Abstract
The major objective of the present paper is to identify the factors that influence the dissemination of environmental information. In particular, analyst stock recommendation, country level risk, corporate value and environmental performance are surveyed as determinants of the environmental dissemination level. The survey was based on a sample of 92 multinational firms for the period 2009–2013, longer than that used in most past works. The methodology employed on our data is the panel data analysis with fixed effects. As proxies, for the dissemination level of environmental information, two different environmental disclosure indexes are used the Environmental Disclosure Score and Carbon Disclosure Leadership Index. According to our findings, the environmental performance in terms of Emission Reduction Initiatives and the country’s risk premium affects in a positive way the dissemination of environmental disclosures while the results regarding the stock analyst recommendation are controversial. Another important finding is that the firm’s value is validated as an insignificant factor for the dissemination level of environmental information. The aforementioned results provide the corporate managers with a tool to attract environmental friendly investors. The novelty on the present manuscript stands on the use of proxies for the environmental performance; namely the first one is based on outcome – objective while the second one refers to the corporate intention, elements that enrich the existing literature in the field of environmental behavior and dissemination of the environmental information of a firm.
Highlights
Non-financial information has become vital for the socially responsible investors over the last decade
The first proxy is based on terms of output (Patten 2002; Clarkson et al 2008; Luo, Tang 2014) Environmental Disclosure Score (EDS) as provided by Bloomberg database while the second one is based on terms of commitment to the environment without feeling the pressure for the environmental outcome entitled Carbon Disclosure Leadership Index (CDLI) and calculated by Carbon Disclosure Project (Graafland et al 2004)
As far as the country risk premium concerns, the results indicate that firms located in countries with high risk premium increase the information level of environmental disclosure rejecting H1
Summary
Non-financial information has become vital for the socially responsible investors over the last decade. This study uses the term of Corporate Social Responsibility (CSR) in order to describe the non-financial information provided on the environmental disclosure as a part of CSR disclosure (Said et al 2013; Qiu et al 2016). Patten 2002; Hughes et al 2001; Al-Tuwaijri et al 2004; Clarkson et al 2008; Luo, Tang 2014; Liao et al 2015; Qiu et al 2016; Rankin et al 2011), there is still a number of novelty determinants that have not been incorporated in relation to the extent of environmental disclosure. Even if the determinant of environmental performance is well investigated on the environmental disclosure level, the study uses two proxies based on different approaches for the extent of environmental disclosure. Studies that investigate the effect of firm value on the extent of non-financial disclosure found controversial results (Drobetz et al 2014; De Villiers, Va Staden 2011, Chen et al 2014), for instance, Tobin’s Q variable is reconsidered in the proposed model to ascertain the effect on the extent of environmental disclosure
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