Understanding Greenwashing Practices in Sustainability Reporting: A Systematic Literature Review

Abstract

Purpose: This study systematically maps the literature on greenwashing in sustainability reporting by identifying its theoretical foundations, antecedents, mechanisms, consequences, and research gaps.Method: A systematic literature review was conducted on 136 Scopus-indexed articles published between 2016 and 2025. Content analysis was used to identify dominant theories, research themes, antecedent factors, mechanisms, and consequences of greenwashing in sustainability reporting.Result: Legitimacy theory, stakeholder theory, and agency theory emerge as the dominant theoretical foundations. Corporate governance, sustainability reporting practices, and firm characteristics are identified as key antecedents of greenwashing, with both direct and indirect effects operating through risk-related mechanisms, including financial and sustainability risks. These relationships are further shaped by external pressures, such as stakeholder pressure, regulatory pressure, and market competition, which may strengthen or weaken firms’ propensity to engage in greenwashing.Practical Implications for Economic Growth and Development: The findings offer insights for companies to improve the credibility of sustainability reporting, investors to make informed decisions, and regulators to strengthen disclosure oversight. These efforts may reduce information asymmetry, improve market transparency, and support efficient capital allocation and sustainable economic growth.Originality/Value: This study provides an integrated mapping of greenwashing in sustainability reporting, covering theoretical foundations, antecedents, risk-related mechanisms, external pressures, consequences, and future research directions.