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Greenwash, moral decoupling, and brand loyalty.

Green marketing has grown rapidly in the past decade, and brands now often make claims about their environmental performance to promote their brand image and to seize green marketing opportunities (Lin et al., 2017). Unfortunately, as many brands overstate their environmental performance without fulfilling their responsibilities (Gatti et al., 2019; Lyon & Montgomery, 2015), the phenomenon of greenwash has become an important source leading to a marketing crisis. Previous researchers have demonstrated that greenwash results in consumer skepticism toward all green claims (Nguyen et al., 2019), thereby undermining the green marketing movement as a whole (Y.-S. Chen et al., 2020). Most of these researchers claim that consumers lack the ability to determine the trustworthiness of green initiatives, and that confusion and worry about whether products are really green means consumers tend to avoid all green brands (Y.-S. Chen & Chang, 2013; Gatti et al., 2019). However, as greenwash is prevalent and scandals have spread widely through social media, the public is now more acquainted with and sensitive to this phenomenon (de Freitas Netto et al., 2020; Rahman et al., 2015).

How then do consumers respond to greenwashed brands? To address this issue, we investigated if greenwash undermines consumers' brand loyalty. The focus of marketing activities is to develop, maintain, and enhance brand loyalty (Chaudhuri & Holbrook, 2001; Nyadzayo & Khajehzadeh, 2016), through which a greater market share, higher prices, and better financial performance of businesses can be generated (Fernandes & Moreira, 2019; Oliver, 1999). Although greenwash attracts consumers temporarily, it may drive them away once it is exposed (Y.-S. Chen et al., 2020; Nguyen et al., 2019). In addition to being a function of external factors, brand loyalty is influenced by consumers' cognitive processes. Some consumers consider a brand's product inferior if the brand has acted unethically, whereas others insist that the product quality is satisfactory. Consumers' disassociation of judgments of morality from judgments of performance is referred to as moral decoupling (Bhattacharjee et al., 2013). Although moral decoupling has usually been viewed as an antecedent of consumer behavior by previous researchers (J. Chen et al., 2018; Orth et al., 2019), it may also shape consumers' perception of and response to the same unethical behavior. Therefore, we used moral decoupling as a moderator to more precisely explore the effect of greenwash on consumers' brand loyalty.

Literature Review and Hypothesis Development

Brand loyalty is defined as "a deeply held commitment to rebuy or repatronize a preferred product/service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing" (Oliver, 1999, p. 34); thus, it emphasizes long-term purchase behavior and promised purchase intention (Chaudhuri & Holbrook, 2001). The cost of attracting a new consumer has been estimated at six times higher than that of retaining a current one (Chinomona, 2016), and loyal consumers are typically less price sensitive, which enlarges profits. Therefore, many researchers have investigated the strengthening of brand loyalty through consumer satisfaction (Fernandes & Moreira, 2019), value for money (Chekalina et al., 2018), brand trust (Huang, 2017), and brand image (Chinomona, 2016), which have been found to be key determinants of brand loyalty.

Greenwash is defined as "tactics that mislead consumers regarding the environmental practices of a company or the environmental benefits of a product or service" (Parguel et al., 2011, p. 15). It not only refers to the deliberate overstatement of the brand's environmental performance, but also includes the selective disclosure of environmental issues and claims that lack credible proof (de Freitas Netto et al., 2020; Gatti et al., 2019). However, consumers may doubt that the environment is protected as promised and may sense risk in their product purchase (Y.-S. Chen & Chang, 2013; Nguyen et al., 2019). Consumers also choose green brands in pursuit of a combination of emotional and functional benefits, which compensate for the products' higher price (Lin et al., 2017). When consumers find out that the green benefits do not exist, they feel disappointed with the quality and value for money of the products (Chekalina et al., 2018; Fernandes & Moreira, 2019). In addition, when greenwash is exposed, consumers feel betrayed and lose faith in the brand (Y.-S. Chen et al., 2020; Huang, 2017). In addition, greenwash scandals can destroy the brand's image and embarrass the consumers who use its products (Chinomona, 2016; Nyadzayo & Khajehzadeh, 2016). The negative word-of-mouth triggered by greenwash scandals generate great pressure on consumers to abandon the brand, even if they love the products (Y.-S. Chen et al., 2014). Even after the brand has made progress in righting these wrongs, consumers still feel skeptical about its green claims (Y.-S. Chen & Chang, 2013; Wang et al., 2020). Thus, we proposed the following hypothesis:

Hypothesis 1: Greenwash will be negatively associated with brand loyalty.

There has been growing academic attention focused on unethical brand behavior and its consequences. Although most studies have supported that brands' unethical acts lead to consumers' negative perceptions and a reduction in sales (Schmalz & Orth, 2012), researchers have also observed that some consumers choose to keep purchasing from the misbehaving brands (Haberstroh et al., 2017). To rationalize this choice, consumers engage in strategies such as redefining unethical conduct, downplaying the potential harm, denying the brand's subjectivity in causing harm, or blaming the victim (Hoffmann, 2013; Lee & Kwak, 2016). However, support of a brand involved in unethical scandals contradicts the intrinsic need for individuals to maintain a positive self-image (Haberstroh et al., 2017). In contrast to moral rationalization, moral decoupling does not attempt to make the acts less immoral, but it separates them from the performance (Lee & Kwak, 2016). Moral decoupling is defined as "a psychological separation process by which consumers selectively dissociate judgments of morality from judgments of performance" (Bhattacharjee et al., 2013, p. 1168). Previous researchers have demonstrated that moral decoupling promotes consumers' perception of the benefits of (J. Chen et al., 2018), performance evaluation of (Fehr et al., 2019), and purchase intention toward (Orth et al., 2019) unethical brands.

Although greenwash is unethical and challenges public morality, moral decoupling may influence how consumers perceive and respond to it. On the one hand, consumers at higher (vs. lower) levels of moral decoupling are more capable of dissociating the brand's performance from greenwash and evaluating objectively the product quality and functionality (Fehr et al., 2019), which brings about less dissatisfaction (Lee & Kwak, 2016; Lin et al., 2017). They may even argue that because not all brands have enough resources to develop green products, the trend of green marketing forces them to greenwash, which allows them to invest limited resources in improving the product quality (de Freitas Netto et al., 2020; Lyon & Montgomery, 2015). On the other hand, even if they concede that greenwash is unethical, these consumers experience less cognitive dissonance in their use of products from a greenwashed brand (J. Chen et al., 2018; Orth et al., 2019). In contrast, consumers at lower levels of moral decoupling are apt to feel guilty because they consider their continued use as encouragement of the unethical conduct. Thus, we proposed the following hypothesis:

Hypothesis 2: Moral decoupling will negatively moderate the relationship between greenwash and brand loyalty, such that the negative relationship is stronger at lower levels of moral decoupling.

Method

Participants and Procedure

A survey was conducted in five shopping malls in Hangzhou, China, with participants who were selected randomly. We distributed 500 surveys and received 427 valid responses (response rate = 85.4%). Of the participants, 52.9% were women and 47.1% were men, and 27.6% were aged 25 years or younger, 26.7% were aged 26-35 years, 27.2% were aged 36-45 years, and 18.5% were aged 46 years or older. Regarding level of education, 20.1% of participants had a college degree or lower level of education, 42.9% had a bachelor's degree, 28.8% had a master's degree, and 8.2% had a doctoral degree. Further, 23.7% had an annual household income of less than USD 10,000, 34.7% between USD 10,001 and 20,000, 30.0% between USD 20,001 and 30,000, and 11.7% over USD 30,000.

We obtained ethical approval from our school's Research Ethics Committee. The participants were informed of the purpose of the study and advised that their personal information would be kept confidential, their responses would be anonymous, and that the data would be used only for research purposes. These details were written at the head of the questionnaire and explained right before the survey forms were handed out. The participants were given a pen with our university's logo as compensation for their participation.

Measures

We used established scales, with the items translated into Chinese. Two of the authors independently translated the items into Chinese and two bilingual translators were invited to convert the translations back into English. The four of these individuals and another author then compared the differences and discussed how to revise the Chinese version to ensure equivalency and accuracy. Participants assessed the items on a 7-point Likert scale (1 = strongly disagree, 7 = strongly agree), and were asked to name a familiar brand and fill out the survey accordingly.

Greenwash

Greenwash was measured with Y.-S. Chen and Chang's (2013) five-item scale. A sample item is "The products of this brand overstate or exaggerate how their green functionalities actually are." Cronbach's alpha was .88.

Moral Decoupling

Moral decoupling was measured with Bhattacharjee et al.'s (2013) three-item scale. A sample item is "Judgments of performance should remain separate from judgments of morality." Cronbach's alpha was .82.

Brand Loyalty

Brand loyalty was measured with Chaudhuri and Holbrook's (2001) four-item scale. A sample item is "I intend to keep purchasing this brand." Cronbach's alpha was .87.

Control Variables

We used gender, age, level of education, and annual household income as control variables, as suggested by previous researchers (Chaudhuri & Holbrook, 2001; Nyadzayo & Khajehzadeh, 2016).

Results

Descriptive Data Analysis

Means, standard deviations, correlations, and square roots of average variance extracted (AVE) are shown in Table 1. The relationship between greenwash and moral decoupling was nonsignificant, that between greenwash and brand loyalty was significantly negative, and that between moral decoupling and brand loyalty was nonsignificant.

Measurement Validation

A confirmatory factor analysis of the three-factor model showed good convergent validity, chi square ([chi square]) = 113.23, degrees of freedom (df) = 51, [chi square]/df = 2.22, p < .001; root mean square error of approximation = .054, comparative fit index = .97. The composite reliability of each variable was greater than .80, the AVE for each variable was larger than .50, and the square root of the AVE for each construct was higher than the corresponding interconstruct correlations. Thus, composite reliability and discriminant validity were confirmed. Finally, the Cronbach's alphas for each scale were greater than .80, indicating acceptable internal consistency reliability.

Hypothesis Testing

The hypotheses were tested with hierarchical regression modeling. We conducted a three-step analysis: First, we took brand loyalty as the dependent variable and added the control variables to build Model 1. Second, we added the independent variable of greenwash to build Model 2. Third, we added the moderator of moral decoupling and the interaction term of greenwash x moral decoupling to build Model 3. The variance inflation factors of the three models were within the acceptable range of 1-4, indicating that multicollinearity was not severe. The regression results are reported in Table 2.

As can be seen in Table 2, the results of Model 1 show that gender (0 = female, 1 = male) and level of education were negatively associated with brand loyalty, and age and annual household income were positively associated with brand loyalty. The results of Model 2 show that greenwash was negatively associated with brand loyalty ([beta] = -.150, p < .01). Thus, Hypothesis 1 was supported. The results of Model 3 show that the regression coefficient of the greenwash x moral decoupling interaction was significantly positive ([beta] = .221, p < .001). To illuminate the moderating effect, participants were separated into a low moral decoupling group (M - 1 SD) and a high moral decoupling group (M + 1 SD) for regression analysis. As shown in Figure 1, the greenwash effect was significantly negative at lower levels of moral decoupling (r = -.407, p < .001), and nonsignificant at higher levels of moral decoupling (r = .069, p > .05). Therefore, Hypothesis 2 was supported.

Discussion

We investigated the effect of greenwash on consumer's brand loyalty and how moral decoupling shapes this effect. Our two hypotheses were supported: The empirical results demonstrate that greenwash undermined brand loyalty, and the effect was stronger at the lower levels of moral decoupling.

Unlike most previous researchers, who examined the effect of greenwash on skepticism about green claims and damage to green marketing (Y.-S. Chen et al., 2020; Nguyen et al., 2019), we proposed that consumers are aware when a specific brand has been greenwashed, and they act accordingly. In addition, we took into consideration individual differences in the greenwash effect and demonstrated the moderating effect of moral decoupling, differing from the direct effects shown by previous researchers (J. Chen et al., 2018; Orth et al., 2019). Our findings not only manifest a more in-depth effect of greenwash, but also extend moral decoupling research.

Our results also have practical implications. First, we propose that brands eliminate the detrimental greenwash practice to avoid undermining consumers' brand loyalty. Second, brands that are genuine about their environmental responsibilities could pay more attention to their brand communication and the transparency of their environmental performance. Certification from a credible third party would greatly help with this. Third, as consumers with higher levels of moral decoupling are more tolerant of greenwash, the government and environmental organizations could educate consumers about the dangers of greenwash to avoid moral decoupling.

There are also several limitations in this study. First, as data were collected from the same participants at the same time, this restricts our ability to interpret causality among the study variables. A longitudinal design could be used in future studies to address this limitation. Second, moral decoupling was measured with participants' self-assessment, so it may have been falsely reported because of social desirability. The anonymity of the survey may have alleviated this problem, but judgments from a familiar third party or the use of an experimental design would be preferable in future research. Third, the survey was conducted only in China, where the culture and economics are different from those of most other countries. Future researchers could conduct studies in other cultures to strengthen the generalizability of our findings.

Acknowledgments

This work was supported by the Research Projects of Zhejiang Federation of Humanities and Social Sciences Circles (2021N43), and the Science Foundation of Zhejiang Sci-Tech University (18192265-Y).

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Zengrui Xiao (1), Ying Wang (2), Xiaofen Ji (1), Liling Cai (1)

(1) School of International Education, Zhejiang Sci-Tech University, People's Republic of China

(2) Office of Consulting Committee of Zhejiang Provincial People's Government, People's Republic of China

CORRESPONDENCE Xiaofen Ji, Room 308, Building 19th, School of International Education, Zhejiang Sci-Tech University, Hangzhou 310018, People's Republic of China. Email: xiaofenji@zstu.edu.cn

https://doi.org/10.2224/sbp.10038
Table 1. Means, Standard Deviations, Correlations, and Square Roots of 
Average Variance Extracted for Study Variables

Variables             M    SD      1          2          3

1. Gender            0.47  0.50
2. Age               2.37  1.08  -.055
3. Education         2.25  0.87   .084      -.033
4. Annual household  2.30  0.96   .055       .051       -.053
   income
5. Green wash        3.63  1.48   .107 (*)  -.078        .129 (**)
6. Moral decoupling  3.31  1.61   .022      -.151 (**)   .122 (**)
7. Brand loyalty     4.10  1.60  -.115 (*)   .145 (**)  -.187 (**)

Variables              4          5          6       7

1. Gender
2. Age
3. Education
4. Annual household
   income
5. Green wash        -.031       (.769)
6. Moral decoupling   .041        .001       (.783)
7. Brand loyalty      .228 (**)  -.196 (**)  -.010   (.802)

Note. Square roots of average variance extracted are presented in 
parentheses on the diagonal.
p < .05.  (**) p < .01.

Table 2. Results of Hierarchical Regression Analysis

Variables                          Model 1

Control variables
  Gender                          -.121 (**)
  Age                              .135 (**)
  Education                       -.161 (**)
  Annual household                 .219 (**)
  income
Independent variable
  Greenwash
Moderator
  Moral decoupling
Interaction
  Greenwash x Moral decoupling
[F.sub.(dfl.df2)]               [13.522.sub.(4.222)] (***)
[R.sup.2]                          .114

Variables                            Model 2

Control variables
  Gender                          -.105 (*)
  Age                              .123 (**)
  Education                       -.144 (**)
  Annual household                 .216 (***)
  income
Independent variable
  Greenwash                       -.150 (**)
Moderator
  Moral decoupling
Interaction
  Greenwash x Moral decoupling
[F.sub.(dfl.df2)]               [13.191.sub.(5,421)] (***)
[R.sup.2]                          .135

Variables                          Model 3                  Effect size

Control variables
  Gender                          -.085                     .008
  Age                              .112 (*)                 .015
  Education                       -.144 (**)                .024
  Annual household                 .205 (***)               .048
  income
Independent variable
  Greenwash                       -.156 (**)                .028
Moderator
  Moral decoupling                 .019                     .000
Interaction
  Greenwash x Moral decoupling     .221 (***)               .060
[F.sub.(dfl.df2)]               [13.775.sub.(7, 419)] (***)
[R.sup.2]                          .187

Note. Standardized beta values are reported. Effect size is the squared 
semipartial correlation.
(*) p < .05.  (**) p < .01.  (***) p < .001.
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Author:Xiao, Zengrui; Wang, Ying; Ji, Xiaofen; Cai, Liling
Publication:Social Behavior and Personality: An International Journal
Geographic Code:9CHIN
Date:Apr 1, 2021
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