The Impact of Greenwashing Scandals on Brand Loyalty: Will Customers Return?

Green marketing has now formed part and parcel of the business strategies across the globe, but consumer loyalty and trust in businesses have been lost due to the emergence of scandals of greenwashing where companies overstate or lie about their environmental aspects. This paper will set out to investigate how greenwashing scandals affect brand loyalty and find out whether consumers will be ready to revert to brands in the wake of scandals. The study is based on the Attribution Theory, the Commitment-Trust theory and the Brand Forgiveness theory, which is quantitative and employs the Partial Least Squares Structural Equation Modeling (PLS-SEM) methodology using the SmartPLS 4. A sample of 268 Vietnamese customers who had heard of at least one brand that had engaged in a greenwashing scandal was used to gather data on the consumers. The research examines the correlations between Greenwashing Scandal Perception (GSP), Satisfaction (SAT), Trust (TRU), Brand Forgiveness (BF), Perceived Corporate Social Responsibility (CSR) and Customer Anger (ANG) in explaining Brand Loyalty (LOY) and Commitment (COM). The findings indicate that satisfaction is positively affecting loyalty the most, followed by trust, forgiveness and CSR whereas anger has no significant influence on commitment. The conclusions point at the fact that consumers can forgive and be loyal when the brands behave with authenticity, transparency, and accountability. This research study is relevant to the literature of consumer recovery behavior following corporate ethical maltreatment and offers managerial recommendations on how brands can restore consumer trust and loyalty using emotional and relational repair tactics.