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Title: Operational risk management and the credibility of ESG disclosures: a critical analysis

Authors: Stelios Potamitis; Kyriakos Christofi; Alexios Kythreotis

Addresses: PEAK Innovation Center, European University Cyprus, 6, Diogenous Str, 2404 Engomi, Nicosia, P.O. Box 22006, 1516 Nicosia, Cyprus ' PEAK Innovation Center, European University Cyprus, 6, Diogenous Str, 2404 Engomi, Nicosia, P.O. Box 22006, 1516 Nicosia, Cyprus ' PEAK Innovation Center, European University Cyprus, 6, Diogenous Str, 2404 Engomi, Nicosia, P.O. Box 22006, 1516 Nicosia, Cyprus

Abstract: Concerns about the credibility of environmental, social, and governance (ESG) disclosures and greenwashing have increased the need for reliable sustainability reporting. This study examines whether operational risk management (ORM) can improve ESG disclosure credibility and reduce greenwashing risk. Using a mixed-methods approach, the study develops two new measures: the operational risk management strength score (ORMSS) and the greenwashing index (GWI). The study covers 50 European firms from the energy, manufacturing, and financial services sectors, combining quantitative methods with a qualitative examination of ESG disclosures. The findings show a strong negative relationship between ORM maturity and greenwashing risk, which remains consistent across different analyses and robustness checks. ORM is also the strongest predictor of ESG disclosure credibility, while sector and external assurance have a weaker influence. Overall, the findings highlight the important role of strong ORM practices in supporting credible ESG disclosures.

Keywords: ESG disclosure; greenwashing; operational risk management; ORM; sustainability reporting; assurance.

DOI: 10.1504/GBER.2026.156807

Global Business and Economics Review, 2026 Vol.35 No.5, pp.1 - 27

Received: 21 Jan 2026
Accepted: 02 Aug 2026
Published online: 05 Oct 2026 *