Greenwashing leads to consumer skepticism of all green products as well as doubts about company claims regarding sustainability. However, the understanding of how to regain green consumer trust after greenwashing is rather limited. The authors fill this gap by exploring the psychological process of green consumers following intervention strategies designed to reduce greenwashing. We collect and interpret quantitative data from two psychological experiments, the first experiment identified two types of intervention strategies that serve to counter the negative impact of greenwashing and based on our findings from the first studies, we proposed and tested the moderating effect of two factors—implicit beliefs of consumers and companies who implement intervention strategies after greenwashing. The results indicate that distrust regulation (quantifying a product’s green attributes) and trustworthiness demonstration (visualizing environmental behaviors) are effective intervention strategies that can enable consumers to re-evaluate the cost-benefit of green products, and which may serve as critical psychological factors for green consumers and contribute to the degree of trust. Validation and comparative study of the derived results show that distrust regulation, followed by trustworthiness demonstration, has the best effect on increasing green trust after intervention. If the sequence is reversed, the effect of the intervention strategy is worse than if only one strategy had been applied. The implicit beliefs of green consumers play a moderating role between intervention strategies and reconsideration of the cost-benefit of green products. The behavior of genuinely green companies and the incremental beliefs of consumers can promote the intervention effect after greenwashing. Alternatively, the behavior of greenwashing companies can easily counter these effects. These findings contribute to knowledge about which psychological factors can promote or hinder the effectiveness of an intervention.

Purpose: This paper explores the effect of natural disasters on the profitability and solvency of US banks.Design/methodology/approach: Employing a sample of 187 large-scale natural disasters that occurred in the United States between 2000 and 2014 and a sample of 2,891 banks, we examine whether and how disaster-related damages affect various measures of bank profitability and bank solvency. We differentiate between different types of banks (with local, regional and national operations) based on a breakdown of their state-level deposits and explore the reaction of these banks to damages weighted by the GDP of the states they operate in.Findings: We find that natural disasters have a pronounced effect on the net-income-to-assets and the net-income-to-equity ratio of banks, as well as the banks' impaired loans and return on average assets. We also observe significant effects on the equity ratio and the tier-1 capital ratio (two solvency measures). Interestingly, the latter are positive for regional banks which appear to benefit from increased customer deposits related to safekeeping, government payments for post-disaster recovery, insurance payouts and decreased withdrawals, while they are significantly negative for banks that operate locally or nationally.Originality/value: We contribute to the literature by offering various new insights regarding the effects natural disasters have on financial institutions. With climate change-driven natural disasters widely expected to increase both in terms of frequency and severity, their economic fallout is likely to impose an increasing burden on financial institutions. Large, nationally operating banks tend to be well diversified both geographically and in terms of their product offerings. Small, locally operating banks, however, are increasingly at risk – particularly if they operate in disaster-prone areas. Current banking regulations generally do not factor natural disaster risks into their capital requirements. To avoid the next big financial crisis, regulators may want to adjust their reserve requirements by taking this growing risk exposure into consideration.

We find that compliance with the Basel Core Principles (BCPs) has a strong positive effect on the stability of conventional banks, and a positive but less pronounced effect on the stability of Islamic banks. We also find that the main impact of compliance is an increase in capital ratios, whereas other components of the Z-score are negatively affected. This reflects the desire of banks to be more closely integrated into the global financial system by holding higher capital ratios. The findings also justify the 2015 decision of the Islamic Financial Services Board to publish similar principles for Islamic banks.