Ethical Correlates of Family Control: Socioemotional Wealth, Environmental Performance, and Financial Returns

Luis R. Gómez-Mejía, Fernando Muñoz-Bullón, Ignacio Requejo, Maria J. Sanchez-Bueno

Journal of Business Ethics · 2025 · Volume 198 · Issue 4

Abstract

We examine and test the environmental performance of family firms across 22 European countries and find that they exhibit better environmental performance than nonfamily firms. This result confirms prior research conducted in the United States. More specifically, we conclude that family firms engage in more substantive environmental actions than nonfamily firms. Furthermore, we hypothesize and confirm that family firms do not pay a financial price for lower emissions, which should facilitate the voluntary, non-instrumental adoption of pollution control practices. Finally, we also find that the relationship between substantive environmental activities and financial returns is stronger among family firms that have family members on the board and are under the influence of the first generation.

Keywords

Board of directors, Family firm, Financial returns, Generation, Substantive environmental actions, Socioemotional wealth

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