Conceptual framework to improve financial performance via institutional pressures and voluntary environmental information disclosure

This study delves into the intricate relationship between institutional pressures and financial performance, with a focus on the mediating role of voluntary environmental information disclosure (VEID). Grounded in institutional theory and the resource-based view (RBV), the study investigates how coercive, normative, and mimetic institutional pressures drive firms to adopt VEID, which in turn impacts their financial performance. VEID plays a pivotal role in allowing firms to convey their environmental performance, promoting transparency, and bolstering stakeholder trust. This heightened trust significantly contributes to improved financial performance by enhancing the firms' reputation and credibility. In addition to external communication, VEID also acts as a mechanism for internal performance enhancement, aligning firms' environmental strategies with institutional pressures. Through the integration of VEID practices, firms are better positioned to meet regulatory requirements, align with stakeholder expectations, and enhance operational efficiency. The findings underscore the critical importance of integrating voluntary environmental information disclosure within both institutional and resource-based strategies to attain sustainable financial performance and ensure long-term success in a competitive and environmentally conscious market.

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