This study examines the association between corporate environmental violations and dividend policy. Environmental violations negatively impact stock returns and substantially impair the reputational capital of the offending firms. We posit that violating firms adopt a higher dividend payout policy as one of the strategies to regain investors confidence and market reputation. In line with this conjecture, our findings evidence that environmental violation is positively associated with accused firms dividend payout. Our findings remain robust with several alternative tests including the Entropy Balancing test, alternative measures of environmental violations and dividends, and additional controls. These findings may assist policymakers and regulators in assessing existing policy effectiveness and developing targeted strategies comprehending violating firms approaches after the revelation of environmental wrongdoing.