In the short-term, it is never the wrong time to certify: the mitigating impact of certification on firm valuation

What is it about?

This article examines the timing of the disclosure of a firm’s environmental certification. In general, certifications comply with signaling and legitimacy theories and serve to bolster a firm’s reputation, financial performance, and valuation, among other benefits. However, when a firm finds itself facing a reputational threat it is unclear whether disclosing a recent certification would provide those same benefits or be perceived by investors as “greenwashing” or a disingenuous distraction from the threat.

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