Executives with high levels of green cognition play key roles in enterprises in terms of choosing green development and fundamentally guaranteeing the sustainable development of China’s real economy. On the basis of risk aversion theory, the relationships among executives’ green cognition level, risk preferences and environmental, social, and governance (ESG) greenwashing are examined. The findings reveal that executives with high levels of green cognition inhibit listed companies from engaging in high-risk ESG greenwashing. This conclusion remains valid after controlling for endogeneity. Heterogeneity analysis reveals that the inhibitory effect of executives’ green cognition level on ESG greenwashing is greater for non-heavily polluting enterprises and those with relatively low internal operational risks. Mechanistic analysis indicates that under the influence of green cognition, executives inhibit high-risk ESG report greenwashing by actively accepting environmental social responsibility and reducing their high-risk preference. Additionally, considering risk scenarios, we determine that greater external environmental uncertainty risk amplifies the inhibitory effect of high levels of green cognition among executives on ESG greenwashing. Overall, this paper reveals two new mechanisms through which high levels of green cognition among executives influence greenwashing, deepening the theory of corporate greenwashing.
Liu et al. (Sat,) studied this question.