Examining green washing’s impact on circular consumption : role of environmental concerns, sustainable information, and green product knowledge

Abstract

This study examines the relationship between greenwashing and circular consumption within the context of Pakistan, an emerging economy where environmental awareness remains relatively limited. Greenwashing, defined as the practice of conveying misleading or exaggerated environmental claims, is generally perceived as a barrier to sustainable behavior. However, this research identifies a counterintuitive outcome: the perception of greenwashing may positively influence consumers’ engagement in circular consumption practices, such as reducing, reusing, and recycling. Grounded in the Theory of Planned Behavior (TPB) and Norm Activation Theory (NAT), the study investigates the roles of environmental concern, sustainable information collection, and green product knowledge in shaping this relationship. Data were collected through a structured online survey involving 421 respondents, and the analysis was conducted using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results indicate that perceived greenwashing has a significant positive effect on circular consumption, mediated by both environmental concern and the collection of sustainable information. In contrast, green product knowledge did not significantly moderate the relationship. These findings suggest that consumer skepticism toward greenwashing can prompt critical reflection and environmentally responsible actions. The study contributes to the growing literature on sustainable consumer behavior, particularly in developing countries, and emphasizes the need for transparency in environmental communication. By promoting informed, transparent, and environmentally conscious consumption, the findings offer insights relevant to sustainable finance practices, including ESG-focused investment decisions and regulatory efforts aimed at combating greenwashing. Furthermore, it highlights the importance of enhancing consumer awareness and access to credible sustainability information as a means to promote circular consumption and mitigate the negative implications of deceptive marketing practices.