Name
Litigation Risk and Greenwashing: Evidence from Federal Judge Ideology
Date & Time
Tuesday, July 7, 2026, 3:55 PM - 4:20 PM
Description
This study examines the impact of environmental litigation risk, as influenced by the political leanings of federal judges, on firms' environmental greenwashing. By using the ideological leanings of judges’ nominating presidents as a proxy for judicial political ideology, we find that liberal judges are associated with a higher incidence of environmental lawsuits. Our analysis further shows that firms in circuits with a greater proportion of liberal judges tend to include more greenwashing. Cross sectional tests show the effect is amplified when external administrative oversight is weaker and internal environmental governance is limited but attenuated by more sophisticated plaintiffs. Overall, judge ideology shapes environmental litigation risk and induces firms to adjust disclosure strategically, degrading the quality of the environmental information available to investors. These findings highlight the limits of relying solely on courts to discipline disclosure and support the need for standardized, decision‑useful environmental reporting rules and assurance.
Xinjiu Gu
Keywords
federal judge ideology; litigation risk, environmental disclosure, greenwashing
Theme
CSR
Author 1
Fang Zhang
Author 2
Jian Zhang
Author 3
Xinjiu Gu