Green Image Management in Supply Chains: Strategic Disclosure of Corporate Suppliers
50 Pages Posted: 12 Oct 2020 Last revised: 16 Aug 2023
Date Written: July 25, 2020
Abstract
This paper examines how firms manage their disclosure of customer-supplier relationships to create a favorable green image in their supply chain. Our study finds strong evidence that firms strategically disclose relationships with environmentally responsible (“good”) suppliers while withholding relationships with “bad” suppliers, ceteris paribus. This strategic disclosure is particularly pronounced for firms with a worse ESG rating, a greater concern for their brand image, and a higher level of institutional ownership. Additionally, it tends to increase as public awareness of climate change grows and decreases as regulations on environmental information transparency strengthen. Furthermore, we find that firms engaging in strategic disclosure of “green” suppliers experience higher future stock returns and asset turnover, indicating that investors and consumers may not fully understand the implications of such disclosure.
Keywords: strategic disclosure, environmental, social, and governance (ESG), supply chain management, green image
JEL Classification: M41, M11, M14
Suggested Citation: Suggested Citation