The paper presents an economic model of greenwash, where a firm strategically discloses environmental information and an NGO may audit and penalize the firm for failing to fully disclose its environmental impacts. The authors show that disclosures increase when the likelihood of good environmental performance is lower, and firms with intermediate levels of environmental performance are more likely to engage in greenwash. Under certain conditions, NGO punishment of greenwash induces firms to become less forthcoming about their environmental performance. The study also suggests that complementarities between NGO auditing and corporate adoption of environmental management systems (EMS) justify public policies encouraging firms to adopt EMSs. The paper provides a detailed analysis of the equilibria in the disclosure game, characterizing how different types of equilibria emerge based on the parameters of the model, such as the probability of success in environmental activities and the probability of the firm being informed about the outcomes of its activities.The paper presents an economic model of greenwash, where a firm strategically discloses environmental information and an NGO may audit and penalize the firm for failing to fully disclose its environmental impacts. The authors show that disclosures increase when the likelihood of good environmental performance is lower, and firms with intermediate levels of environmental performance are more likely to engage in greenwash. Under certain conditions, NGO punishment of greenwash induces firms to become less forthcoming about their environmental performance. The study also suggests that complementarities between NGO auditing and corporate adoption of environmental management systems (EMS) justify public policies encouraging firms to adopt EMSs. The paper provides a detailed analysis of the equilibria in the disclosure game, characterizing how different types of equilibria emerge based on the parameters of the model, such as the probability of success in environmental activities and the probability of the firm being informed about the outcomes of its activities.