Environmental Management Disclosure and Environmental Innovation: Evidence from the Global Energy and Utilities Sector

Environmental transparency has become increasingly important in the global transition toward sustainable energy systems, particularly within the energy and utilities sector. This study examines the association between environmental management disclosure (EMD) and environmental innovation (EI) in global energy and utilities firms. Using panel data from 791 firms (1582 firm-year observations) obtained from Refinitiv Eikon for 2022–2023, the study employs descriptive statistics, correlation analysis, ANOVA and independent-sample t-tests, and panel regression analysis. The Random Effects Model is selected as the main estimation approach after the Hausman and Lagrange Multiplier tests indicate that a random-effects specification is more appropriate than fixed effects or pooled OLS. To strengthen the analysis, robustness procedures are conducted through 5% winsorized regression, Two-Stage Least Squares (2SLS) estimation to address potential endogeneity, and Multiple Correspondence Analysis (MCA) to assess whether the components of the EMD construct exhibit satisfactory internal consistency. The main results show that EMD is positively associated with EI, while firm size and developed-country status are also positively significant. The robustness analyses yield consistent evidence regarding the positive association between EMD and EI. These findings indicate that environmental disclosure is closely associated with innovation-oriented sustainability outcomes, while also suggesting that the observed relationship should be interpreted with caution given the short two-year horizon and the observational nature of the research design.