The dynamics of selective environmental disclosure: Earnings pressure and environmental committee

In an era where environmental information holds growing importance for stakeholders, the phenomenon of selective environmental disclosure remains underexplored in literature. This study centers on this phenomenon and posits that it serves as a catalyst for environmental irresponsibility. Drawing on stakeholder-agency theory, we examine how earnings pressure, measured as the discrepancy between analyst forecast consensus and actual performance, influences a firm’s propensity for selective environmental disclosure. We further investigate the moderating role of environmental committees and their characteristics in shaping the relationship between earnings pressure and selective environmental disclosure. Using data from 1,321 U.S. publicly listed firms from 2005 to 2021, our analysis reveals that earnings pressure significantly increases managers’ engagement in selective environmental disclosure; and the presences of an environmental committee and a CEO serving on that committee amplify this effect. Our findings contribute to the discourse on sustainable operations and offer insights for managerial practices and policy formulation.