A Novel VAE-DML Fusion Framework for Causal Analysis of Greenwashing in the Mining Industry

TL;DR

This paper introduces a novel VAE-DML fusion framework to causally analyze how equity balance influences greenwashing behavior in the mining industry, revealing significant effects and underlying mechanisms.

Contribution

It develops an innovative VAE-DML approach to identify causal effects of governance on greenwashing, addressing endogeneity and uncovering heterogeneity and mechanisms.

Findings

Significant negative causal effect of equity balance on greenwashing.

Stronger effect in western regions and high-sensitivity industries.

Effect diminishes over time but remains significant long-term.

Abstract

Against the backdrop of the global green transition and "dual carbon" goals, mining industry chain enterprises are pivotal entities in terms of resource consumption and environmental impact. Their environmental performance directly affects regional ecological security and is closely tied to national resource strategies and green transformation outcomes. Ensuring the authenticity and reliability of their environmental disclosure is thus a core and urgent issue for sustainable development and national strategic objectives.From a corporate governance perspective, this study examines equity balance as a fundamental governance mechanism, investigating its inhibitory effect on greenwashing behavior among these enterprises and the underlying pathways involved. Methodologically, the paper innovatively employs a Variational Autoencoder (VAE) and a Double Machine Learning (DML) model to construct counterfactual scenarios, mitigating endogeneity concerns and precisely identifying the causal relationship between equity balance and greenwashing. The findings indicate, first, a significant negative causal relationship between equity balance and corporate greenwashing, confirming its substantive governance effect. Second, this inhibitory effect exhibits notable heterogeneity, manifesting more strongly in western regions, upstream segments of the industrial chain, and industries with high environmental sensitivity. Third, the governance effect demonstrates clear temporal dynamics, with the strongest impact occurring in the current period, followed by a diminishing yet statistically significant lagged effect, and ultimately a stable long-term cumulative influence. Finally, mechanism analysis reveals that equity balance operates through three distinct channels to curb greenwashing: alleviating management performance pressure, enhancing the stability of the executive team, and intensifying media scrutiny.