Attention, Action, and Greenwash in Family-Influenced Firms? Evidence From Polluting Industries

Drawing on complementary theoretical perspectives, we investigate whether and to what extent family-influenced firms differ from their nonfamily counterparts in terms of the relationship between managerial attention to natural environmental issues and concomitant environmental actions. Using data from letters to shareholders and the KLD database, we investigate 97 firms in five polluting industries. Our findings indicate that family firms positively moderate the relationship between top managers' attention to natural environmental issues and proactive environmental action. Conversely, nonfamily firms demonstrate less proactive environmental action as their attention to environmental issues increases, suggesting greenwashing. We argue that attention and action behaviors in family firms are intimately connected with their desire to preserve socioemotional wealth and indicate a lower propensity to greenwash, whereas nonfamily firms' short-term financial objectives may motivate a different response pattern.