Greenwashing as a Business Architecture: Constructing a Diagnostic Matrix to Measure Strategic Talk-Action Decoupling in Transitioning Carbon-Intensive Industries

• Adaan Ahsun

  Covenant University

  Author

Corporate environmental misrepresentation—greenwashing—has emerged as a critical impediment to genuine decarbonisation, particularly within carbon-intensive industries undergoing transition. Despite growing regulatory scrutiny and stakeholder demands for transparency, existing detection methodologies remain fragmented, often failing to distinguish between aspirational communication and substantive operational decoupling. This study addresses this gap by conceptualising greenwashing as a broken business architecture and developing a diagnostic matrix to systematically measure strategic talk-action decoupling. Employing a mixed-methods design incorporating retrospective financial and sustainability data from 187 publicly listed firms across the energy, utilities, materials, and industrials sectors over the 2020–2025 period, the research operationalises decoupling through a validated metric—the Talk-Action Decoupling Index (TADI)—which integrates environmental disclosure quality scores with operational performance indicators. The diagnostic matrix achieved 89.4% accuracy in predicting greenwashing risk classification, significantly outperforming conventional ESG rating dispersion measures. Key predictors of decoupling included the absence of science-aligned carbon targets, capital expenditure allocation inconsistency, and low renewable energy adoption. The study contributes a replicable, sector-validated diagnostic framework for regulators, investors, and corporate boards to systematically identify and mitigate greenwashing, offering practical pathways for enhancing sustainability governance accountability during the critical net-zero transition period.

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