Revealing the Truth: the Moderating Role of Internal Stakeholders in Sustainability Communication

Firms increasingly use sustainability communication as a marketing tool to build competitive advantage. Greenwashing allegations raise concerns that sustainability communication may not always represent the firm’s true sustainability performance. Studies examining the relationship between sustainability performance and communication have yielded contradictory findings and despite extensive research, the results have not been reconciled yet. This study addresses the knowledge gap by examining the influence of internal stakeholders on a firm’s communication behavior. Grounded in stakeholder theory, it analyzes how carbon performance and communication are shaped by three influential internal stakeholder groups: management, the board, and employees. Based on longitudinal data of S&P 500 firms with 1741 observations from 2011 to 2019, the study confirms a positive relationship between carbon performance and communication and shows that internal stakeholders moderate this relation. Firms with a chief marketing officer (CMO), a stronger board, and a stronger sustainability perception among employees are more likely to communicate carbon emissions, even if they exhibit inferior performance.