Abstract

Corporate greenwashing severely erodes market trust and impedes genuine sustainable development progress, creating an urgent need for effective governance mechanisms. This paper explores how environmental regulators, corporations, and civil society dynamically interact in greenwashing governance through a three-party evolutionary game model. Through solving replicator dynamics equations, analyzing evolutionarily stable strategies, and conducting numerical simulations, we reveal the evolutionary mechanisms governing greenwashing as a complex adaptive system. Our analysis yields three primary findings. First, the greenwashing governance system exhibits three distinct stable equilibria: an enforcement trap where intensive stakeholder engagement fails to prevent persistent corporate greenwashing; regulatory dominance sustained through governmental oversight alone while social monitoring remains absent; and collaborative governance featuring coordinated multi-stakeholder participation. Second, system evolution follows deterministic patterns driven by threshold relationships among key economic parameters—principally the enterprise’s excess profit from greenwashing, the strength of regulatory penalties and the regulator’s own supervision costs. Third, achieving optimal collaborative governance requires not only deterrent effects that outweigh greenwashing’s economic incentives, but more critically, effective governmental incentive mechanisms that transform citizens from passive observers into active governance partners, ultimately fostering genuine green practices across industries.

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