The paper presents an economic model of greenwashing, where firms strategically disclose environmental information and NGOs may audit and penalize firms for incomplete disclosure. It shows that disclosures increase when the likelihood of good environmental performance is lower. Firms with intermediate environmental performance are more likely to engage in greenwashing. NGO audits can incentivize full disclosure for some firms but deter others. The model also highlights the role of environmental management systems (EMS) in complementing NGO audits. The analysis reveals that when NGO penalties for greenwashing are low, greenwashing becomes a common strategy. The paper concludes that greenwashing is a selective disclosure of positive environmental information without full disclosure of negative information. The model shows that the optimal firm response to NGO campaigns against greenwashing depends on the firm's probability of success in environmental activities and the probability of being informed about outcomes. The paper provides a framework for understanding how greenwashing and environmental disclosure interact with NGO audits and environmental management systems.The paper presents an economic model of greenwashing, where firms strategically disclose environmental information and NGOs may audit and penalize firms for incomplete disclosure. It shows that disclosures increase when the likelihood of good environmental performance is lower. Firms with intermediate environmental performance are more likely to engage in greenwashing. NGO audits can incentivize full disclosure for some firms but deter others. The model also highlights the role of environmental management systems (EMS) in complementing NGO audits. The analysis reveals that when NGO penalties for greenwashing are low, greenwashing becomes a common strategy. The paper concludes that greenwashing is a selective disclosure of positive environmental information without full disclosure of negative information. The model shows that the optimal firm response to NGO campaigns against greenwashing depends on the firm's probability of success in environmental activities and the probability of being informed about outcomes. The paper provides a framework for understanding how greenwashing and environmental disclosure interact with NGO audits and environmental management systems.