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Tone at the top: CEO environmental rhetoric and environmental performance

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  • Cong, Yu
  • Freedman, Martin
  • Park, Jin Dong

Abstract

In this study we attempted to ascertain the environmental leadership and commitment of the CEO as evidence of “tone at the top” in the belief that this would lead to enhanced environmental performance. We measure “tone at the top” by the environmental disclosure score which is collected from a content analysis of CEO letters to shareholders. We adopt the two environmental performance measures: (1) Environmental Impact Score (EIS) from Newsweek Green Ranking and (2) Modeled Hazard Population Results (MHPR) based on Risk-Screening Environmental Indicator (RSEI) models built by EPA. The results indicate that the environmental disclosure score from the CEO letter is inversely correlated with environmental performance. The overall findings support legitimacy theory in that CEOs essentially “spin” firms' environmental performance so it looks better than it actually is.

Suggested Citation

  • Cong, Yu & Freedman, Martin & Park, Jin Dong, 2014. "Tone at the top: CEO environmental rhetoric and environmental performance," Advances in accounting, Elsevier, vol. 30(2), pages 322-327.
    • Handle: RePEc:eee:advacc:v:30:y:2014:i:2:p:322-327
    DOI: 10.1016/j.adiac.2014.09.007
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    References listed on IDEAS

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    Cited by:

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    5. Pei‐Chi Kelly Hsiao & Charl de Villiers & Claire Horner & Hein Oosthuizen, 2022. "A review and synthesis of contemporary sustainability accounting research and the development of a research agenda," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(4), pages 4453-4483, December.
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