To combat climate change, companies increasingly track and report their carbon emissions to show that they are reducing their carbon footprints – but these reports don’t always correspond to real reductions in emissions generated. This study aims to explain discrepancies between the amount of carbon firms report versus the amount emitted through their electricity use. Building on past research that differentiated effective from symbolic decarbonization strategies, we leverage a panel of carbon disclosure data to show that many firms deflate their emissions in response to policy pressures to improve environmental performance. Pressures to decarbonize may come from public policies, such as national regulations, but also from company policies, such as climate targets or carbon pricing. Our findings suggest that companies who set strong internal climate policies may mean well, but often fall short of their intended impacts, all while appearing to achieve them on paper. Such incidental greenwash could contribute to the climate crisis without careful management. Implications for theory, policy, and management are discussed.
