Green Patenting and Voluntary Innovation Disclosure

We investigate whether the sustainability implications of firms’ innovative pursuits are associated with their disclosure choices. We find that firms with a greater percentage of patents granted in environmentally sound technologies provide more innovation disclosure in conference calls relative to their industry peers, controlling for the overall level and quality of innovative activity. We also find that firms respond to both (1) environmental media coverage and (2) two shocks to environmental scrutiny with increased innovation disclosure, consistent with companies disclosing more to improve their sustainability reputation. Moreover, green patenting firms providing innovation disclosure enjoy increases in environment- and innovation-specific ESG ratings, consistent with these disclosures informing sustainability reputation. Innovation disclosure is also positively associated with investor response to conference calls, highlighting an additional informational benefit of green patenting firms’ innovation disclosures. Finally, we show that green innovators are more likely to provide disclosures about sustainable innovation specifically, which is inconsistent with patenting firms greenwashing innovation disclosures