Decoupling Symbolic ESG Compliance from Operational Integration: A Multi-Site Empirical Analysis of Greenwashing Mechanisms in Mid-Cap Manufacturing Firms

Abstract

This study investigates the structural divergence between symbolic ESG disclosure practices and substantive operational integration within mid-cap manufacturing enterprises across three emerging economies. Drawing on institutional theory and neo-institutional isomorphism, the research employs a mixed-methods design combining quantitative panel data analysis (n = 214 firm-years, 2019–2023) with semi-structured executive interviews across 18 organizations. Findings reveal that coercive regulatory pressures predominantly drive surface-level compliance, while normative and mimetic pressures correlate positively with deeper operational embedding of sustainability metrics. Mediation analysis indicates that internal governance maturity significantly moderates the decoupling effect. The study contributes a scalable diagnostic framework enabling auditors and institutional investors to differentiate authentic ESG integration from performative signaling, with material implications for stakeholder accountability and capital allocation efficiency.