Finance Faculty Publications and Presentations
Are Environmentally Sensitive Firms More Likely to Release Corporate Environmental Disclosures? Evidence From Environmental Risk Management
Document Type
Article
Publication Date
1-26-2025
Abstract
This study examines the environmental risk management practices of US firms operating in environmentally sensitive industries. Using two proxy variables for ex ante environmental policy risk—firm-level toxic chemical emissions and climate-related keywords in annual financial statements—we demonstrate that firms facing high ex ante environmental policy risk tend to increase the frequency and length of their voluntary sustainability reports. Additionally, we find that proactive sustainability disclosures significantly mitigate firm-level systematic risk (beta) and associated litigation risk. This risk reduction is more pronounced among firms with substantial green innovations and stronger corporate governance practices. Overall, this study highlights the causes and consequences of voluntary sustainability reports, focusing on how environmentally sensitive firms manage environmental risk through these publications.
Publication Title
Business Strategy and the Environment
DOI
10.1002/bse.4158
Recommended Citation
Chung, C.Y., Kim, I. and Yang, R., 2025. Are Environmentally Sensitive Firms More Likely to Release Corporate Environmental Disclosures? Evidence From Environmental Risk Management. Business Strategy and the Environment. https://doi.org/10.1002/bse.4158
Comments
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