The effect of explanations on perceived credibility of sustainability claims : how brands can position themselves as sustainable without being suspected of greenwashing.

As businesses are increasingly focusing on positioning themselves along sustainability dimensions, the occurrence of perceived greenwashing is threatening the perceived credibility of brands with genuine intentions. Hence, many brands accentuate their sustainability focus by explaining their intentions; either by emphasizing their resources or by focusing on ethical aspects. This thesis investigates the effect different explanations have on the perceived credibility of sustainability claims, and the moderating effect of regulatory focus. We hypothesized that resource-based explanations would increase perceptions of credibility for brands with a prior history of unsustainable operations, that promotion-focused consumers would perceive the claims as more credible compared to prevention-focused consumers, that ethical explanations would enhance the perceived credibility for promotion-focused consumers, and that resource-based explanations would enhance the perceived credibility for prevention-focused consumers. Utilizing a factorial design, UK residents were presented with ads from fictional brands within the energy industry, where brand histories and explanations were manipulated. No support for our hypotheses was observed, however due to limited research on the topic, further analysis was conducted. Our study revealed that companies with a history of unsustainable practices can increase the perceived credibility of sustainability claims by not providing any explanations to their efforts. Further, expertise is a central component of perceived credibility, and companies with prior histories of unsustainable practices can be seen as having more expertise when shifting to sustainable practices, compared to new sustainable companies within the same industry. Additionally, newer sustainable companies may benefit from using explanations which combine a resource- and ethical-aspect if the consumers are prevention-focused, consequently increasing the perceived level of expertise. These findings may help brands articulate their explanations more sufficiently to increase the perception of credibility in their claims, given their history and consumers regulatory focus.nhhma