Growing literature focuses on environmental management's positive influence on firm performance; however, the specific link between environmental strategies, particularly waste management, and firm default risk remains unexplored. Our research addresses this gap by empirically examining the relationship between a firm's waste production/recycling practices and its risk of default, using international data spanning 40 countries from 2002 to 2018. Our findings reveal that firms with higher waste generation face increased default risk, whereas those with superior recycling practices exhibit reduced risk. The results hold steady even after accounting for governance mechanisms and the impact of the global financial crisis. We address potential endogeneity issues by employing lagged independent variables, propensity score matching, and a two-stage least squares approach to affirm the robustness of our findings. Our research not only enriches academic discussions on environmental management and corporate risk but also offers practical insights for firms aiming to align environmental and financial objectives.