Economics & Finance
Disclosure Paradox of Externalities
When companies voluntarily disclose negative environmental data, they simultaneously achieve three contradictory objectives: (1) establishing a reputation for transparency, (2) setting favorable baselines through selective framing (e.g., 2.5 billion gallons sounds large, but 0.12 L/kWh sounds small), and (3) preempting regulatory or public criticism. Disclosure becomes a tool of power rather than genuine accountability.
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