Does stakeholder engagement encourage environmental reporting? The mediating role of firm performance

Stakeholder engagement policies have become a relevant strategy in firms because they may signal to stakeholders the commitment of the firm to the stakeholder’s needs and demands. In this research, we aim to examine whether firms with stakeholder engagement policies tend to disclose more environmental information. Additionally, we analyse the moderating role played by firm performance on the association between stakeholder engagement and environmental disclosure. As far as we know, previous research has not addressed these two questions. Our evidence shows that firms with stakeholder engagement policies are more likely to report environmental information, while firm performance negatively moderates the association between stakeholder engagement and environmental disclosure. These findings have implications for policy-makers, firms, stakeholders and other researchers. The authors acknowledge financial support from the Spanish Ministry of Economy, Industry and Competitiveness for the research project ECO 2017-82259-R and from the University Jaume I for the research project UJI-B2018-15. The authors also acknowledge financial support from the National Funds of the FCT – Portuguese Foundation for Science and Technology within the project UID/ECO/03182/2019.