Regulation of environmental, social and governance disclosure greenwashing behaviors considering the risk preference of enterprises

The greenwashing behaviors (GWBs) of enterprises have become the primary obstacle of environmental, social and governance (ESG) disclosure. This paper focuses on the collaborative regulation of GWBs in ESG disclosure; explores the interactive behavior among governments, enterprises, and investors; and presents the tripartite evolutionary game (Model I). We further analyze the stability strategy and key influence factors of each participant. Subsequently, considering enterprises' risk preference, the extended tripartite game model (Model II) is also investigated. Finally, we reveal evolutionarily stable strategies and conduct a sensitivity analysis using the simulation. The results demonstrate the following: 1) the initial strategy selection of participants is critical to the evolution of equilibrium strategies; 2) punishment combats GWBs more effectively than reward, with only moderate punishment and reward intensity being conducive to preventing greenwashing; and 3) when enterprises are risk aversion, strengthening regulation is more effective in preventing GWBs. This paper gives a new perspective for preventing greenwashing in ESG disclosure from the insights of collaborative regulation and provides policymakers significant references to improve ESG greenwashing governance.