Future in Words, Future in Action: How Language Shapes Firms' Environmental Management Practices

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Abstract
This study investigates how linguistic structures shape corporate sustainability behavior by examining the relationship between future time reference (FTR) and firms' adoption of environmental management practices (EMPs). Drawing on discounting theory, we argue that in weak‐FTR languages, where the future does not require obligatory grammatical marking and can be expressed using present‐tense forms, speakers perceive the future as more proximate. This reduces temporal discounting and encourages long‐term orientations, thereby increasing the likelihood of environmental investments. Using World Bank Enterprise Survey (WBES) data from over 220,000 firms across multiple industries, we find strong evidence that firms in weak‐FTR contexts are more likely to adopt EMPs. Yet, the effect varies across firms and sectors. Younger firms are more responsive than older firms, larger firms translate weak‐FTR influences more effectively into environmental action, and internationally oriented firms amplify the effect compared to domestically focused firms. Overall, the findings show that while linguistic structures shape intertemporal decision‐making, their impact on sustainability adoption depends on organizational characteristics and sectoral contexts. This highlights important boundary conditions for discounting theory and advances understanding of the behavioral foundations of corporate sustainability.
Funding Information
  • Fundamental Research Funds for the Central Universities (25SGB014)

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