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How government procurement shapes corporate climate disclosures, commitments, and actions

Author

Listed:
  • Omri Even-Tov

    (University of California, Berkeley)

  • Guoman She

    (University of Hong Kong)

  • Lynn Linghuan Wang

    (University of Hong Kong)

  • Detian Yang

    (University of Hong Kong
    Fudan University)

Abstract

This study examines how government procurement impacts firms’ environmental disclosures and whether they have tangible effects. Using a triple-difference research design that exploits the exogenous increase in federal funding allocations to counties based on population census revisions, we find that firms with high exposure to government contracts significantly increase climate disclosure following expanded procurement opportunities. We also document that enhanced disclosure is characterized by a positive tone that emphasizes firms’ green investment and commitment to climate adaptation. The effect is more pronounced in counties with a greater increase in procurement volume and when firms have lower ex ante sustainability performance. Finally, we find firms that increase climate disclosure are more likely to earn government contracts, and they undertake real actions by reducing toxic emissions and enhancing the development of green products. Overall our results suggest government procurement promotes corporate climate responsibility by incentivizing firms to undertake climate mitigation actions.

Suggested Citation

  • Omri Even-Tov & Guoman She & Lynn Linghuan Wang & Detian Yang, 2025. "How government procurement shapes corporate climate disclosures, commitments, and actions," Review of Accounting Studies, Springer, vol. 30(2), pages 1968-2014, June.
    • Handle: RePEc:spr:reaccs:v:30:y:2025:i:2:d:10.1007_s11142-024-09866-0
    DOI: 10.1007/s11142-024-09866-0
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    More about this item

    Keywords

    Climate disclosure; Government procurement; Climate change; Census count; Federal spending;
    All these keywords.

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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