Environmental disclosure and corporate cash holdings Policies: Which macro-categories matter?

Carmen Gallucci, Rosalia Santulli and Riccardo Tipaldi

International Review of Economics & Finance, 2025, vol. 102, issue C

Abstract: This study investigates the relationship between environmental disclosure practices and corporate cash-holding policies, emphasising the tunnelling risks minority shareholders face. Utilising the Global Reporting Initiative (GRI) as a framework for disclosure and applying fuzzy-set Qualitative Comparative Analysis (fsQCA) to a sample of 254 European firms listed on the STOXX Europe 600, the analysis identifies distinct configurations of environmental disclosure linked to varying levels of cash holdings. The results indicate that firms with high levels of cash holdings tend to engage in comprehensive environmental disclosure—especially concerning energy, water efficiency, emissions, waste, and supplier environmental assessments—which may diminish opacity and signal a reduced risk of expropriation. In contrast, firms with low cash holdings typically offer narrow or selective disclosures, generally limited to energy and emissions, while neglecting other significant areas such as materials, biodiversity, and supply chain impacts. This fragmented approach introduces opacity in corporate priorities and decision-making, potentially raising concerns among minority shareholders regarding hidden risks and misalignment between managerial actions and broader stakeholder interests. Throughout the sample, biodiversity is consistently underreported. By illustrating how the breadth of environmental disclosure interacts with cash-holding levels, this study highlights the role of transparency in influencing the perceived likelihood of cash being diverted for private benefit in contexts characterised by agency conflicts.

Keywords: CSR; ESG; Expropriation; Global reporting Initiative; Minority shareholders; Tunneling (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056025004320
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:102:y:2025:i:c:s1059056025004320

DOI: 10.1016/j.iref.2025.104269

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().