Inclusive environmental disclosure practices and firm performance

Abstract

PurposeLittle empirical work has been done on the effects of inclusive environmental disclosure and green supply chain management (GSCM) on firm outcomes. The literature on environmental disclosure suggests that it is a useful practice to improve a firm’s reputation and its financial performance and also to establish a dialogue with stakeholders improving environmental performance. Recent conceptual contributions in the supply chain management literature state that stakeholder expectations and informational needs increasingly concern firm supply chains. Thus, the authors propose that positive effects of inclusive environmental disclosure practices are enhanced in presence of GSCM practices. The paper aims to discuss these issues.Design/methodology/approachTo test these relationships a combination of primary data on environmental disclosure practices, GSCM practices and environmental performance, and secondary data on financial performance was used. A series of hierarchical regression models were performed to test the disclosure-outcome relationships and the moderation of GSCM practices.FindingsResults provide empirical support for the impact of inclusive environmental disclosure practices on financial performance but no support for the impact on environmental performance. Specifically, the more inclusive the environmental disclosure practices the greater and positive is the impact on financial performance in presence of GSCM practices.Originality/valueThis study provides empirical evidence of the joint effects of inclusive environmental disclosure and GSCM practices on environmental and financial performance. Doing so, it reinforces the recent conceptual foundation that firms should align and leverage on supply chain management for disclosure practice effectiveness.