| Project/Area Number |
22K13518
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| Research Category |
Grant-in-Aid for Early-Career Scientists
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| Allocation Type | Multi-year Fund |
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| Review Section |
Basic Section 07100:Accounting-related
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| Research Institution | Nagoya University of Commerce & Business |
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Principal Investigator |
Frendy 名古屋商科大学, 商学部, 准教授 (00825218)
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| Project Period (FY) |
2022-04-01 – 2025-03-31
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| Project Status |
Granted (Fiscal Year 2023)
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| Budget Amount *help |
¥4,160,000 (Direct Cost: ¥3,200,000、Indirect Cost: ¥960,000)
Fiscal Year 2024: ¥780,000 (Direct Cost: ¥600,000、Indirect Cost: ¥180,000)
Fiscal Year 2023: ¥1,430,000 (Direct Cost: ¥1,100,000、Indirect Cost: ¥330,000)
Fiscal Year 2022: ¥1,950,000 (Direct Cost: ¥1,500,000、Indirect Cost: ¥450,000)
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| Keywords | climate change / disclosures / nonfinancial / CDP / non-financial / ESG / Sustainable Development / Greenwashing / Japan / Financial Reporting |
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| Outline of Research at the Start |
Japan is considered as one of the leading countries with the fastest growing and the highest number of companies that disclose ESG information. This research aims develop robust measures of greenwashing, examine mitigating corporate governance characteristics, and investigate its effect on accounting conservatism. This research provides insights for Japanese capital market participants and regulators concerned with the reliability of ESG information.
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| Outline of Annual Research Achievements |
The study develops a measure of environmental greenwashing, defined as the overstatement of companies' environmental disclosures compared to their actual performance. It examines the relationship between greenwashing probability and environmental performance, and investigates the impact of Japanese firm-level corporate governance and third-party assurance on greenwashing. The analysis of 420 firm-years from 2018-2019 reveals that the likelihood of greenwashing is negatively associated with environmental performance, supporting the reliability of the greenwashing measure. The study finds that Japanese corporate governance characteristics are ineffective at mitigating greenwashing, and assurance can be exploited by greenwashing companies to increase their overstatement.
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| Current Status of Research Progress |
Current Status of Research Progress
2: Research has progressed on the whole more than it was originally planned.
Reason
The greenwashing manuscript was submitted to the Meditari Accountancy Research journal and is currently undergoing the first round of review. A second greenwashing manuscript is currently being drafted.
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| Strategy for Future Research Activity |
The first round of peer review for the greenwashing paper will be completed with a submission in early June. A second working paper, which explores the relationship between greenwashing and accounting conservatism, will be finished by the middle of July. The second paper will then be submitted for presentation at international conferences.
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