Beyond Corporate Environmental Disclosure: Tangible Efforts or Greenwashing? The Case of Italian Non‐Financial Listed Companies

Environmental claims are becoming increasingly common in corporate disclosures, but whether they correspond to genuine environmental action rather than greenwashing remains unclear. This paper explores the relationship between companies' environmental claims and their tangible efforts in pursuing environmental sustainability objectives, proxied by environmental investment initiatives. Analyzing Italian non-financial companies listed on the FTSE Italia All-Share Index between 2018 and 2021, the paper shows that companies issuing sustainability plans with a specific environmental commitment are more likely to undertake environmental investment initiatives compared to other companies. Conversely, companies that merely report on environmental performance or declare carbon neutrality goals do not exhibit statistically different corporate behaviors in terms of environmental investment initiatives, raising concerns about potential greenwashing. This paper contributes to the greenwashing literature by addressing limitations of prior research that focused mainly on actual environmental performance, emphasizing instead the relevance of considering firms' efforts in pursuing environmental sustainability objectives.