legitimacy, weak regulations, and the lack of independent verification mechanisms. The impact not only lowers public trust but also has the potential to reduce company value in the long term. Therefore, there needs to be more transparency, stricter reporting standards, and effective oversight to make sure that companies' sustainability claims reflect the actual environmental conditions

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