Selective carbon disclosures (SCD)—a deceptive practice in which firms selectively report their carbon performance to appear more environmentally responsible—is an emerging yet underexplored phenomenon in the era of heightened environmental consciousness and corporate accountability. This practice can be a form of carbonwashing where firms strategically emphasize favourable carbon-related information while selectively omitting, delaying, or downplaying adverse emissions performance to shape stakeholder perceptions. This study examines the implications of SCD on corporate investment efficiency. Drawing on stakeholder-agency theory, we argue that selective carbon disclosure distorts the firm’s information environment and enables managerial opportunism, leading to inefficient investment decisions. Employing a sample of 5268 firms from 35 countries spanning 2004-2023, we document a statistically significant and positive association between SCD and investment inefficiency, primarily through overinvestment. Economically, a one-point increase in the SCD score is associated with an increase in investment inefficiency of approximately 7% relative to the sample mean. The findings are robust across alternative measures, several sensitivity tests, and methodological approaches, including entropy-balanced samples, 2SLS test, and a Difference-in-Differences (DiD) design. Furthermore, we document several cross-sectional and mechanism tests that support the positive association between SCD and investment efficiency. This study pioneers research on SCD's impact on investment outcomes, advances stakeholder-agency theory in deceptive carbon disclosures, and offers actionable insights for combating SCD and fostering a sustainable world.