GREENWASHING: A CONSUMER PERSPECTIVE

Abstract

The purpose of this research is to investigate the effects of green corporate advertising and corporate environmental performance. The study uses attribution theory borrowed from general psychology to explain factors of effectiveness in green advertising. An experiment with N=305 university students in the Northwestern United States was conducted. Findings indicate that there is a significant interaction effect between green advertising communication and Corporate Environmental Performance such that while under positive firm performance green advertising results in slightly higher attitudes toward the brand than general positive corporate messaging, under negative firm performance green advertising results in significantly lower brand attitudes than when a general corporate message is used. [PUBLICATION ABSTRACT]

Headnote

ABSTRACT. The purpose of this research is to investigate the effects of green corporate advertising and corporate environmental performance. The study uses attribution theory borrowed from general psychology to explain factors of effectiveness in green advertising. An experiment with N=305 university students in the Northwestern United States was conducted. Findings indicate that there is a significant interaction effect between green advertising communication and Corporate Environmental Performance such that while under positive firm performance green advertising results in slightly higher attitudes toward the brand than general positive corporate messaging, under negative firm performance green advertising results in significantly lower brand attitudes than when a general corporate message is used.

JEL Classification : E21, Q57

Keywords: Attribution theory, green marketing, green advertising, greenwashing, corporate advertising, consumer attitudes

Introduction

The purpose of this research is to investigate the effects of green corporate advertising and corporate environmental performance. The study uses attribution theory borrowed from general psychology to explain factors of effectiveness in green advertising. The contribution of the study lies in the fact that it offers a deeper explanation for consumer reactions to green advertising and it links greenwashing to consumer responses.

As the BP oil spill and the company's preceding "Beyond Petroleum" campaign illustrate, unfulfilled promises in the green marketing realm can be oil on fire. Would BP have been better offnot touting its green credentials if management was not committed to live up to it in the form of higher corporate environmental performance? Or conversely, have the green communication efforts helped prevent a larger negative brand attitude drop after the accident? This paper is trying to help answer such questions.

Literature review Greenwashing

General greenwashing literature

The literature on "greenwashing," the intentional misrepreseation of a firm's environmental efforts (or the lack of it) is ever expanding (Alves, 2009; Delmas and Burbano, 2011; Furlow, 2010; Gillespie, 2008; Greer and Bruno, 1996; Paladino and Pandit, 2012; Ramus and Montiel, 2005; TerraChoice, 2010). This line of scholarly work takes a decidedly macro-approach, it conducts its investigations in the sociological, legal, ethical-critical realm.

Greenwashing: a consumer perspective

But how do consumers react to such greenwashing attempts by corporations? What are the micro-level consumer processes that take place? One of the most important contribution this paper is attempting to achieve is to link the disparate greenwashing literature to the consumer behavior and communications research literatures by offering an explanation for consumer reactions to greenwashing.

Attribution theory

Attribution theory in psychology and general marketing

Part of the answer to how consumers react to greenwashing may lie in consumer attributions. Attribution theory (Harvey and Weary, 1984; Heider, 1944; Kelley, 1971; Kelley and Michela, 1980) is a general psychological theory, which describes how consumers explain others' behavior by "attributing" causes to what they may observe. Similarly, in marketing (Folkes, 1988; Mizerski, Golden, and Kernan, 1979; Oliver, 1993; Weiner, 1986, 2000), consumers may attribute causes to firms' behavior explaining in their minds why a certain event happened. Attributions tell us about the motives of why people do what they do.

Application of attribution theory to green marketing

In our context, if a consumer perceives a certain behavior relating to the environment by a firm (e.g., polluting behavior, exceptional attention paid to environmentally-friendly production technologies, etc.), they may develop cognitive explanations why the firm does these things (e.g., for self-interest, for genuine care about nature, for pragmatic business reasons, etc.). Further, when consumers observe a firm's communications (as distinct from their actual behavior), they may do the same (e.g., they may analyze why a company said a particular thing and whether it is truthful).

These processes mediate the relationship between corporate performance and communications and outcome variables such as brand attitudes. Brand attitudes in this context are not formed unmediated, because there is a level of suspicion already in consumers' head whether firms' attempts to influence the public (either through talk or actual behavior) are genuine.

Attitude change theory

Classic attitude change theory applied to advertising including the Hierarchy of Effects model (Colley, 1961) or the Elaboration Likelihood Model (Petty and Cacioppo, 1986) would predict that a stimulus object causes attitude change as moderated by the routes persuasion takes or the stage at which the subject is versus the persuasion process.

Application of attitude change theory to green marketing

Implicitly, firms such as BP accept this theory when they put out advertising and other forms of integrated marketing communications in cases of negative pre-existing consumer attitudes, hoping that the positive stimulus material will shiftattitudes in a positive direction. Such thinking presupposes that attitudes are additive: they add up - and if we add positive attitude-shifting stimulus to the pre-existing negative ones, attitudes will improve.

Attribution theory complements attitude change theory

Attribution theory makes this rather simplistic argument more complex by suggesting that internal mental processes can accelerate or decelerate the attitude change process. For instance, if consumers are already skeptical about a particular firm's green credentials (or indeed, if they are skeptical about an entire industry), the attributional processes that "kick in" may reverse any benefit that a supposedly positive advertising message may achieve.

Advertising messages may in fact cause a backlash against the company due to such attributions (indeed, much of BP's post-catastrophe advertising may be subject to such attributional damage, similarly to retrospective consumer re-evaluations of their Beyond Petroleum campaign).

Corporate Environmental Performance

Consumer evaluations of Corporate Environmental Performance are similarly influenced by attributional processes. The construct of Corporate Environmental Performance (Delmas and Blass, 2010; Gunningham, 2009; Lee and Lounsbury, 2011; Salo, 2008; Xie and Hayase, 2007) depicts a firm's behavior towards the environment and comprises of internal processes and external impact (physical, regulatory).

Perceived Corporate Environmental Performance as subject to attributional processes

Consumers perceptions of such behavior are tainted by many factors (they may not perceive accurately what the firm is doing, competitors may try to denigrate the company's efforts). The modeling of attitude change is not simple even if we exclude such factors and assume perfect information available for consumers, free of competitive interference. Consumers do not simply add up attitudinal information about a company's environmental records. They may also investigate the reasons why certain companies engage in particular environmental efforts. Such attributional processes may result in skeptical cognitions and eventually result in negative attitude shifts.

For instance, consumers may perceive BP's actions (as reported on by the media) with skepticism, assuming that such actions are just part of a media ploy to cover up deep-running problems within the organization related to their environmental record. Past Corporate Environmental Performance failures (such as past oil leaks, explosions, etc.) may develop over time into a general skeptical stance against the company.

Similarly to integrated marketing communication (most notably advertising) messages, it is not only the target company's past that influences the content of the attributions about the company's actions. The wider industry climate and indeed general overall cognitions about corporate ethics, governance and the state of the environment may influence such attributional processes and resulting attitudes. In BP's case, the notoriously bad environmental performance of oil companies in general is a strong reason for skepticism among consumers.

Interaction between green communications and Corporate Environmental Performance

The really interesting question, however, is this: how do the two variables of green marketing communication and Corporate Environmental Performance interact? What are the consumer processes (detailed above) when the two forms of stimulus (persuasive attempts and actual objective performance) are present simultaneously (as they always are in real life). Does it make a difference if a firm walks the talk or if it doesn't walk the talk?

We have reasons to believe that attributional processes would be different if there is a discrepancy between messages and action. Indeed, conflicting message-action pairs can strengthen already existing skepticism among consumers or generate newly formed skeptical thoughts. Therefore we would expect that the attributional processes may be different if there are positive news about a company vs. when there are negative news; and the advertising shown in these two cases may result in different levels of attitudes.

Empirical evidence for the interaction and attribution theory's role

Attribution theory has not been applied in this specific context in green advertising. The Corporate Social Responsibility literature, however, shows some parallels (Ellen, Webb, and Mohr, 2006; Forehand and Grier, 2003; Geue and Plewa, 2009; Klein and Dawar, 2004; Swaen and Vanhamme, 2004; Vlachos et al., 2009; Webb and Mohr, 1998; Yoon, Gürhan- Canli, and Schwarz, 2006). Research shows that consumers do not take CSR at face value and attributional processes are indeed present. The attributions affect brand attitudes negatively (Walker et al., 2010). Higher levels of perceived deception were related to lower organizational credibility, lower favorable attitudes towards the brand (Newell, Goldsmith, and Banzhaf, 1998). The fit between the company's core business and their selected cause and length of commitment also affects the attributions formed by consumers. The lower the perceived fit, the higher the egoistic attributions (Ellen, Webb, and Mohr, 2006; Forehand and Grier, 2003).

Hypothesis

Based on the literature review above, therefore, we test the following hypothesis:

H1: There is an interaction effect between green advertising messaging and firms' environmental performance such that the negative impact of low performance on brand attitude is strengthened by the presence of green advertising messaging (vs. general corporate advertising and no advertising).

Method

Design

In order to test the hypothesis, we developed a 3x3 between-subjects experimental design. We manipulated Corporate Environmental Performance at three levels: high performance vs. low performance vs. no performance information provided. Similarly, we varied green marketing communication at three levels (green communication messaging vs. general corporate messaging vs. no communication message delivered). We did not collect data for the last cell (no communication x no Corporate Environmental Performance information) because without any information on the target (fictitious) company respondents would not have been able to interpret the dependent measure of brand attitudes. A three level design was used instead of a simple test and control design so that we could separate the effects of green advertising and advertising per se and positive information and any information, respectively. A similar design was utilized by Parguel, BenoÎt-Moreau, and Larceneux (2011).

Procedure

Undergraduate students at a large Northwestern US university were invited to participate in the experiment. Invitations were sent out via email and directed participating students to a professionally designed Qualtrics web-based questionnaire. Participants were randomly assigned to the 8 different experimental cells. A total of N=305 subjects completed the experiment.

The experiment took 20 minutes to complete. Subjects were informed that participation is purely voluntary and that they could stop at any point during the survey. They were also promised that all information collected would be kept strictly anonymous and analyses would only be on aggregate level. The study was approved by the university's Institutional Review Board (IRB) for compliance with Human Subjects research. Ten randomly drawn participants were offered a $20 giftcard from a local bookstore, which served as an incentive for participation.

Manipulations and dependent measure

Manipulations

Stimulus materials were developed through a multi-step process to maximize internal and external validity. First, the relevant literature was reviewed both for green communications and Corporate Environmental Performance. A review of corporate ads in business publications (such as Fortune, The Economist, Harvard Business Review, etc.) followed so that we be aware of what types of green communications are used in real life settings. An initial draftof print advertising concepts and performance scenarios were developed.

Next, these materials were qualitatively tested by five faculty members in advertising and marketing who provided qualitative feedback. As a result, the text of the ads and scenarios were slightly modified.

Third, the print ads were professionally designed in InDesign. Fourth, the professionally produced stimulus ads and scenarios were qualitatively pretested by undergraduate students, separate from the main sample. The qualitative feedback suggested that the ads and scenarios clearly communicated the message intended and were perceived as realistic. Finally, a quantitative pretest/manipulation check was conducted. An independent sample of N=69 students were shown the two ads on a large screen in a classroom and asked to rate their agreement or disagreement with two statements after exposure to each ad. For the test ad (with the environmental message), as expected, subjects rated the company environmentally friendly (M=4.19) more so than innovative (message of the general corporate control ad) (M=3.25). The control ad resulted in subjects rating the fictitious company innovative (M=3.14) more so than environmentally friendly (M=2.32). All differences were significant at p<0.001.

Dependent measure

The dependent variable used in this analysis was attitude toward the brand. A validated scale from the literature was used: a 3-item, 7-point semantic differential were scale based on Muehling and Laczniak (1988).

Findings

Dependent scale reliability

Reliability assessment was conducted using Cronbach's α. The mean scores, variances and reliability index were the following for the 3-item attitude toward brand scale: M=3.6, Variance=2.6, α ranged from 0.92 to 0.96). This exceeds the generally accepted guideline of 0.70 (Hair et al., 1998, p. 118).

Hypothesis testing

In order to test the hypothesis, an analysis of variance (two-way ANOVA) test with green communications and Corporate Environmental Performance as independent variables and attitude toward the corporate brand as dependent variable was conducted. The results of the ANOVA test are provided in Table 1 below.

As seen in the table above, the interaction of IV1 (green advertising) and IV2 (Corporate Environmental Performance) is significant at p<0.01, which suggests that attitude toward the brand (the dependent variable) depends on the interaction between both the independent variables. Therefore, we reject the null hypothesis.

If we scrutinize the means levels, we find the following. When advertising is followed by a high performance message, attitude toward the brand is most favorable for no advertising (M=5.1), followed by environmental ad (M=4.2), followed by general corporate ad (M=4.1). The order is reversed when the ad is followed by a negative performance message with attitude toward brand being the most favorable for corporate ad (M=2.8), followed by environmental ad (M=2.5) and no ad (M=2.1). Under the no message or performance information condition, the corporate ad (M=4.1) outperforms the environmental ad (M=3.7).

Discussion

To summarize, as predicted by attribution theory, we found supporting evidence that an interaction effect exists between green advertising messaging and Corporate Environmental Performance. Contrary to what naïve applications of attitude change theory may suggest, green advertising can in fact harm companies - it may be that some firms would be better offstaying silent. This is especially true for negative performance scenarios (as we argue, as a result of negative consumer attributions about company intentions) but also holds for positive scenarios (attitude toward the company is lower after seeing green advertising than not seeing any advertising at all).

Research implications suggest that attribution theory is a good tool to study green marketing communications and consumer perceptions of Corporate Environmental Performance. Future research can investigate the precise content of such attributions by either asking consumers open-ended about what they think corporations may be intending to do, or offering them attribution scales developed for this specific purpose (for example, Webb and Mohr, 1998).

The main implication for managers is that green marketing efforts do not automatically increase brand perceptions (or ameliorate negative perceptions). Attributions about company intent should also be managed. Managers of green efforts need to know precisely what consumers think about the company's intent, so that perceptions of corporate posturing be avoided. Further, our research shows that greenwashing is not only an ethical problem for companies but also a business one: it can easily result in decreased brand perceptions and ultimately lower financial performance in the long run.

Conclusion

We need to learn much more about consumer perceptions of green marketing efforts. Our study is only the first step. Attribution theory seems to be a good path to follow to decipher the nuanced pattern of consumer reaction. It seems certain that greenwashing (the disingenuous covering up of subpar environmental performance) results in negative consumer attributions. As Kotler suggests (2011), the best policy both in an ethical and in a business sense, is to clean up one's environmental act.

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