Deceptive Communication in Sustainability Reports : A study of the opportunities to deceive in sustainability reports and the consequences on stakeholders’ perceptions
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- Master Thesis 
Paltering and obfuscation are two particularly enticing forms of deception as they do not contain untruthful statements when misleading the reader. This thesis studies deceptive communication in corporate sustainability disclosures and its consequences on stakeholders’ perceptions of the reporting firm. Through a comprehensive literature review, we found that obfuscation and paltering are becoming increasingly more relevant forms of deceptive communication in corporate sustainability disclosures. Simultaneously, the opportunities for the better-known lies of commission and -omission are shrinking with the emergence of regulations and more sophisticated reporting frameworks. We subsequently conducted an experimental survey in Prolific, which explored stakeholder perception of deceptive communication. The survey randomly assigned the 392 survey participants to either an honesty, obfuscation or paltering condition. The experimental research design allowed us to analyse the difference between these conditions. Our main findings show that when paltering is used to deceive the stakeholder, paltering bears the most significant reputational consequence. However, paltering is an effective form of deception. In the absence of bad news, the palterer leaves the reader with a significantly better perception than both honesty and obfuscation. In addition, there are no significant differences between the three conditions in the presence of bad news. Further, there was not found any significant difference in treatment effect between honesty and obfuscating by complex language in sustainability disclosures.