The Natural Environmental Strategies of International Firms: Old Controversies and New Evidence on Performance and Disclosure

Abstract

Previous academic and popular literature has raised important debates concerning the contradictory incentives of international firms to reduce their environmental impacts and offer transparent environmental information about their operations. As an exhaustive review of this literature reveals mixed and partial evidence, we compared the individual corporate environmental performance and disclosure of the 100 most international non-financial firms in the world to those of 16,023 firms in their industries and a group of matched pairs of firms for three different years. Our results show that although the top international firms have a much better record of environmental disclosure than the firms within their industries and the matched pairs, the top international firms also show worse environmental performance than their peers. The results suggest that the top international firms seek legitimation for their environmental activities by means of voluntary disclosure.