Biodiversity disclosure for supply chain legitimacy: effects of sustainability-related practices

Purpose Given the urgent ecological crisis the world is facing, this study examines whether firms that adopt sustainable supply chain (SSC) practices are more likely to disclose biodiversity-related information. Through legitimacy theory, this study aims to explore the influences of firms’ maturity and environmental risks on legitimacy strategies to ensure alignment between SSC practices and societal expectations. Design/methodology/approach Data from 2002–2021 were gathered from an international panel data set comprising 55,668 observations and analyzed using country–year–sector fixed effects regression. Findings Our analysis shows that firms that engage in SSC practices have high disclosure levels regarding biodiversity. The authors also find that while mature firms can link SSC practices to biodiversity disclosure, firms in the startup and growth stages cannot. In addition, this study offer new evidence that polluting firms with higher environmental risks do not engage more with biodiversity disclosure than less polluting firms. These results explain a legitimacy gap between SSC practices and societal expectations based on firms’ characteristics. Originality/value This study uncovers supply chain legitimacy through the influence of firms’ maturity and environmental risk on biodiversity disclosure. Our analysis reveals the effectiveness of a novel “expanding legitimacy” strategy based on SSC practices.