Abstract
The objective of this paper is to examine the determinants of environmental sustainability disclosure of Saudi listed companies. Two main dimensions of the factors influencing sustainability disclosure were investigated: company characteristics (size, age, profitability, type of industry and leverage) and board of directors’ characteristics (size, independence and annual number of meetings). This research study utilized the content analysis approach in order to collect data from annual reports of non-financial companies listed in the Saudi stock market between 2015 and 2017. The total number of annual reports that were covered in this research is 357, which pertain to 119 non-financial companies that were listed during the study period. The study focused on disclosure of environmental sustainability, which is one of the three branches of sustainability (social, economic and environmental). The Global Initiative Reports GRI (G4) issued by the United Nations in 2013 was used to examine these annual reports with respect to the disclosure of environmental sustainability. The findings of this paper reveal that the type of industry, company’s profits, company size and company age are important determinants when it comes to the disclosure of environmental sustainability for Saudi non-financial companies listed in the period of 2015–2017. The elements of corporate governance except for board independence are not important factors, which might be due to the voluntary nature of disclosure of sustainability information. These results suggest that factors related to the identity of a group of companies might influence the disclosure for such type of companies, particularly when the disclosure is voluntary in nature. Therefore, the explanation provided by legitimacy theory with regards to voluntary disclosure is more influenced by bounded factors that reflect upon a group of companies. The results of this paper should help in evaluating the overall contribution of Saudi companies toward the achievement of Saudi Vision 2030, which intends to enhance the quality of life in Saudi society. Keywords: Sustainability, Disclosure, Environmental report, Saudi companies, Accounting sustainability. DOI : 10.7176/JESD/11-2-09 Publication date: January 31 st 2020
Highlights
Sustainability is a global concern, and organizations and governmental agencies worldwide are continuously making efforts and attempts to find solutions for the mitigation, reduction and prevention of sustainability problems
It is presented as an average and measured as the average items disclosed by the company to the total items that should be disclosed according to GRI (G4) indictors
As shown in table (2) Saudi listed companies have an average disclosure of 0.098, indicating that only 10 % on average of www.iiste.org all the environmental disclosure index items are disclosed by Saudi companies listed on the Saudi stock market
Summary
Sustainability is a global concern, and organizations and governmental agencies worldwide are continuously making efforts and attempts to find solutions for the mitigation, reduction and prevention of sustainability problems. Kutay and Tektüfekçi (2016) argued that, from the 1970’s to the present, the concept of sustainable development has evolved into definitions that involve three pillars of sustainability, social, economical and environmental, which are interrelated and complementary. Sustainability is viewed as a delicate balance between the economic, environment and social health of a community, nation and the earth. This www.iiste.org paper is exclusively concerned with environmental sustainability, which is articulated in this paper as business corporations’ responses to threats to the environment, which could influence the ability of future generations to meet their own needs
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