Are Philanthropic Firms Climate‐Friendly? The Role of Ethical Posture

ABSTRACT This study examines the relationship between corporate philanthropy and environmental performance, with the moderating effect of the ethical posture of firms. Using country–industry–year fixed effect regression on an international dataset spanning nine sectors and 44 countries from 2002 to 2021, we test two hypotheses: the synergy hypothesis, where philanthropy enhances environmental performance (supported by positive associations with aggregate performance, carbon emissions, and resource consumption), and the trade‐off hypothesis, where it hinders eco‐innovation. Additionally, we examine the moderating role of ethical posture and find a positive influence on the relationship between philanthropy and environmental performance for aggregate performance, carbon emissions, and eco‐innovation, but not for resource consumption. Subgroup analyses reveal variations across high‐ versus low‐Worldwide Governance Indicators (WGI) countries, polluting versus non‐polluting sectors, US versus non‐US samples, strong versus weak governance firms, and early versus late periods. These findings offer valuable implications for regulatory bodies, policymakers, companies, and governments in aligning philanthropy with sustainable outcomes.