Abstract : In the last two decades, corporate social responsibility has increased exponentially; however, the degradation of the environment has also increased exponentially. This has raised more questions about the true effectiveness of corporate sustainability. This study aims to examine if organizations that practice greenwashing can reduce the environmental benefits that companies achieve by participating in corporate social responsibility activities. This study will be conducted by using literature review methods to examine the gap between organizational environmental communication and actual organizational environmental performance by using existing research studies. The results have shown that companies are more likely to engage in greenwashing by promoting organizational environmental performance without making equal investments in organizational performance. This has shown that companies are more likely to engage in providing false sustainability reports rather than engaging in actual organizational sustainability. Greenwashing has significant impacts on organizations that include reduced innovation in the environment and reduced investor and consumer trust in organizational sustainability. Through synthesizing existing literature, the study indicates that there is an increased need to consider the relationship between corporate claims and tangible environmental performance in order to sustain CSR legitimacy. Additionally, it offers policy implications by focusing on the need to improve transparency and disclosure standards in order to improve the efficacy of CSR in attaining environmental protection objectives.

Keyword : CSR, Environmental Performance, Greenwashing, Legitimacy Theory, Stakeholder Trust, Sustainability.