Environmental audit and corporate environmental information disclosure: evidence from external stakeholder concerns

Environmental information disclosure is an important element in the modernization of Chinese environmental governance system and governance capacity. Based on two perspectives of corporate governance and media attention, the relationship between the two and corporate environmental information disclosure is analyzed based on the research samples of Shanghai and Shenzhen A-share listed enterprises from 2017-2021. The empirical results of this paper show that: corporate governance and media attention can significantly enhance corporate environmental information disclosure; media attention has a significant moderating effect on corporate environmental information disclosure, which can further strengthen the relationship between corporate governance and environmental information disclosure, and this moderating effect is more obvious in state-owned enterprises.

As a novel policy, the Ministry of Environmental Protection’s random inspection system (MRIS) is an innovation in the field of environmental enforcement. A growing number of studies have associated corporate environmental information disclosure (CEID) with environmental responsibilities, but they have failed to discuss the relationship between the MRIS and CEID. We construct a multi-period difference-in-differences (DID) model combined with the standard ordinary least squares (OLS) method to investigate the impact of the MRIS on CEID. It finds that the MRIS significantly improves the quality of CEID. Importantly, our examination of the mediating mechanism reveals that the MRIS promotes CEID through enhancing the government’s environmental attention and increasing the environmental compliance pressure of corporate. Notably, the heterogeneity analysis from the perspective of ownership attribute presents that the relationship between the MRIS and CEID is clearer in non-state-owned enterprises than in state-owned enterprises. Additional exploration demonstrates that the implementation of the MRIS enhances the financial performance of corporate by improving the CEID quality, but fails to increase the market value through this channel. Therefore, we recommend that the government proactively implements the MRIS by moderately increasing the random inspection rate. Meanwhile, it is imperative to build a more uniform and stricter CEID system as soon as possible by setting specific and quantitative rules and standards.

PurposeThe authors intend to investigate the relations between corporate strategic positioning and environmental information disclosure (EID) behaviors in the context of the circular economy. The authors argue that the development of the circular economy is crucial to address environmental issues and achieve sustainable development, and companies play a vital role in this process as micro-entities. By examining corporate EID behaviors, the authors could understand their adoption of circular practices to a certain extent.Design/methodology/approachThe authors conduct a content analysis of companies' annual fiscal reports, social responsibility reports and environmental reports and develop text-based proxies for both strategic positioning and EID quality to explore the relationship between them.FindingsThe authors find that corporate strategic positioning does affect corporate EID behaviors. Specifically, firms that implement a prospector strategy are more likely to engage in high-quality EID. Furthermore, the results suggest that green innovation is one of the mediators through which strategic positioning affects EID. Compared with defenders, prospectors are more likely to engage in green innovation, which, in turn, leads to higher-quality EID and demonstrates a more active approach to the circular economy.Originality/valueThis study contributes to the literature on strategic positioning and corporate EID by providing empirical evidence on the impact of corporate strategic positioning on EID behaviors. Moreover, the study employs a textual analysis approach to measure corporate strategy and EID, which is a relatively new research method in this field.

Theoretically, the turnover of local environmental protection directors may not only make the environmental policy stricter and promote corporate environmental information disclosure, but also cause the environmental policy to be broken and inhibit corporate environmental information disclosure. To this end, based on the research perspective of environmental policy uncertainty, this paper selects heavily polluting enterprises in China’s Shanghai and Shenzhen Stock Exchange A-share from 2009 to 2017 as the research object, and examines the impact of the turnover in local environmental protection directors on corporate environmental information disclosure. The study finds that the turnover in local environmental protection directors has a significant positive impact on corporate environmental information disclosure, and the positive impact is not significantly different between state-owned enterprises and private enterprises, but the positive impact is declining over time. After cross-sectional analysis, it is found that the above-mentioned positive impact is mainly manifested in companies with low levels of marketization, close regulatory distance and poor environmental performance. In other words, when the marketization level is low, the positive impact is more significant, showing that the promotion can effectively compensate for the lack of the market mechanism; when the regulatory distance is long, the positive impact is significantly reduced, indicating that the promotion has a “distance attenuation effect”; when the environmental performance is poor, the positive impact is more significant, indicating that this promotion effect is stronger for companies of poor environmental performance. After examining the influence mechanism, it is found that the influence mechanism has heterogeneity of property rights, that is, the turnover of local environmental protection directors promotes the environmental information disclosure of private enterprises by increasing the intensity of environmental regulations and environmental subsidies, but promotes the environmental information disclosure of state-owned enterprises only by improving the intensity of environmental regulations. The conclusions expand the research on the driving factors of corporate environmental information disclosure from the perspective of the turnover of local environmental protection directors, and provide useful enlightenment for the relevant government departments to urge enterprises to assume the main responsibility of environmental governance.

This study explores the impact of CEO ability on corporate environmental sustainability information disclosure. We take samples from Chinese A‐share listed companies from 2010 to 2019 and use the ordinary least squares as a baseline regression model to check the relationship between CEO ability and corporate environmental sustainability information disclosure. Our findings are robust to different corporate environmental sustainability information disclosure measures and CEO ability. We found a positive association between CEO ability and corporate environmental sustainability information disclosure; thus, firms with a more able CEO are more likely to disclose more corporate environmental sustainability information. Our results also found a significant negative interaction coefficient between CEO ability and CEO career concerns. As the CEO grows older, his/her ability decreases; therefore, corporate environmental sustainability information disclosure reduces. Furthermore, we document that a female CEO strengthens the relationship between CEO ability and corporate environmental sustainability information disclosure. The study results are important for understanding corporate environmental responsibility development and implementation, particularly in China.

Low-carbon development is an important area that must be focused on in order to cope with climate change. Based on the institutional theory, this paper uses a sample of Chinese A-share listed firms from 2008 to 2021 and constructs a difference-in-differences model to examine the impact of low-carbon city pilot policy on corporate environmental and social responsibility information disclosure. The results show that the implementation of low-carbon city pilot policy in a region where companies are located significantly promotes corporate environmental and social responsibility information disclosure, and the degree of digital transformation of enterprises in the pilot region has a moderating effect on it. The mechanism analysis reveals that the policy promotes the corporate environmental and social responsibility information disclosure primarily by enhancing the environmental performance and increasing media attention, and heterogeneity analysis shows that when the enterprise has green investors or belongs to an industry with low carbon emissions, the policy has a more significant impact. Additionally, the study finds that the low-carbon city pilot policy has a positive impact on the quality of corporate environmental information disclosure. In terms of the goals of Carbon Peaking and Carbon Neutrality, this study provides new evidence on how low-carbon city pilot policy influences corporate environmental and social responsibility, offering valuable insights for advancing the country’s low-carbon development agenda.

The construction of ecological civilization is a major strategy in China. Under the background of national strategy, how to deal with the deteriorating ecological environment has become a problem that the whole society needs to solve urgently. As an economic entity that consumes natural resources and discharges pollutants, enterprises should be the backbone of assuming social responsibility and fulfilling environmental protection obligations. Therefore, corporate environmental information disclosure has become a topical issue in theoretical research. Previous studies have shown that managers' personal characteristics and external institutional pressures are important factors that affect the level of corporate environmental information disclosure, but the lack of inspection of management capability that reflected in the overall quality of managers will have an impact on corporate environmental information disclosure. In order to deeply discuss the relevance of management capability and corporate environmental information disclosure quality, the paper is based on the upper echelon theory, reputation theory and legitimacy theory, collected environmental data from the social responsibility report of 340 listed companies in heavy pollution industry in Shanghai and Shenzhen stock markets from 2011 to 2016. By establishing environmental information disclosure index to measure the company's environmental information disclosure quality and DEA-Tobit model to measure management capability to conduct empirical research, the result shows that the management capability is positively correlated with the quality of corporate environmental information disclosure. Then by distinguishing between state-owned enterprises and private enterprises, it finds that the management capability of state-owned enterprises can play a greater role to reveal better environmental information. Furthermore, the paper takes the informal system as breakthrough point, brings forward power distance that based on the Chinese traditional cultural context as a moderator variable, and focuses on the core dual-body structure between chairman of the board and general manager. The research result shows that the power distance would play a regulatory role in the correlation between management capability and the quality of corporate environmental information disclosure. When the power distance between chairman of the board and general manager is higher, it significantly inhibits management capability to improve the quality of corporate environmental information disclosure. It reveals that China's peculiar unity of command phenomenon makes the top leader’s power too concentrated, which is detrimental to the sustainable development of the company. At the same time, the degree of marketization in various regions in China is not balanced. It is valuable to explore the marketization process's role in regulating the relationship between management capability and corporate environmental information disclosure. The research result shows that under the situation of rapid marketization, the positive effect of management capability on the quality of corporate environmental information disclosure is more obvious. Through the study of the correlation between internal and external factors on management capability and environmental information disclosure, the paper puts forward relevant countermeasures from three aspects of the company, the government, and the market, in order to encourage and restrain companies to voluntarily perform environmental responsibility, regulate the environmental information disclosure behavior, improve the quality of environmental information disclosure, and jointly build a green and low-carbon society.

For a greener society, good corporate environmental information disclosure is crucial. This study empirically examines the influence of media attention and state-owned equity, and their interaction on corporate environmental information disclosure by A-share heavily polluting firms in the Shanghai and Shenzhen stock markets from 2015 to 2019. The results show that state-owned equity can improve the level of corporate environmental information disclosure; however, it mainly affects financial environmental information disclosure. Media attention also improves the level of corporate environmental information disclosure, but only for non-financial environmental information. Moreover, media attention and state-owned equity have a certain substitution effect on environmental information disclosure: a higher state-owned equity ratio weakens the positive effect of media attention on environmental information disclosure. To improve environmental information disclosure, the government must clarify disclosure standards to improve the comparability of environmental information. In addition, media and shareholders can fully leverage their external and internal supervisory roles to promote the environmental responsibilities of firms. Our findings can be useful for further promoting corporate environmental information disclosure and developing relevant policies.

Compared with developed countries, emerging economy countries are facing more severe environmental challenges. Therefore, effective disclosure of corporate environmental information is an important concern for emerging economies to cope with environmental issues. There is a growing volume of literature documenting that analyst site visits can urge corporations to provide high-quality financial information to investors. However, whether analyst site visits can also improve the quality of environmental information is still unclear. In the Chinese setting, where environmental information has attracted much attention, we explore the interaction between analyst site visits and environmental information disclosure. With three regression methods of the ordinary least squares model, two-stage least square model, and difference-in-difference model, we establish regressions to verify the relationships between them by using empirical data from 2012 to 2019 in China. The results show that analyst site visits are significantly positively correlated with corporate environmental information disclosure. This positive relation is more pronounced when corporations are in economically developed and highly market-oriented areas, in poor air quality areas, and for corporations with good, reasonable internal governance. In addition, we find that analyst site visits affect the quality of environmental information disclosure through the intermediary effect of media attention. In the robustness test, further evidence also indicates that the interaction between analyst site visits and corporate environmental information disclosure was more significant before the COVID-19 lockdown policy was implemented in Wuhan. Our findings suggest that governments should provide support for analysts to conduct site visits and formulate regulations on mandatory disclosure of environmental information by different regions as soon as possible.

Since 2008, government agencies such as the Shanghai Stock Exchange and the Ministry of Environmental Protection in China have issued a series of policies to encourage and guide Chinese enterprises to carry out environmental information disclosure. With regulation strictness, more and more enterprises start to pay attention to the impacts of their own production and operation on the environment, and disclose environmental information to demonstrate their environmental compliance. Environmental information becomes an important source for corporate idiosyncratic information, not only reflecting enterprise environmental risk & transmitting business signal, but also affecting enterprise financing and valuation estimation. Investors could use the environmental information to assist in investment decisions. As a representative of emerging markets, the volatility of the Chinese stock market is greatly impacted by the noise, and the research conclusions on stock price synchronicity are not consistent. The existing information efficiency view” holds that corporate idiosyncratic information is the main factor leading to high-degree individual volatility, while a noise-based view” argues that noise and irrational factors are the main causes of individual fluctuations. Therefore, it is valuable to explore whether environmental information disclosure can help reduce uncertainty on firm’s development and improve stock price synchronicity. This paper uses a sample of Chinese A-shared listed firms in the environmental sensitive indu-stries between 2011 and 2015 to investigate the relationship between environmental information disclosure and stock price synchronicity, and the role of analyst attention in moderating the relationship in the Chinese stock market. The results suggest as follows: firstly, environmental information disclosure of listed firms, no matter it covers significance, quantitative or timing issues, is positively correlated with stock price synchronicity; secondly, corporate environmental information disclosure would not usually draw extra attention from analysts; thirdly, analysts would help to interpret environmental information disclosed by companies, which mitigate the correlations between environmental information disclosure and stock price synchronicity. Therefore, when the noise is the main driving factor for stock price synchronicity, environmental information disclosure would help to reduce the uncertainty about firms’ future development, playing a role in reducing noises. All those findings have contributed new and more direct evidence to the understanding of environmental information efficiency in Chinese stock market.

China has entered a new stage of high-quality economic development, which puts forward in-depth requirements for environmental protection. Companies in heavily polluting industries are required to disclose environmental information. Fulfilling environmental responsibilities and disclosing this information may be either a responsible moral act or an opportunistic act. Taking listed companies in China’s heavily polluting industries from 2009 to 2020 as a sample, this study examines the economic consequences of enterprise environmental information disclosure (EID) from the earnings management (EM) perspective, as an external representation of ‘ethical behaviour’ and ‘opportunism motivations’ of EID and considers the effects of internal management competency and operating environment volatility. Findings include: (1) EID can restrain EM and support the ‘ethical behaviour’ motivation of EID. (2) Compared with the ‘soft disclosure’ of environmental information, the effect of ‘hard disclosure’ on EM is more obvious. (3) Greater management competency can strengthen the EM governance role of EID, while greater environmental uncertainty weakens this mechanism. (4) EID in enterprises in a mature period, state-owned, western regions, or low public environmental concern areas show an inhibitory effect on EM. Furthermore, its moralistic tendencies are more obvious compared with enterprises in growth or recession periods, non-state-owned, eastern regions, and those with high public environmental concerns.

IntroductionEnvironmental information disclosure is an important means to protect the ecological environment, and global climate change puts forward higher requirements for corporate environmental information disclosure. New energy companies play an important role in addressing climate change and environmental information disclosure, and should strengthen environmental information disclosure and actively participate in ecological environmental protection.MethodsThis paper selected Chinese new energy listed companies as the research sample to investigate the impact of green credit on corporate environmental information disclosure, and proposed and empirically tested the hypothesis on the mechanism of the effect of green credit on environmental information disclosure.ResultsThe regression results indicated that green credit can effectively improve the quality of corporate environmental information disclosure, and this conclusion is still significantly valid after robustness test; The impact mechanism tests showed that green credit can change the level of corporate environmental information disclosure by controlling company size. This paper also tested the heterogeneity and adjustment effects, showing that the relationship between green credit and environmental information disclosure are affected by multiple factors.DiscussionsCombining the research of this paper and previous research results, it is found that the positive impact of green credit on corporate environmental information disclosure has been confirmed by academic research and practical verification. However, the implementation effect of green credit policy will be affected by the economic level, regional differences, and the comprehensive impact from companies, financial institutions and government departments.

Air pollution and environmental information disclosure: An empirical study based on heavy polluting industries

Corporate environmental disclosure policy is a system tool to solve the environmental information asymmetry problem, it has an extremely important significance to improve public participation in environmental activities, and promote the improvement of corporate environmental performance. However, there is less literature about the direct corporate environmental information disclosure policy, and these studies are mostly qualitative or small sample studies, reliability is low. In this paper, all the listed companies of A shares heavily polluting industries are studied as a large sample to research the health of corporate environmental information disclosure system, in order to find out that the system operation runs low performance, the quality of environmental information disclosure is not good enough, revealing the main reason lies in the system is unreasonable design, the poor independence of the regulatory authorities, and then, put forward some specific proposals. Objective: To investigate the practice of corporate environmental information disclosure policy, reveal its cause. Results: around seventy percent of heavily polluting industries listed companies have disclosed environmental information; the disclosure of the information mostly described in text or data; majority of environmental information disclosed in the Report of the Board of Directors or Accounting Statements; the disclosure of the mainly contents of environmental management and environmental governance; large gap between inter-industry enterprises in the quality and quantity of environmental information disclosure. Research limitations and significance of research: This article examines only the data of corporate environmental disclosure policy operation of 2010, is a cross-sectional study. Follow-up longitudinal studies should be carried out to study the changes in corporate environmental disclosure before and after the implementation of the policy, empirical test whether the policy has a substantial impact on corporate environmental disclosure. Practical significance: this article summarizes the problems of corporate environmental disclosure, reveals its cause, and puts forward a reasonable proposal, which has an important reference value for government decision-making. Innovation and value: select all the listed companies of heavily polluting industries of 2010 as study sample firstly, to reflect the most important aspects of corporate environmental information disclosure policy runs.

PurposeThe purpose of this study is to investigate whether and how policy uncertainty affect corporate environmental information disclosure.Design/methodology/approachThis study conducts a difference-in-difference estimation and systematically investigates the relationship between policy uncertainty and corporate environmental information disclosure. The baseline regression results are robust to a series of robustness and endogeneity tests.FindingsThe authors show that firms located in cities with stronger policy uncertainty disclose less information on environmental issues. Furthermore, this negative relationship is stronger in the Midwest and in pre-industrial regions and for stated-owned firms and firms in highly polluting industries.Practical implicationsThis study argues that policy uncertainty reduce the corporate disclosure of environmental information. Therefore, the results provide evidence on how to better emphasize the importance of green gross domestic product in the performance appraisal system for officials.Social implicationsThis study confirms that corporate environmental disclosure is a response to public pressure. The results encourage the government and the public to increase corporate awareness of environmental protection.Originality/valueThis study contributes to the literature in the following ways. First, the authors provide a new perspective to study the relationship between policy uncertainty and corporate finance. Second, it contributes to the literature on corporate environmental information disclosure by linking policy uncertainty with firms’ disclosure of environmental information. Third, this study is a serious attempt to solve the problem of endogeneity between policy uncertainty and corporate environmental information disclosure.