Does Religious Diversity Play Roles in Corporate Environmental Decisions?

Abstract

Drawing on the stewardship and dominion theories, this paper empirically investigates the association between local religious diversity within which firms are headquartered and corporate environmental initiatives. Using a large U.S. sample, we document that firms headquartered in high religiously diverse counties are more involved in corporate environmental initiatives. This positive association remains robust after using a variety of robustness checks. The findings support the hypothesis that local religious diversity is significantly associated with firms’ decisions concerning the environment. This paper contributes to the literature by examining the extent to which the characteristics of society shape firms’ environmental initiatives.