Sustainability-oriented markets increasingly depend on environmental communication to coordinate trust, legitimacy, and responsible exchange. However, the fast expansion of sustainability claims across digitally mediated markets has intensified concerns regarding greenwashing and declining informational reliability. Existing research predominantly explains greenwashing as either deceptive corporate communication or a consumer perception outcome, offering limited understanding of the broader informational conditions that weaken sustainability-oriented market systems. To address this gap, the present study reconceptualizes greenwashing as a condition of sustainability signal failure, where sustainability claims lose their capacity to reliably communicate substantive environmental commitment. Using signaling theory, institutional theory, and macromarketing perspectives, this study introduces sustainability signal diagnosticity as a core explanatory mechanism reflecting the inferential reliability of sustainability communication. The study further develops a configurational framework explaining how structural signal deficiencies, interpretive processes, and institutional conditions interact to undermine informational integrity within contemporary marketing systems.
Anupam et al. (Tue,) studied this question.