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

Hongzhen Fu (), Qingquan Jiang (), Javier Cifuentes-Faura () and Qiuying Chen ()
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Hongzhen Fu: Minnan Normal University
Qingquan Jiang: Xiamen University of Technology
Javier Cifuentes-Faura: University of Murcia
Qiuying Chen: Xiamen University of Technology

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2025, vol. 27, issue 9, No 44, 21383-21400

Abstract: 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.

Keywords: Corporate environmental governance; Firm value; Lag effect; Cumulative effect; Sustainable development; Greenwashing (search for similar items in EconPapers)
JEL-codes: G32 L21 M14 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10668-023-04375-7

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