Approaches for detecting greenwashing in non-financial reporting: the auditor’s perspective
Journal
Journal of Financial Reporting and Accounting
ISSN
1985-2517
ISSN-Digital
2042-5856
Type
journal article
Date Issued
2025-07-29
Author(s)
Abstract
Purpose
A recent systematic methodological review (Bernini et al., 2024) found that the current greenwashing measurement is predominantly confined to stakeholders’ subjective, perception-based measures and concluded that knowledge about greenwashing in practice is still limited. Against this background, the purpose of this viewpoint article is to discuss more objective approaches to detect greenwashing – including not only those that are part of the classical auditing arsenal but also innovative computational and technology-based approaches – that external and internal auditors use in the context of sustainability assurance. In doing so, it addresses a global societal challenge of environmental sustainability to which greenwashing contributes.
Design/methodology/approach
By conducting a literature review, this viewpoint draws upon the ongoing research on greenwashing in the business, management and accounting fields as well as upon the authors’ own experiences in the assurance of non-financial reports.
Findings
The relevant current literature was analysed to identify critical aspects of, challenges in and opportunities for detecting greenwashing in non-financial reporting from the auditor’s perspective. Current scholarly research frequently relies on secondary data to quantify perception-based, subjective measures of greenwashing, whereas sustainability assurance demands more objective measures. This situation signals the existence of a research–practice gap. The authors outline some objective approaches that external and internal auditors can implement to detect greenwashing in non-financial reporting.
Research limitations/implications
Future research on non-financial reporting, technological applications and systems thinking theory is needed to fully evaluate the potential of the proposed solutions in mitigating greenwashing.
Practical implications
The insights of this viewpoint paper can be used by auditors, regulators and educators, including in executive education and courses that target sustainability professionals. The results can be used to better align non-financial reporting research and practice, including that of the continuously evolving approaches to detecting greenwashing.
Originality/value
As a collaborative effort of external and internal auditors, sustainability assurance can aid firms to avoid greenwashing. In the context of non-financial reporting, this viewpoint article provides insights from the perspective of external and internal auditors on approaches to the detection of greenwashing and points out the relevance of further research on this subject to address the global societal challenge of environmental sustainability to which greenwashing contributes. This viewpoint paper also provides insights to practitioners who work in the area of non-financial reporting.
A recent systematic methodological review (Bernini et al., 2024) found that the current greenwashing measurement is predominantly confined to stakeholders’ subjective, perception-based measures and concluded that knowledge about greenwashing in practice is still limited. Against this background, the purpose of this viewpoint article is to discuss more objective approaches to detect greenwashing – including not only those that are part of the classical auditing arsenal but also innovative computational and technology-based approaches – that external and internal auditors use in the context of sustainability assurance. In doing so, it addresses a global societal challenge of environmental sustainability to which greenwashing contributes.
Design/methodology/approach
By conducting a literature review, this viewpoint draws upon the ongoing research on greenwashing in the business, management and accounting fields as well as upon the authors’ own experiences in the assurance of non-financial reports.
Findings
The relevant current literature was analysed to identify critical aspects of, challenges in and opportunities for detecting greenwashing in non-financial reporting from the auditor’s perspective. Current scholarly research frequently relies on secondary data to quantify perception-based, subjective measures of greenwashing, whereas sustainability assurance demands more objective measures. This situation signals the existence of a research–practice gap. The authors outline some objective approaches that external and internal auditors can implement to detect greenwashing in non-financial reporting.
Research limitations/implications
Future research on non-financial reporting, technological applications and systems thinking theory is needed to fully evaluate the potential of the proposed solutions in mitigating greenwashing.
Practical implications
The insights of this viewpoint paper can be used by auditors, regulators and educators, including in executive education and courses that target sustainability professionals. The results can be used to better align non-financial reporting research and practice, including that of the continuously evolving approaches to detecting greenwashing.
Originality/value
As a collaborative effort of external and internal auditors, sustainability assurance can aid firms to avoid greenwashing. In the context of non-financial reporting, this viewpoint article provides insights from the perspective of external and internal auditors on approaches to the detection of greenwashing and points out the relevance of further research on this subject to address the global societal challenge of environmental sustainability to which greenwashing contributes. This viewpoint paper also provides insights to practitioners who work in the area of non-financial reporting.
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Emerald
Subject(s)
Division(s)