Will the EU Taxonomy Regulation Foster Sustainable Corporate Governance?

The European Union has made the fight against climate change and the achievement of a sustainable economy political priorities. To promote the ecological transition of companies and corporate transparency, a broad regulatory framework has been developed. This paper analyses the effect of institutional pressures derived from this regulatory framework on the environmental information disclosed by 832 multinationals in the period 2011–2020. The results reveal a positive global effect, although, at an individual level, this effect is only maintained for the regulations and recommendations related to non‐financial information and the European Green Deal. Furthermore, the impact differs depending on the category of environmental information disclosed.

Section: Discussionmentioning

confidence: 99%

How does the European Green Deal affect the disclosure of environmental information?

García‐Sánchez

Martínez

Marín‐Hernández

et al. 2023

“…Female boards are more concerned with equity and other people's demands (Rudman & Glick, 2001). This implies that female directors in stakeholder-oriented organizations are more interested in substantive green initiatives rather than promoting greenwashing as it undermines stakeholder interests and potential investment enthusiasm (Pacces, 2021). Female directors are more likely than male directors to adopt ethical corporate strategies due to the potential for strict penalties (Adams & Ferreira, 2009).…”

Section: Female Directors and Age Diversitymentioning

confidence: 99%

Greenwashing behavior and firm value – From the perspective of board characteristics

Chen

Dagestani

2023

With increasing environmental pressures on companies, they are beginning to disclose corporate social responsibility reports actively. However, some studies point to greenwashing in corporate social reporting as a cause for concern. Our study aims to uncover the board's role in the relationship between greenwashing and firm value. Using a two‐way fixed effects model and a series of robustness tests, our findings suggest that greenwashing increases firm value. We introduce board diversity to answer the question of who is driving greenwashing behavior. Female directors, age diversity, educational background, and shareholder aggregation inhibit greenwashing behavior, while local directors and political connections promote this effect. Greenwashing increases firm value by improving the quality of disclosure, stakeholder concerns and alleviating financing constraints. Finally, greenwashing has greater economic performance for heavily polluting firms, firms audited by the Big 4 and firms with mandatory disclosure. This study provides rich empirical findings for boards and greenwashing behavior, offering novel theoretical insights to promote substantive CSR and board governance in developing countries such as China.

“…"Common" governance refers that multi-agent (e.g., government, companies, media, nonprofit organizations and citizens) participate in governance individually, without information sharing and cooperation. Previous studies have explored the government supervision (e.g., government regulation [Sun & Zhang, 2019], European Union' classification regulations [Pacces, 2021], government subsidies and penalties [Yang et al, 2021]), corporate internal supervision (e.g., independent directors and institutional investors [Yu et al, 2020], committee on corporate strategy and corporate social responsibility [Huang, Francoeur, & Brammer, 2022]) and media supervision (Fernando et al, 2014). However, the phenomenon of greenwashing is still not effectively managed.…”

Section: Governance Of Greenwashingmentioning

confidence: 99%

How does multi‐agent govern corporate greenwashing? A stakeholder engagement perspective from “common” to “collaborative” governance

Wang

Sun

Zhu

et al. 2022

Greenwashing is an obstacle to the sustainable development of society, but the current governance of greenwashing is still a “common” governance, not a “collaborative” governance. Accordingly, this study focuses on the three stakeholders of greenwashing governance: company, media and government. Using a sample of listed companies that have published social responsibility reports from 2014 to 2018, this study analyzes the influence mechanism of media reports on greenwashing and discusses the moderating role of government regulation and mediating role of internal supervision. This study finds that internal supervision plays a hiding role in the process of media reports reducing greenwashing, but government regulation has a weakening effect on this hiding effect, showing a “common” governance. Simultaneously, this “common” governance is heterogeneous across time (i.e., corporate life cycle), space (i.e., spatial spillovers) and environment (i.e., the uncertainty of corporate external policies). However, when the cooperation between the government and the media is strengthened, the hiding behavior of the companies is suppressed and the performance of greenwashing governance is improved, so that “collaborative” governance is achieved. Against this backdrop, this study provides a macro‐to‐micro governance policy framework for corporate greenwashing from the four dimensions of strategy, systems, tools, and information to achieve “collaborative” governance. This study enriches the research on the corporate greenwashing governance and has practical implications for the government, media and other stakeholders.