An Empirical Evaluation

This study investigates the prevalent issue of environmental injustice, where organizations tend to establish and operate high-polluting manufacturing facilities more frequently in communities of color than in predominantly white areas. This practice leads to significantly higher emissions of toxic chemicals, exposing minority communities to adverse health effects such as cancer. To address this injustice, we examine the impact of a firm governance reform – the appointment of a Chief Sustainability Officer (CSO).

Using data on the toxic releases of U.S. manufacturing facilities from 2000 to 2020 and a difference-in-differences research design we find that appointing a CSO can lead to a 20% reduction of toxic releases. This reduction is particularly notable in facilities located in underserved communities, thereby contributing to a decrease in environmental injustice. We also identify the implementation of toxic release source reduction activities as a potential mechanism behind these findings.

Our primary theoretical contribution is to demonstrate the potential usefulness of corporate governance reforms as a control mechanism for addressing environmental injustice, an issue that has proven challenging to regulate effectively. Additionally, we offer empirical evidence regarding the environmental impact of appointing a CSO, contributing to the ongoing debate on this topic.

With

I am Finn Petersen, a fourth-year Ph.D. Candidate in the Supply Chain and Operations department at the Carlson School of Management, University of Minnesota. My research focuses on understanding various aspects of organizational misconduct, a term I broadly define as firm behavior that violates established laws or social norms, potentially causing significant harm to consumers, employees, shareholders, and the environment. In my dissertation, I explore the roles of governance reforms and regulatory interventions in preventing misconduct using datasets and methods tailored to each research question.

Before joining the University of Minnesota, I worked in business development in the industrial manufacturing industry at LESER GmbH & Co. KG. In this role, I collaborated closely with maintenance departments and regulators to ensure process safety and prevent accidental misconduct. I have a Bachelor's degree from the Nordakademie (Germany) and a Master's degree from Chalmers University of Technology (Sweden).