題目：Meet, beat, and pollute

作者：Jake Thomas?& Wentao Yao & Frank Zhang?& Wei Zhu

摘要：We investigate two related questions about the trade-off between the short-term pressures on managers to meet earnings targets and the long-term environmental benefits of reduced pollution. Do firms release more toxins by cutting back on pollution abatement costs to boost earnings in years they meet earnings benchmarks? If so, is that relation weaker for firms with higher environmental ratings? Using Environmental Protection Agency (EPA) data on toxic emissions, we find that U.S. firms pollute more when they meet or just beat consensus earnings per share (EPS) forecasts, suggesting that meeting expectations is a more important goal than reducing pollution. We find this relation is stronger, not weaker, for firms with higher environmental ratings: they increase pollution even more when meeting earnings benchmarks than firms with lower ratings. This suggests that highly rated firms build regulatory and reputational slack over time and use it when needed to soften the negative impact of increased pollution. We contribute to the real earnings management and environmental economics literatures by documenting a negative externality of financial reporting incentives on the environment and society. We also contribute to the corporate sustainability literature by showing that an environmental, social, and governance (ESG) focus does not curb managerial short-termism.

本文意外發(fā)現(xiàn)的可能解釋：污染空間冗余（監(jiān)管冗余與聲譽冗余）

One plausible explanation for our surprising second result is that firms with better environmental track records (reflected in higher E ratings) generate “pollution slack” that allows managers to increase pollution, when needed, at a lower cost than for firms with poor E ratings. Slack could arise from higher accumulated emission allowances that offer firms the flexibility to temporarily increase pollution without exceeding regulatory emission limits (regulatory slack). Slack could also arise if a good reputation that firms have built over the long term with stakeholders such as consumers, communities, and investors softens the negative impact of occasional pollution increases (reputation slack).