How climate risk shapes corporate greenwashing: the role of supply chain disruption and digital governance

This study examines whether climate risk is associated with higher corporate greenwashing using panel data on Chinese A-share listed firms from 2010 to 2024. We define corporate greenwashing as the gap between environmental disclosure and substantive green action, and measure climate risk using a city-level composite index of physical climate exposure matched to firms’ registered locations. The results show that climate risk is positively associated with corporate greenwashing. This finding remains robust when the core explanatory variable is replaced, when climate risk is lagged, when the sample period is shortened, and when an instrumental-variable approach based on historical climate anomalies is employed. Moderating analyses show that supply chain disruption strengthens this positive association, whereas digital governance weakens it. Additional tests indicate that climate risk increases environmental disclosure but reduces substantive green action, thereby widening the disclosure-action gap that defines greenwashing. The effect is also stronger in high-pollution industries and among firms with high supply chain concentration. Overall, the evidence suggests that climate risk is associated not only with firms’ operating environment but also with the credibility of their environmental communication.