Beware of companies whose environmental reports are confusing

What happens when a firm wants to have the positive image that comes from being seen as transparent about its environmental performance, but its environmental performance is unfavourable? Research suggests that such companies issue confusing reports that are difficult for readers to understand (long sentences, technical terms, multi-syllabic jargon). It seems they want the benefit of appearing to be transparent, while avoiding the reputational costs that come from poor actual performance. In contrast, from a SET perspective, it is important to provide clear and transparent communication about environmental and social performance. Moreover, SET firms may invite third parties to help prepare such reports.

Fabrizio, K. R., & Kim, E. H. (2019). Reluctant Disclosure and Transparency: Evidence from Environmental Disclosures. Organization Science, 30(6), 1207-1231.