Can climate risk make greenwashing firms change their minds?

Climate risk is a global challenge that raises concerns about how firms react to climate change and whether they continue to engage in greenwashing. Using a dataset of Chinese A-share listed firms, this study investigates the influence of climate risk on greenwashing. The findings show that climate risk inhibits greenwashing, which operates through heightened climate policy uncertainty and increased investor climate risk perceptions. However, further analysis indicates that higher agency costs and digital transformation levels weaken this effect. This study deepens our understanding of the factors that shape greenwashing, expands our knowledge regarding the consequences of climate risk, and establishes the relationship between climate risk and authentic corporate social responsibility.