The Impact of Generative AI on the Perpetuation and Detection of Greenwashing in Sustainability Reports: Insights From an Experiment

ABSTRACT Our study, based around an experiment, examines the consequences when generative AI tools are used to create and assess sustainability disclosures. There are two key findings: (1) that generative AI greenwashes sustainability disclosures, with our study participants doing little to mitigate this, and (2) that our study participants viewed AI‐generated sustainability disclosures as more positive and credible than real disclosures. Our findings suggest that generative AI can mimic corporate spin, potentially weakening the quality of climate‐related communication. We highlight the dangers of overreliance on AI tools for sustainability reporting, provide a replicable experiment and outline a framework showing where human oversight and strategic controls are most needed. We offer practical insights for business leaders, sustainability teams and regulators as generative AI becomes an everyday part of corporate reporting workflows.