Work

Greenwashing, greenhushing, and the path to green banking

Year: 2025

Type: article

Abstract: This study investigates how governance characteristics, specifically gender diversity , and bank business models influence the transition from greenwashing and greenhushing to becoming green banks. A balanced panel of 150 listed banks worldwide from 2015 to 2021 is used. Latent Markov models are applied as a methodology capable of explaining the evolution of a group of banks and the characteristics that may affect their transition over time. Key findings reveal a positive correlation between having a female CEO with at least 30 % female board representation and the likelihood of a bank shifting from greenwashing to a green stance. Conversely, a higher proportion of women on the board appears to reduce the likelihood of transitioning from greenhushing to a vocal green position, suggesting a more risk-averse and conservative approach. Additionally, investment-oriented banks are more likely to evolve toward vocal green banking than retail and universal banks. The research advances the literature on greenwashing and greenhushing by highlighting the importance of governance characteristics in supporting environmentally responsible practices.

Source: Global Finance Journal

DOI: 10.1016/j.gfj.2025.101147

Authors: Gennaro De Novellis, Alessia Pedrazzoli, Daniela Pennetta, Valeria Venturelli

Institutions: University of Milano-Bicocca, University of Modena and Reggio Emilia

Language: English

Topic: Sustainable Finance and Green Bonds

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Gender equality, Climate action, Responsible consumption and production, Reduced inequalities

Open Access status: hybrid

Estimated APC paid: $2,860