Facility Compliance and Natural Disaster Events: Evidence From the U.S. Clean Air Act

With the increasing severity and frequency of natural disasters, we investigate the impact of such events on company environmental performance in the United States. This study analyzes the effect of natural disasters on facility compliance with the Clean Air Act throughout the sample period from 2013 to 2022. Our findings show that facilities located in disaster areas are associated with higher violation rates. By examining individual types of disasters separately, we find that the results are most pronounced for floods, fires, and severe storms. We suggest that regulators collectively evaluate the environmental policies and practices for companies in areas prone to natural disasters.