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Corporate environmental governance and firm value: beyond greenwashing for sustainable development

Author

Listed:
  • Hongzhen Fu

    (Minnan Normal University)

  • Qingquan Jiang

    (Xiamen University of Technology)

  • Javier Cifuentes-Faura

    (University of Murcia)

  • Qiuying Chen

    (Xiamen University of Technology)

Abstract

Corporate greenwashing is becoming more common as a result of companies' growing awareness of the need to protect the environment and help to achieve the Sustainable Development Goals. This study analyzes the relationship between corporate environmental governance (CEG) and firm value from short- and long-term perspectives. It is based on balanced panel data of 575 Chinese-listed companies in high-polluting industries from 2012 to 2018. The findings demonstrate that, first, there is no correlation between CEG and firm value during either the current or the first lag period, suggesting that corporate environmental governance has no discernible short-term effects on company value. Second, in the second and third eras, there is a noteworthy positive association between CEG and company value, suggesting that, over time, corporate environmental governance can considerably raise the business's future value. Corporate environmental governance significantly increases business value over the long run. This study goes beyond only offering greenwashing; instead, it offers some policy implications for businesses to be sustainable.

Suggested Citation

  • Hongzhen Fu & Qingquan Jiang & Javier Cifuentes-Faura & Qiuying Chen, 2025. "Corporate environmental governance and firm value: beyond greenwashing for sustainable development," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(9), pages 21383-21400, September.
    • Handle: RePEc:spr:endesu:v:27:y:2025:i:9:d:10.1007_s10668-023-04375-7
    DOI: 10.1007/s10668-023-04375-7
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    Keywords

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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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