As sustainability increasingly dominates business strategy and communication, two opposing yet equally concerning practices have arisen: greenwashing and brownwashing. Greenwashing entails the embellishment of environmental accomplishments to deceive stakeholders, whereas brownwashing signifies an unwarranted humility or the minimization of authentic sustainability initiatives, frequently to evade increased scrutiny or allegations of hypocrisy. This chapter examines the intricate interactions between these two types of disclosure distortion, assessing their impact on business reputation, investor perceptions, and stakeholder trust. This chapter analyzes the motives for exaggeration and understatement in environmental reporting utilizing theoretical frameworks from corporate social responsibility (CSR), behavioral economics, and communication studies. Through case analyses and empirical findings, it underscores how mismatched disclosures—whether too optimistic or tactically cautious—impede advancement toward genuine sustainability. The chapter elaborates on the function of regulatory entities, assurance frameworks, and changing stakeholder anticipations in tackling both greenwashing and brownwashing, promoting a more equitable, transparent, and responsible methodology for corporate sustainability reporting.