Sustainability in Energy Companies Under the Lens of Cultural Pressures: When Do We Talk of Greenwashing?

Listed companies allocate resources to various renewable energy and green innovation initiatives driven by economic and environmental, social, and governance (ESG) objectives. Corporations experience increased pressure from stakeholders, potentially hindering the concurrent achievement of economic and ESG goals and leading to phenomena such as greenwashing. This study examines whether these investments and practices represent an authentic transformation in corporate strategy or a mere rebranding attempt. Moreover, it investigates whether cultural dimensions can serve as predictors of greenwashing. The investigation progresses through three stages. First, a homogenous dataset of 59 companies listed in EU countries between 2011 and 2022 is identified. Second, the data envelopment analysis methodology is employed in the second stage to determine the energy companies' efficiency. An effective energy enterprise must simultaneously achieve social, environmental, and economic objectives. The study calculates a greenwashing proxy, creating a binary variable assigning a value of 1 to energy companies not impacted by greenwashing and 0 to those that are. Finally, logistic regression is utilized to investigate the correlation between the variable that denotes energy companies subjected to greenwashing and Hofstede's cultural dimensions. The study reveals that firms operating in countries with high levels of masculinity are more likely to participate in deceptive environmental practices known as “greenwashing.” This outcome has implications for academic and practical purposes, notably regarding stakeholder involvement and the re-evaluation of strategic and decision-making procedures impacted by the interplay of cultural values and green technology. To the best of our knowledge, this study represents the sole investigation that applies this approach to examining non-financial reporting, focusing on the interplay between cultural values, ESG, and their interaction effects.