The organization is an institutionally embedded entity and its behaviour is conditioned by the expectations emanating from the environment. This paper attempts to determine if environmental reporting can constitute a strategic tool with which organizations can manage their legitimacy. A longitudinal analysis of the annual reports of 90 American firms confirms - in accordance with legitimacy theory - that organizations use environmental reporting as a legitimization strategy with its stakeholders, and shows that the diffusion of these practices is strongly linked to institutional pressures.