Abstract
The environmental activities conducted by companies have been scrutinised by the public due to the huge environmental problems faced by many people across the world. These activities are corporate social activities included in the corporate social responsibility (CSR) framework by Bursa Malaysia that informs the public regarding the social and environmental activities implemented by Malaysian companies. Data from 353 companies of various types in Malaysia revealed that the information about effective usage of energy and resources is the most disclosed item by Malaysian companies, followed by the waste management and disposal, and reusing and recycling information. The least disclosed item by Malaysian companies is prevention and reparation program. In addition, the regression results showed that the higher proportion of non-executive directors could increase the disclosure of environmental information. The results prove that the non-executive directors have played their role to increase the companies’ legitimacy by encouraging the management of companies to provide more environmental information. Hence, this study provides significant contribution for the supervisory bodies and policy makers in developing guidelines for Malaysian companies concerning environmental issues through environmental disclosures in their annual reports.
Highlights
Since the past three decades, environmental issues such as increasing damage caused by pollution and depletion of resources have raised the attention of the public
This study attempts to examine the current practices of environmental disclosure by Malaysian listed companies
The content analysis of annual reports of 353 companies from various industries in Malaysia shows that most of them disclose some forms of environmental information in their annual report for the year 2016
Summary
Since the past three decades, environmental issues such as increasing damage caused by pollution and depletion of resources have raised the attention of the public. Some studies find that disclosures of social and environmental information have been increased and related to certain internal and external companies’ attributes (Trotmen, 1979; Gray, Kouhy & Lavers, 1995; Hacktson & Milne, 1996; Halme & Huse, 1997; Cormier & Magnan, 1999; Mobus, 2005; Moerman & Laan, 2005; Salama, Dixon & Habbash, 2012; Rupley, Brown & Marshall, 2012) Most of these studies focus on the experience of companies in developed countries, mainly in Europe and United States. This study examines whether corporate governance variable (i.e., board of director characteristics) could influence the quality of environmental disclosure in their annual reports
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