Environmental disclosures according to ESRS in ESG reporting of selected banks in Poland

ABSTRACTAs pollution emitters and energy users, firms are important causes of environmental problems, making it increasingly vital for them to strengthen their environmental management and information disclosure policies. However, firms doubt whether it pays to be green and whether it is worthwhile to disclose their environmental information, and there are hot debates on these questions in the literature. This paper analyzes the relationships among corporate environmental performance, environmental information disclosure, and financial performance in China, which witnessed rapid growth at the price of environmental degradation. With 950 observations from 475 Chinese listed companies between 2013 and 2014, we find a U-shaped nonlinear relationship between corporate environmental performance and environmental disclosure, an insignificant relationship between environmental performance and financial performance, and a negative relationship between environmental disclosure and financial performance, which is different from most findings in developed countries. The aforementioned results imply that Chinese firms have few motivations to disclose environmental information or improve environmental performance; therefore, mandatory disclosure of environmental information is necessary, and proper environmental policy should be made to punish environmental violations and encourage better environmental performance.

PurposeIn recent years, firms tend to direct their attention in communicating their environmental actions with their stakeholders. However, the level of environmental disclosers varies significantly among firms. This paper aims to explain the variation in environmental disclosure of firms based on their ownership type, namely – state ownership and institutional ownership. The study further aims to understand whether and how the relationship between ownership structure and environmental disclosure changes regarding countries’ development levels.Design/methodology/approachThis paper uses a sample of 27,847 firm-year observations from 72 countries/economic districts between the years 2002 and 2017 and regression analysis to test how the relationship between different ownership structures and environmental disclosure and whether this relation is conditional on countries’ development levels.FindingsThis study finds that firms with higher state ownership have higher environmental disclosures and higher institutional ownership has a negative effect on environmental disclosures. Furthermore, this paper also documents that firms with higher state ownership and operating in developed countries have incrementally higher environmental disclosure, relative to firms operating in developing countries.Research limitations/implicationsThe study has limitations that would provide possible starting points for further research. The first limitation is related to the environmental disclosure measure, which reflects the level of environmental disclosure of firms based on their disclosure information given in the Thomson Reuters, Asset4 database. A more refined measure can be constructed using hand-collected data based on linguistic analysis, which may reflect not only the level of the disclosure but also the quality of the environmental disclosure. The second limitation is the limited focus of the study toward state and institutional shareholding. Therefore, future research may consider examining the different types of ownership such as family ownership.Practical implicationsThe findings of the study may help policymakers and regulators to consider the potential impact of various ownership types on environmental disclosures. Also, given the impact of countries’ development levels, regulators should consider that a one-size-fits-all is not applicable in environmental disclosures. Therefore, each country should consider the institutional dynamics of their operating environment to set appropriate regulations to enhance environmental disclosures.Social implicationsFrom a social perspective, the findings indicate that firms’ stakeholder engagement via environmental disclosures depends on the type of the controlling shareholders.Originality/valueThis study contributes to the literature by developing a new construct for environmental disclosure based on Biodiversity, Climate Change, Environmental Investments and Spill Impact Reduction performance measures. Further, grounding on legitimacy and stakeholder theories, this study shows the influence of ownership type on environmental disclosures and how this effect changes in accordance with the countries’ development.

In recent years, the international community has become ever more concerned with the effect of human activity on the environment which can be observed and regulated through international policy. An underlying premise suggests that the natural environment should serve the interests of the current generations without jeopardising those of future generations. As a result, the disclosure of environmental issues has become the topic of many studies, and there has been much debate over the disclosure of environmental information by companies. However, little research has been conducted in developing countries regarding the amount and kind of corporate environmental disclosure (CED) within annual reports and its development over time, as well as the effect of external and internal factors on the environmental disclosure.The main aim of this study is to explore current disclosure of environmental issues carried out by Libyan construction companies in order to explain the presence or the absence of CED practices in light of stakeholder and political economy theory. In doing so, a content analysis of the annual reports is made in order to describe CED practices undertaken by the largest Libyan construction companies. In addition, the perspectives and perceptions of a sample of financial managers and the users of the annual reports of Libyan construction companies regarding the various aspects of CED have been explored by conducting semi-structured interviews and administration of questionnaires.Although financial managers are positively inclined toward environmental performance and disclosure by the companies, the results of the study revealed that the level of environmental disclosure in Libyan construction companies was very low. Based on the views of the financial managers, this is due to a number of reasons that have prevented them adopting CED. The most prominent of these are an absence of environmental awareness, lack of demand for environmental information and a dearth of academic research. Similarly, managerial perspectives reveal that the absence of environmental disclosure is mainly due to lack of civil society organizations and the avoidance of any accountability to the public or government. In addition, a deeper viewpoint was provided by the users of annual reports, when they indicated that the social, political and economic features of the Libyan society does not encourage or facilitate environmental disclosure initiatives. However, the teachings of the Islamic religion may encourage companies to disclose the damage to the environment, according to the viewpoint of the majority of the participants. Furthermore, the results of study are consistent with managerial branch of stakeholders theory and the bourgeois political economy theory providing a robust explanation for the absence and the presence of environmental disclosure of Libyan construction companies. Thus, it can be concluded that the CED practices of the Libyan construction industry are influenced by internal factors (management attitude and cognition) and external factors including, local culture, accounting education, the economic and political system, and the legal system.

An understanding of disclosure themes used in annual reports can provide a foundation for improving communication of environmental information. The objective of this study is to provide insight into environmental disclosure themes that are used to provide management communication in the financial and non-financial sections of corporate annual reports. The study also explores the relationship between these disclosure themes and environmental performance. Findings from a sample of 53 U.S. companies in four major industry groups suggest that environmental disclosures in the financial section of annual reports contain information focused on expenditures and contingencies. Environmental disclosures in the non-financial section of the annual report mostly contain information about pollution abatement and various other environmental data. The highest perceived quality of disclosure is associated with environmental expenditures and contingencies. Other environmental information and pollution abatement disclosures appear to be of lower quality. These findings support previous studies showing that there is little relationship between environmental disclosures and environmental performance.

Purpose This paper aims to examine the effect of ownership structure variables on social and environmental disclosure practice in Nigeria. The paper also investigates the moderating impact of intellectual capital disclosure on the relationship between ownership structure elements, social and environmental disclosure. Design/methodology/approach The paper adopted the Global Reporting Initiative (GRI) disclosure framework to extract social and environmental disclosure information from corporate social and environmental reports of 80 companies listed on the Nigerian Stock Exchange. The study spanned from 2012–2017. Management ownership, foreign ownership, block ownership and dispersed ownership are considered as determinants of social and environmental disclosure. A multiple regression analysis was used to test the relationships specified in the study. Findings The result of the descriptive analysis has shown evidence of a low-level disclosure of social and environmental information in corporate reports (annual reports and corporate social and environmental reports) of companies. From the regression analysis, block ownership, foreign ownership and dispersed ownership are found to enhance the disclosure of social and environmental information in the corporate report of companies. However, management ownership was found to be insignificantly related to social and environmental disclosure. The result also revealed that intellectual capital disclosure has a significant positive effect on the relationship between management ownership, foreign ownership and dispersed ownership, social and environmental disclosure. However, intellectual capital disclosure does not moderate the relationship between block ownership, social and environmental disclosure. Originality/value This paper is the first to empirically examine the moderating effect of intellectual capital disclosure on ownership structure variables, social and environmental disclosure. The result of the study offer researchers a better understanding of the impact of ownership structure variables on social and environmental disclosure. The findings are useful to researchers, corporate managers, policymakers and regulatory bodies.

As one of the ways for multinational companies to obtain the advantages of sustainable development, corporate social responsibility (CSR) has been widely recognized by the academic community. Research featuring the influence of corporate governance (CG) on the environmental information disclosure of multinational corporations (MNCs) have gained much attention, but there is a lack of research into the empirical examination of cross-national samples. Drawing on Agency Theory, this study fills the gap by making a theoretical exploration and empirical test on relationships between CG and MNCs’s environmental disclosure. Board independence, board size, board meeting frequency and their relationships to the environmental disclosure of MNCs are observed in this study. In order to examine the aforementioned relationships, this study incorporates measurement techniques used by Van Staden and Hooks (2007) [1] and Global Reporting Initiative 4.0 guideline (GRI4.0) and develops a set of comprehensive, systematic measurement standards to appraise the environmental information disclosure of corporations. The content analysis method is used to assess the environmental disclosure of 151 companies from China, the United States, Japan, and the United Kingdom, according to Forbes Global 2000 Ranking in 2019. We find that board independence, the board size, and the frequency of board meetings are all positively associated with the environmental disclosure of MNCs. This finding indicates that more independent boards of directors, larger boards, and more frequent board meetings are CG mechanisms which lower the likelihood for an opportunistic behaviour and increase information transparency and voluntary implementation of the disclosure, effectively enhancing the environmental disclosure of MNCs. This impact of CG on corporations’ environmental information disclosure exists across country contexts.

The link between environmental performance and environmental disclosure is not clear, and previous studies in the U.S. and Canada have found mixed relationships. This study researched the disclosure behaviour of 53 Australian listed companies. Quantitative and qualitative research approaches were employed to provide explanations of the relationship between environmental performance and disclosure as the disclosure of environmental information still remains largely voluntary in Australia. Firms have the discretion to disclose additional information, which also gives them flexibility to determine the breadth and depth of their environmental reporting in the non-regulated sections of their annual report, and in other mediums such as environmental reports, sustainability reports and their websites. The quantitative relationship between environmental performance and disclosure was examined first, followed by interviews with company representatives and a review of each company's publicly available documents relating to environmental performance and disclosure. The findings from the quantitative component of the study revealed that environmental performance, measured by emissions divided by sales and Corporate Monitor environmental ratings, has no statistically significant association with environmental disclosure. In addition, the study also found that levels of environmental disclosure were generally low, and there was greater reliance on the use of soft or un-verifiable types of environmental disclosure than on hard or verifiable information. However, industry classifications, company size and capital intensity were found to affect the level of environmental disclosure. Firms may disclose environmental information if they belong to high polluting industries, are large and have outlayed considerable capital expenditure,as has been suggested by voluntary disclosure theory. However, disclosing firms were not found to receive perceived financial benefits such as lower cost of capital (equity), increased share price, better future financial performance, or lower cost of debts. This may suggest either that the financial market in Australia does not value environmental information in the same way that it values financial information, or that firms do not receive significant pressure from the financial market to disclose. Environmental disclosure may thus be limited as firms see the perceived costs as higher than the perceived financial benefits. Further, the findings from the qualitative study highlighted the different drivers of environmental disclosure across four groups, based on perceptual mapping of environmental performance and environmental disclosure. The study found that the high level of environmental disclosure for Greenwashing (poor performance and high disclosure) and Green Companies (good performance and high disclosure) was influenced by the demand of financial markets. In addition, for Green Companies, customers appear to have also demanded more transparency over firms' environmental practices. The low level of environmental disclosure for the Silent Con-panies (poor performance and low disclosure) and Silent Achiever (good performance and low disclosure) groups may have been caused by low demand from their stakeholder base. Stakeholder theory is able to explain the environmental disclosure phenomena in Australia where firms tend to react to stakeholder groups' demands for environmental information. Disclosure can then be seen as a function of stakeholders' demands or pressures, and in the absence of such demand firms may disclose little or stay silent. This may suggest that they use disclosure practices as a public relations tool to satisfy stakeholder needs for information. The low level of environmental disclosure across the sample companies shows that Australian businesses do not appear to believe there is a strong business case to disclose environmental information. The study also revealed that the previous, largely voluntary, requirements for environmental disclosure enabled Australian businesses to disclose environmental information selectively, and this may not necessarily reflect their actual environmental performance. As a consequence, the users of these firms' environmental information may need to interpret the information carefully. The findings of this study also suggest regulators should avoid using a one size fits approach. By understanding the drivers of disclosure, regulators can design regulations which cover all possible behaviours within the environmental performance and environmental disclosure relationship. Regulators may also need to endorse the development of an environmental reporting standard and mandatory audited environmental disclosure for Australian listed firms.

Purpose To determine whether to entrust the European Union (EU) to create a new nonfinancial reporting framework or endorse the extant reporting framework developed by the Global Reporting Initiative (GRI), this study aims to explore whether the mandatory implementation of the EU Directive positively impacted the GRI-based environmental disclosure. Design/methodology/approach The authors compared the pre- and post-EU Directive environmental disclosure of 16 Italian environmentally sensitive companies. The authors used an extended coding scheme and developed a unique scoring system to compare the quantitative and qualitative changes in environmental disclosure. Findings The analysis showed that the quantity of environmental disclosure increased after the mandatory EU Directive adoption. The most significant change was observed regarding the disclosure topics explicitly required by the Italian legislature. Additionally, disclosure of soft information continued to prevail over that of hard information in the post-Directive period. While the Directive boosted the level of adherence to GRI standards, Italian companies disclosed information that could be easily mimicked (soft) instead of objective measures that could be verified (hard). In light of this evidence, the endorsement of extant GRI standards could be a valuable option for enhancing the comparability and transparency of environmental disclosure. Originality/value This study used an original extended coding system and proposed related environmental disclosure indexes that allow monitoring changes in environmental disclosure over time. To the authors’ best knowledge, this study is one of the few that justifies the significant impact of regulation (here the EU Directive) on the increase in environmental disclosure and that uses hard and soft information typology to examine the quality of environmental disclosure.

Environmental information disclosure is gradually gaining popularity, especially under the severe environmental pollution. Analyzing the relations among environmental information disclosure (EID), corporate governance and economic performance by employing a cross-disciplinary and a cross-sectional approach is a new start for improving environmental disclosure. The Ordinary Least Square results suggest that, firstly, firm size and ownership structure have significant positive relations with EID and economic performance. Secondly, the factors of corporate governance including the equity concentration ratio, logarithm of management incentive, logarithm of management shareholding, the board size and the number of directors, all have positive influences on EID. Thirdly, corporate governance has an impact on firm’s economic performance. Lastly, this study reveals that EID positively affects firm’s financial performance—solvency, operational capability and profitability. It is expected that this study can highlight the importance of environmental awareness of professional genre and enhance the environmental disclosure.

The concept of sustainable development has been gaining importance and increasing society's awareness of the need to stop climate change, inequality, social exclusion, and inappropriate corporate practices. Banks increasingly integrate ESG objectives into their business activity. However, it is associated with their exposure to a new type of risk – the ESG risk. ESG risk management for banking institutions has now become not only a fashion and trend but an obligation that they have to fulfil. The main aim of the article is to identify ESG risk and methods of quantification, as well as to assess the exposure to ESG risk of commercial banks in Poland. That’s why the paper presents an in-depth literature review in the field of ESG concept and ESG risk in banks. Then, it describes the adopted methodology of the empirical research. The third section covers a presentation of the obtained results, which include the analysis of ESG risk exposure of the largest banks in the world and selected commercial banks in Poland, mainly based on the volume of the carbon footprint they generate and finally, ESG risk ratings for Polish banks. The following research methods were used in the article: literature studies, case study analysis, observation methods and synthesis methods. The empirical research that was conducted allowed the verification of the research hypothesis, stating that commercial banks in Poland are aware of the need to measure and monitor ESG risk increases. The research indicated that some of the banks in Poland are at an advanced stage of ESG risk management, while the rest of them are just starting their activities in this area. Currently, banks' involvement in ESG issues globally is one of the leading market trends. It becomes not only an option but an imperative for institutions wishing to maintain their market position. Therefore, commercial banks in Poland can and should participate in the implementation of sustainable development assumptions in the coming years.

Purpose– This study aims to verify the presence, evolution and determinants of voluntary environmental disclosure from companies listed on the Milan Stock Exchange. The authors examined documentation of listed firms from 2006 and 2009. These years immediately precede and follow Italian legislative decree n. 32/2007, which introduced (albeit on a voluntary basis) disclosure of environment-related company information.Design/methodology/approach– The authors’ approach utilizes multivariate regression analysis. The disclosure index of the years 2006 and 2009 represents the dependent variable. Independent variables include firm size, business industry, public shareholders, legislation and environmental performance.Findings– The results show positive effects on environmental disclosure related to legislative decree n. 32, the presence of government shareholdings in firms’ ownership structure, business industry and firm size. The interrelation between firm size and environmental performance shows that large companies give more information only if they produce more environmental pollution, to legitimize themselves to stakeholders.Research limitations/implications– Despite the authors’ contributions concerning environmental information described in the Introduction, they must express two limitations of their analysis. First, the sample analyzed is quite small (only 44 firms). Second, carbon dioxide emissions was chosen as an indicator of atmospheric pollution, yet emissions information has not been provided by Italian firms (even those that are listed on the Milan Stock Exchange), despite being accepted internationally as a measure of environmental performance in business. In addition, in Italy, there is no database ranking firms on corporate social responsibility (CSR).Practical implications– There are many reasons behind the weak or even negative roles of managers regarding social and environmental disclosure. These reasons include a dearth of resources, the profit imperative, lack of legal requirements, insufficient knowledge or awareness, poor performance and fear of bad publicity. What seems to be a real obstacle is the lack of knowledge about non-financial disclosure – in particular, how to gauge, produce and release information when it comes to a firm’s interaction with environment and society, and this void causes low levels of disclosure and even the absence of such action. Some of the reasons for non-disclosure might be attributed to a lack of awareness and knowledge among corporate managers regarding CSR reporting, in general, and disclosure on eco-justice issues, in particular.Originality/value– The first contribution of this work is to realize, for the first time, a specific analysis on Italian firms’ environmental disclosures. Moreover, the study extends this analysis to all entities’ informative documents. This paper also allows an examination of effects of new legislation that encourages environmental information in a corporation’s financial annual report. Finally, this is the first paper to conduct quantitative analysis on firms in the Italian financial market concerning environmental disclosure, as well as regression analysis to identify determinants of firms’ disclosure.

Most prior research on corporate social responsibility (CSR) disclosure considers environmental and social components as additive or complementary. In this paper, we extend the existing literature on CSR by investigating the substitution effect of social disclosure and environmental disclosure in reducing information asymmetry between managers and investors. We also attempt to study the association between different environmental disclosure sources and information asymmetry. Environmental disclosure comes from three complementary sources: paper-based annual/environmental report, web page and press releases. Our results suggest that social disclosure and paper-based environmental disclosure substitute each other in reducing stock market asymmetry. We also show that environmental information communicated on the web page or by press releases does not affect information asymmetry when we consider social disclosure. These observations suggest that future research in CSR disclosure might fruitfully distinguish between social and environmental disclosure as well as communication devices. Moreover, as expected, we observe that environmental performance is negatively associated with environmental disclosure. Our results also show that environmental news exposure and firm size are key drivers of environmental disclosure.

The purpose of this study is to identify the factors that influence environmental disclosure. The study population is 156 companies consisted of companies in the agricultural sector, the consumer goods industry sector, and the basic & chemical industry sector which were listed on the Indonesia Stock Exchange and participated in PROPER 2014-2018. The purposive sampling method was used to determine the research sample in order to obtain 26 company samples or 130 units of analysis. The analysis technique in this study uses multiple linear regression analysis. The results of this study indicate that the level of environmental disclosure in the three corporate sectors in Indonesia is classified as low, due to the absence of standard guidelines for conducting environmental disclosure, so it is still voluntary. The results also show that the variables of board commissioners’ size, size of the audit committee, environmental certification, profitability, and company size have a significant positive effect on environmental disclosure, while leverage has no effect on environmental disclosure. With the low level of corporate environmental disclosure in Indonesia, it is hoped that the government can establish standard, precise, and mandatory guidelines so that companies can further increase information regarding environmental disclosure.

Editorial

The enterprise's environmental disclosure mainly includes the disclosure of environmental protection, pollution prevention and cleanup, resource utilization and other financial or nonfinancial information concerning the environment. Its basic content includes the information of the environmental financial performance, the environmental qualitative performance and the main environmental accounting policy of the enterprise. The environmental financial performance disclosure can make use of balance sheet, income statement, cash flow statement and other major statements which are ruled by current financial system. The environmental qualitative performance can be disclosed by the existing disclosure tools or by compiling separate environmental qualitative performance report. The main environmental accounting policy can be disclosed by the enterprise's accounting statements through diagram or literal representation by convention.