Unmasking supplier greenwashing: how information sharing and green trust shape clients’ sustainability

Purpose This study investigates the impact of supplier greenwashing on client sustainability, focusing on environmental, social and economic dimensions. It also emphasizes the mediating roles of information sharing and green trust in this relationship. By applying signalling theory, the research aims to deepen our understanding of the repercussions of greenwashing in interfirm relationships and identify potential mitigating or amplifying factors. Design/methodology/approach A sample of 312 companies were analysed using a structural equation model implemented with Analysis of Moment Structures (AMOS). Findings The study reveals that greenwashing negatively affects sustainability both directly and indirectly. Trust and information sharing emerge as crucial mediators in this dynamic, shedding light on the intricate interplay between greenwashing and sustainability. Originality/value This research contributes novelty by comprehensively examining the effects of supplier greenwashing practices on client sustainability within interfirm relationships. The application of signalling theory provides a nuanced understanding, highlighting the mediating roles of information sharing and green trust. The study adds valuable insights to the discourse on greenwashing, offering practical implications for businesses navigating sustainability challenges.