The impact – both positive and negative – of TNCs/MNCs on the global and local economies, on the peoples, and on the environment have increased in recent decades. Yet, TNCs/MNCs operate in some sort of political and legal vacuum, as they have grown beyond the control of any single nation-state. In matters of environmental protection, as on other issues, TNCs/MNCs therefore simultaneously try to shape this vacuum by defining private environmental standards and to take advantage of this very vacuum to the environment’s detriment.
Greenwashing, is the practice of making an unsubstantiated or misleading claim about the environmental benefits of a product, service, technology or company practice. Greenwashing can make a company appear to be more environmentally friendly than it really is. Ramus et al suggests that, corporations have an incentive to publish environmental policy statements as these statements can positively influence public perceptions of company commitment to environmental protection and sustainable development, possibly even resulting in increased market share and improved stakeholder relations. And, there is little downside to making a public commitment (independent of intent to implement the policy) because there is no mechanism for verification. In 2006
