Growing evidence indicates that environmental disclosures are often misaligned with firms’ actual impacts on the natural environment. In the context of disclosing environmental information, we investigate family firms’ propensity to selectively disclose, which is a form of greenwashing. Drawing on agency theory and the socio-emotional wealth perspective, we compare greenwashing patterns between family and non-family firms and examine two key boundary conditions that may influence family firms’ propensity to greenwash: the firm’s level of environmental damage and its age. Results from a panel sample of 1557 firms from 40 countries reveal that family firms are more prone to selective disclosure compared to non-family firms, but this effect is weaker for more environmentally damaging family firms. Overall, the results suggest that family firms are willing to face the risks of selective disclosure being exposed in the future, indicating that they do not always make decisions based on long-term considerations when it comes to environmental disclosures.
