Suppliers’ Corporate Social Responsibility Efforts with Greenwashing Concerns: Can Blockchain Help?*

Abstract

Corporate social responsibility (CSR) has been received extensive attentions. However, substantial CSR investment triggers some suppliers’ greenwashing behaviors which refer to hiding irresponsible operations and exaggerating CSR efforts, and raise concerns from consumers with CSR awareness. In this paper, we explore the impact of blockchain implementation on CSR efforts along a supply chain consisting of one supplier and one retailer under the supplier Stackelberg and retailer Stackelberg models. We consider a group of consumers with CSR awareness who have concerns about the supplier's greenwashing behavior. The adoption of blockchain helps the supply chain members foster consumers’ trust about CSR involvement, by linking CSR related information nodes to blockchain. We identify the conditions where blockchain implementation makes the supplier be more responsible. The supplier has stronger incentives to adopt blockchain when undertaking sufficiently high penalty after violation detection. Under the situation, the supplier makes more CSR efforts which is efficient in the presence of blockchain to eliminate consumers’ concerns about greenwashing. For the retailer, blockchain implementation is beneficial when the detection is efficient enough without blockchain and the penalty cost is not significantly high.