Do ESG controversies boost the effectiveness of independent directors in stimulating environmental disclosure?

The increasing institutional attention given to environmental sustainability has prompted companies to disclose more information about their strategies and activities aimed at reducing environmental impact. In the literature, ESG disclosure is viewed as a governance mechanism that helps reduce information asymmetries, with significant research exploring its connection to board characteristics. However, prior studies present conflicting evidence regarding the relationship between board independence and environmental disclosure. This is probably due to the existence of moderation variables that play an explanatory role. This research investigates the role of firms’ media exposure due to Enviromental Social and Governance (ESG) controversies in explaining the relationship between board independ-ence and environmental disclosure in contexts characterized by different levels of institu-tional pressure. Using econometric panel data dependence techniques, the study analyzes 2,585 firm-year observations from non-financial publicly traded companies in 19 Euro-pean countries over the period 2002–2020. Contrary to the dominant trend in corporate governance literature, our research provides empirical evidence that board independence can negatively impact environmental disclosure. This effect is amplified by the level of firms’ media exposure due to ESG controversies, particularly for highly visible firms facing intense institutional pressure. Our study contributes to the academic debate on ESG contro-versies, showing that independent directors may be inclined to withhold information about environmental scandals. Companies operating in high-pressure institutional contexts tend to disclose less information to the public to avoid losing trust, consensus and legitimacy.