Greenwashing is a phenomenon that is linked to scandals that often occur at the supply-chain level. Nevertheless, research on this subject remains in its infancy; much more is needed to advance our understanding of stakeholders’ reactions to greenwashing. We propose here a new typology of greenwashing, based on the locus of discrepancy, i.e. the point along the supply-chain where the discrepancy between ‘responsible words’ and ‘irresponsible walks’ occurs. With three experiments, we tested how the different forms of greenwashing affect stakeholders’ (...) reactions, from both ethical and business perspectives. We developed our hypotheses by building on attribution theory, which seeks to account for how observers construct perceptions about events. We had anticipated that the more internal, controllable and intentional the discrepancy is, the greater the blame attributed to a company is, and the lower the intention to invest will be. When greenwashing occurs at a company level, this results in a higher level of blame attribution, while the intention to invest falls. Indirect greenwashing refers to a misbehaviour perpetrated by a supplier who claims to be sustainable, and which results in a less negative impact on a supplied company. We also propose the vicarious greenwashing, which occurs when the behaviour of a supplier is in breach of a company’s claims of sustainability. This type of greenwashing is nevertheless detrimental to investment. The findings here advance our understanding of how greenwashing shapes stakeholders’ reactions, and highlight the need for the careful management of the supply-chain. (shrink)

Crowdfunded microfinance provides financial resources to impoverished entrepreneurs across the globe based on online appeals describing the entrepreneur’s values and venture potential and is considered a key player in the ethical finance movement. Despite knowledge that the content of the appeals impacts funding success, little is known regarding the role of religious expression, which is common and consequential in socially-oriented contexts. We leverage role congruity theory to address a theoretical tension concerning the effects of religious expression on crowdfunded microfinance funding (...) outcomes. Religious expression is associated with perceptions of trustworthiness, rule-following, and ethicality—qualities that would suggest an entrepreneur would likely avoid opportunist behavior and repay the loan. However, appeals to a higher power may be incongruent with the role of an entrepreneur to the extent that such expression communicates a lack of proactiveness and self-reliance. We use a two-study design to help resolve this tension. Our field study incorporating 253,130 loans from Kiva reveals that religious expression negatively influences funding, particularly for women. Our experiment using 1,795 individual loan assessments shows that the negative influence of religious expression is attenuated when individual lenders exhibit higher levels of religiosity. Post hoc analysis suggests campaigns can mitigate the negative impact of religious expression by being careful to also include aspects highlighting an entrepreneurial orientation. Overall, our work extends prior research suggesting that language tied to ethical or virtuous behaviors is generally not rewarded by lenders as using such language may make the applicant appear inconsistent with role of a stereotypical entrepreneur. (shrink)