EPA scrutiny and voluntary environmental disclosures

• 成果类型: Article; Early Access
• 署名作者: Zakota, Mark
• 署名单位: University System of Maryland; University of Maryland College Park
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-025-09901-8
• 发表日期: 2025
• 关键词: corporate social-responsibility; CONFERENCE CALLS; nonfinancial disclosure; capital-markets; RISK-MANAGEMENT; INFORMATION; governance; ENFORCEMENT; BOARD; analysts

摘要

Market participants have called on the SEC to address the lack of disclosures about firms' environmental impacts, investments, and exposures. However, the frictions that obstruct the flow of environmental information are not well understood. I shed light on these frictions by examining whether scrutiny by the Environmental Protection Agency (EPA) restricts the firm's voluntary environmental disclosures in earnings conference calls. Consistent with the notion that EPA scrutiny gives rise to disclosure frictions, I find a negative relation between EPA scrutiny and the environmental disclosures of scrutinized firms. This negative relation is concentrated among firms without environmental expert directors, suggesting that environmental governance mitigates the chilling effect of EPA scrutiny. In terms of disclosure quality, I show that environmental disclosures include fewer quantitative details under EPA scrutiny. Collectively, these findings provide insights into the frictions that restrict the flow of environmental information to market participants, an important issue given the SEC's efforts to improve current disclosure practices.