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

Omri Even-Tov (), Guoman She (), Lynn Linghuan Wang () and Detian Yang ()
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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

Review of Accounting Studies, 2025, vol. 30, issue 2, No 23, 1968-2014

Abstract: 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.

Keywords: Climate disclosure; Government procurement; Climate change; Census count; Federal spending (search for similar items in EconPapers)
JEL-codes: H57 M14 M40 O13 Q54 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11142-024-09866-0

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