Environmental Disclosure Practices Research Articles

A Slight Look Environmental Disclosure Score Trends during Covid-19 Outbreak: What’s Driver the Environmental Disclosure in Indonesian Mining and Manufacturing Companies

Amid growing environmental challenges and economic development in developing countries, companies must adopt robust environmental disclosure practices to fulfil their corporate responsibility. This study examines environmental disclosure trends from 2020 to 2022 during the COVID-19 pandemic, specifically focusing on the environmentally sensitive manufacturing and mining sectors selected through purposive sampling. A total of 40 company samples, encompassing 120 units of analysis, underwent analysis involving descriptive statistics, classical assumption tests, and multiple linear regression. The research explores the connection between various variables, such as company size, age, profitability, leverage, share ownership, and audit committee composition, and their impact on environmental disclosure practices. The findings reveal a rising trend in environmental disclosure among manufacturing and mining companies during the COVID-19 and post-pandemic period, increasing from 53.2% in 2020 to 60.8% in 2022. In 2022, the energy, industrial, and health sectors saw increased environmental disclosure, while the basic materials and cyclical consumer sectors decreased. Regression analysis shows that company size, profitability, and audit committees impact environmental disclosure, while company age, leverage, and foreign ownership have no discernible influence. This research provides valuable insights into environmental disclosure in Indonesia's manufacturing and mining sectors.

Audit Committee Characteristics and Environmental Disclosure Among Nigeria Listed Non-Financial Firms

This study investigates the influence of audit committee attributes on the corporate environmental disclosure using listed non-financial firms in Nigeria as case study. The population of the study consists of all non-financial listed firms on the Nigerian Exchange Group (formerly NSE). Using purposive sampling techniques, the study selected a total 70 listed non-financial firms having required information necessary for the study between 2011 and 2020. The study employed fixed effect and feasible generalized least square (FGLS) panel regression technique. The fixed effect of FGLS regression analysis indicates that while audit committee independent and audit committee gender diversity recorded significant positive influence on the environmental disclosure among Nigerian listed non-financial firms, the impact of audit committee size and audit committee meetings were negligible. Based on results, it is not the size of the committee nor the number of their meetings that matter for the disclosure of environmental information but the composition of the committee in terms of female and independent members representation. In conclusion, the study found evidence in support of the critical role of audit committee characteristics in environmental disclosure practices among Nigerian listed non-financial firms. Hence, it is recommended that efforts should be made to encourage higher composition of female and independent members on the audit committee.

The Green Mirror: Reflecting on Sustainability Reporting Practices of Indian and Australian Real Estate Stakeholders

Within the real estate sector, the concept of sustainability has traditionally been associated with green building initiatives. This study broadens the scope by examining environmental disclosure practices across a spectrum of stakeholders, including developers, financiers, suppliers, and advisors, within the real estate sectors of Australia and India. Utilizing the Global Reporting Initiative (GRI) standards to evaluate environmental reporting, this research scrutinizes publicly disclosed company data to assess the sector’s engagement with sustainability. The findings reveal a pronounced focus on emissions and energy, with less attention to other critical factors like biodiversity, materials, and supplier environmental assessment. This selective disclosure suggests a need for a more holistic approach to sustainability reporting. This study also investigates the influence of regional nuances and the integration of international reporting standards, shedding light on the varied practices of sustainability reporting within the industry. Furthermore, this paper examines the relationship between environmental disclosures and financial performance, measured by the economic value added (EVA). It was observed that environmental disclosures do not show a significant correlation with EVA for companies in either country, indicating that current reporting practices do not directly impact financial outcomes as captured by this metric. These findings offer actionable insights for enhancing reporting practices, encouraging a collective approach to address the environmental impacts of real estate, and contributing to the discourse on responsible environmental stewardship.

Corporate environmental disclosure and sustainability governance practices among listed manufacturing firms in Nigeria

Corporate environmental disclosure and sustainability governance practices among listed manufacturing firms in Nigeria

Environmental disclosure practices in mixed ownership models: A study of Chinese private enterprises.

Environmental information disclosure is critical avenue for stakeholders to gauge the fulfillment of corporate environmental responsibilities, as well as a key path for companies to gain social reputation and achieve sustainable development. To achieve both economic and social sustainability and improve the environmental information disclosure by private firms, this study delves into the impact mechanism and realization path of mixed ownership reform on environmental information disclosure among Chinese private enterprises listed between 2010 and 2020. Utilizing a panel fixed effect model, we scrutinize the interplay between state capital involvement and the disclosure of environmental information by private enterprises. Our findings reveal that state capital involvement may encourage private enterprises to disclose environmental information through resource allocation and governance improvements. The higher the shareholding ratio of state-owned participating shareholders, the more it helps private firms to disclose environmental information. State-owned shareholders play a pivotal role in the appointment of supervisors, directors, and executives, effectively improving corporate governance mechanisms and positively moderates how private companies with state-owned capital participate in disclosing environmental information. Moreover, the magnitude of media coverage and the public opinion pressure faced by private enterprises further amplify the influence of state-owned capital involvement on environmental information disclosure. Additionally, our research reveals that corporate profitability partially interplays with the effects of state-owned capital disclosure of environmental information by private companies. According to the research results, we recommend that the government proactively promote mixed ownership reform with private enterprises as the main participants, fully leveraging the resource advantages and influence of state-owned capital. At the same time, it is imperative to strengthen the governance effect of internal state-owned shareholders and external public opinion supervision in private enterprises. Enhancing profitability is also identified as a key driver for private enterprises to engage in more robust environmental information disclosure practices.

Environmental Awareness of Enterprises through Their Disclosure Magnitude: UK and US Evidence

In the absence of a validly mandatory public policy and a meaningful conceptual framework, corporate environmental disclosure practices have been diverse (Matthews, 1993). In other words, the lack of a single generally accepted standard in which environmental reports can be developed, akin to that of financial reporting principles, is one of the reasons for this undoubted dissimilarity in environmental reporting practices. However, there are imperative requirements relating to environmental information disclosure in many developed countries, for example, environmental related information is required in the Business Review in accordance with s.417 of the Act (Great Britain. Companies Act 2006) in the UK and the US Securities and Exchange Commission (SEC) has developed rules governing disclosure of environmental liabilities, in relation to Items 101, 103, 303 and 503(c) in SEC Regulation S-K (SEC, 2008). The former is rather vague as it is not underpinned by a robust speculative structure, whereas the latter has only focussed on the disclosure of financial information that is environmentally related despite the non-financial nature of predominant environmental information. In response to these, the International Accounting Standards Board (IASB) and The International Sustainability Standards Board (ISSB) has very recently issued the foundational standards, which are IFRS S1 and IFRS S2, to steer corporate sustainability-related disclosures worldwide. The former inaugurally provide general conceptual foundations and the latter has primarily pointed on climate risks and opportunities. The other dimensions are forsaken to line up sometimes in the future. Keywords: Environmental Information Disclosure, Environmental Reporting, Disclosure Quantity, UK, US

Firm-specific characteristics and environmental disclosure of energy firms in Sub-Saharan Africa

Purpose: This study investigated the relationship between firm-specific characteristics and environmental disclosure practices of energy firms in sub-Saharan Africa. It examines how profitability, size, and liquidity influence the environmental disclosure index (EDI) of listed energy firms in the region. Research methodology: A quantitative approach was adopted, utilizing secondary data from the annual reports of energy firms listed in Nigeria, South Africa, and Kenya. Regression analysis was employed to assess the impact of firm-specific characteristics on EDI using waste management data based on the Global Reporting Initiative (GRI) 306 guidelines. Results: The findings indicated that Profitability positively affected EDI, indicating greater transparency in reporting environmental initiatives for more profitable firms. Conversely, firm size is negatively correlated with environmental disclosure, suggesting challenges for larger firms in effectively communicating their environmental efforts. However, firm liquidity did not significantly affect EDI. Limitations: One limitation of the study is its focus on energy firms in only three countries, limiting the generalizability of the findings to other sub-Saharan African nations. Contribution: This research contributes to the literature by addressing environmental disclosure practices within sub-Saharan Africa's energy sector, offering stakeholders, policymakers, and regulators insights to promote transparency and sustainability in the industry. Novelty: The novelty of this study lies in its examination of firm-specific characteristics and their influence on environmental disclosure practices in the energy sector of Sub-Saharan Africa. Using waste management data as a proxy for disclosure offers a fresh perspective on the reporting practices of energy firms in the region.

Corporate environmental disclosure in Europe: the effects of the regulatory environment

Purpose This paper aims to assess the impact of regulatory changes on corporate environmental disclosure practices in Europe. More specifically, the authors perform a difference-in-differences analysis to study the impact of the Paris agreement (United Nations Climate Change Conference, COP21) and of the French Law 2015-992 on energy transition for green growth. Design/methodology/approach The sample consists of the listed companies belonging to the Euro Stoxx 50 index, and they are analysed over the 2010–2019 time horizon by means of an expert validated environmental disclosure dictionary and difference-in-differences analysis. Findings The main results show that both regulatory interventions contributed to improving corporate environmental disclosure. The authors also show that firms belonging to the most polluting sectors tend to provide more information on environmental matters, likely in an attempt to divert stakeholders’ attention. Originality/value By analysing an under-investigated topic, the paper calls for significant efforts by regulators to find the most suitable solutions to induce firms to increase their levels of transparency on the impact of environmental risks and on how these risks are managed.

Family firm status and environmental disclosure: The moderating effect of board gender diversity

AbstractBuilding on agency and resource‐based view theories, this study investigates the level of environmental disclosure (ED) practices of family versus non‐family firms and explores the moderating role of board gender diversity. We test our hypotheses on a 3‐year (2018–2020) panel data sample comprising 324 observations of Italian small‐ and medium‐sized enterprises traded on the Euronext Growth Milan. Findings show that, compared to non‐family firms, companies with a family firm status are characterized by lower levels of ED. Gender diversity on the board, however, moderates this relationship, reducing this gap, to the extent that the family firm status is associated with higher ED when the number of women directors is high enough to constitute a critical mass. We consequently contribute to the studies on family business, corporate governance, and corporate social responsibility.

The impact of corporate environmental disclosure practices and board attributes on sustainability: Empirical evidence from Asia and Europe

This study analyzes the impact of environmental disclosure, board attributes, and firms' specifics on the levels of environmental and ESG performance in Europe and Asia. The study utilizes secondary data from Refinitiv Eikon database for 8094 firms for the period between 2016 and 2021. The study employs panel data analysis using fixed effect models to estimate the results. The findings suggest that disclosure on emissions, innovations, environmental controversies, environmentally friendly products, proactive environmental investments, environmental expenses, and fines charged by authorities have a positive and significant influence on the level of firms’ environmental and ESG performance. Furthermore, the study identifies board tenure, independence, size, and meetings as being associated with greater levels of environmental disclosures, reporting, and sustainability score. However, board diversity is found to have a limited contribution to environmental disclosures, especially in Asian countries. Additionally, the results reveal that companies with higher revenue growth, larger size and market capitalization, and better performance have greater and better disclosure of environmental and sustainability issues. The study provides practical implications for policymakers to establish comprehensive guidelines for environmental and sustainability reporting based on the analysis of institutional, regulatory frameworks, legislation, and sustainability score enforcement status of the country.

Labor Market Institutions, Environmental Disclosure, and Environmental Impacts

ABSTRACT We examine how country-level labor market characteristics affect corporate environmental disclosure practices and the environmental impacts of firms’ operations. Using a sample of firms from 36 countries over the 2005–2016 period, we show that firms domiciled in countries with more developed labor markets have higher levels of environmental disclosure and less damaging environmental impacts than firms in countries with less developed labor markets. In addition, we find that firms operating in countries with better-developed labor markets tend to reduce their environmental impacts through the purchase of goods and services rather than through substantive changes to their own operations. Taken together, the findings suggest that better-developed country-level labor market institutions play an important role in improving firms’ environmental disclosure and in reducing their environmental impacts.

Impact of institutional ownership on environmental disclosure in Indonesian companies

PurposeThis study aims to investigate the effect of the classification of origin country of institutional shareholder (domestic, developed and developing country) and its status on stock exchange (listed and unlisted) on environmental disclosure level in Indonesian companies.Design/methodology/approachThe data set comprises 474 non-financial firms listed in Indonesian Stock Exchange (IDX) for the period of 2017 to 2019. The study uses an environmental disclosure checklist to measure the extent of environmental disclosure in companies’ reports. Panel regression analysis technique is adopted to investigate the association between total percentage of shares held by institutional shareholders based on the classification of origin country and the status in stock exchange, and the extent of environmental disclosure.FindingsThe study reveals that the extent of environmental disclosure is positively and significantly associated with institutional investors from domestic, developed countries, listed and unlisted institutional investors. Further analysis shows interesting results that institutions from developing countries have a negative and significant relationship with environmental disclosure in non-sensitive industries.Research limitations/implicationsThe authors recognize the issue of authors’ subjectivity in the measurement process of environmental disclosure. The sample for this study encompasses Indonesian listed firms. Thus, the results may not be generalized to Indonesian unlisted firms and other countries or regions.Practical implicationsThis study suggests managers to engage more with institutional shareholders because they have greater concern for environmental disclosure practices. The current study also suggests managers to make strong environmental policies as they are important to ensure that institutional shareholders’ investments are safe.Social implicationsGiven the positive impact institutional shareholders have on the level of environmental disclosure, it indirectly indicates that institutional shareholders have a strong motivation to make the world a better place.Originality/valueThis study offers in-depth insights into the effect of institutional ownership on environmental disclosure based on the classification of origin country and listing status of institutional investors.

Environmental Accounting and Disclosure: A study of Ambuja Cement Ltd.

Environmental accounting plays a crucial role in today's world due to the pressing need to address and mitigate environmental challenges. It involves incorporating environmental factors and impacts into the financial and managerial accounting processes of organizations. By quantifying and reporting the environmental costs and benefits associated with business activities, environmental accounting provides valuable insights into the true economic value and sustainability performance of companies. This information allows stakeholders, including investors, regulators, and the public, to make more informed decisions and evaluate the environmental performance of organizations. In this paper, researcher has explained theories justifying the need for environmental disclosure. Further, the researcher has carried out a descriptive study with special reference to Ambuja Cement ltd. to find out their environmental disclosure practices. It was found that Ambuja Cement ltd. is truly aware of the environmental impacts from their different activities and it displays all the quantitative information in a proper way in its yearly reports.

Environmental Disclosure Practices in Publicly Traded Companies of Bangladesh

This study strives to identify the level of corporate environmental disclosures and their relationship with various corporate attributes using secondary data sources. The data for this study were collected under the dichotomous procedure through content analysis of the annual reports of 190 companies. The statistical results depict that the practice of the Environmental Disclosure Index (EDI) is poor, with the banking sector securing the highest and the IT sector unveils the lowest EDI observed under the study. The regression model implies that company category, company nature, profit after tax, dividend nature, ISO 14001 certification, company age, capital employed, and total revenue are statistically significant. However, net assets value per share and multi-nationality are statistically insignificant. The research will provide valuable guidance to policymakers in formulating appropriate policies for safeguarding society through the protection and reduction of environmental degradation. It will improve the livability of the Earth for future generations. Additionally, it will aid the corporate sector in implementing measures to reduce environmental pollution resulting from their activities. This research investigates the intensity of environmental consciousness among corporations in Bangladesh and reveals the link between corporate attributes and environmental disclosure.

The Effect Of Industry Type, Environmental Information From External Parties, And Environmental Disclosure Toward Environmental Costs In Indonesia

The purpose of this study was to determine the effect of industry types, environmental information from external parties, and environmental disclosures toward the environmental costs in Indonesia companies. The measurement of the environmental costs was proxied by the total cost of environmental disclosures including disclosures for management approaches consisting of environmental aspects (e.g., raw materials, water, biodiversity, and waste), goods and administration, consistency, transportation, and in general the objectives that apply to the environmental point of view, strategy, hierarchical task, check and development, and many more relevant data according to GRI-G4 guidelines for sustainability reporting (Lindrianasari et al., 2020). The sample for this research was 232 companies that have fulfilled the sample criteria from 2017-2020 which are sourced from the company database on the Indonesia Stock Exchange. The research data was tested statistically using multiple regression analysis. The results of this study proved that the type of industry which was sensitive to the environment will contribute to an increase of the environmental costs by companies and there was no bias between the environmental disclosure practices in annual reports and environmental performance of companies in Indonesia. Other results showed that companies that had bad news related to the environment tended to allocate less environmental costs because if environmental damage has occurred, the company's responsibility was not only limited to recovery on environmental aspects but must resolve the impacts that occur on social and financial aspects.

Environmental Disclosure Practices and Sustainable Performance of Quoted Manufacturing Companies in Nigeria

This paper examined the linkage between environmental disclosure practices and sustainable performance with particular reference to listed manufacturing companies operating in Nigeria. The study utilized the ex-post facto research design for its investigation while a sample of forty-eight (48) listed manufacturing firms were purposively selected out of sixty-seven (67) quoted manufacturing firms listed as at December, 2020. The study found that while environmental disclosures (EDD) exhibited a negative effect on Returns on Assets (ROA), Debt to Assets Ratio (DTA) and Market Price per Share (MPS) of the sampled firms, Social Disclosures (SDD), firm size and firm age exerted significant positive influence on sustainable performance of manufacturing firms. This implied that mere adherence to environmental disclosures is insufficient to affect the volume and direction of performance of manufacturing entities. On the contrary, social disclosures involving extensive social engagements and execution of corporate social responsibility initiatives positively impacts and drives sustainable performance of manufacturing companies in Nigeria. The study therefore recommended that management of manufacturing companies must take necessary steps to improve their levels of social engagements with their respective host communities with a view to improving their overall performance in a sustainable way.

Exploring the Mirror versus Substitute Dichotomy in Social and Environmental Disclosure

Much of the debate over how the institutional context can shape corporate social responsibility (CSR) is focused on the dichotomy between liberal and coordinated markets drawn from Varieties of Capitalism. CSR in liberal market economies (LMEs) is seen as a substitute for institutional voids and relies on market incentives, while in coordinated market economies (CMEs), such practices are seen as a mirror of their institutional strengths and rely on stakeholders' networks. Recently, this view has been criticized for its neglect of developing countries since their CSR practices may not fit properly into this LME-CME dichotomy. We add to this debate by comparing the social and environmental disclosure practices of 86 companies from eight different countries: Australia, Brazil, Canada, Germany, India, South Africa, South Korea, and the United Kingdom. We show how institutional characteristics have different effects on social and environmental disclosure, depending on the context in which companies are operating. We show that social and environmental disclosure in LME countries is driven by market forces and is shareholder-oriented, while in CME countries, it is driven by regulatory provisions. Regarding developing countries, the inclusion of different institutional features may be required to better explain companies' social and environmental disclosure practices

The Role of Corporate Governance and Company Specific Characteristics on Environmental Disclosure Practices in India

Purpose-The purpose of this paper is to investigate the determinants of corporate governance factors and company specific characteristics of environmental disclosure in a developing country, namely, India. Design / Methodology/ Approach-A static and GMM-based dynamic panel data regression analysis is used to measure the ecological practices by considering the sample size of 100 non-financial listed companies taken from the National Stock Exchange between 2010 to 2021. Findings-Using two-step dynamic panel data GMM-based estimation, the study finds that governance factors like board size and board meetings are showing a positive effect on disclosure practices. whereas, in the case of an independent director a negative influence can be seen. But in the case of the squared term of independent director, there remains a positive effect on environmental activities. However, in the case of company specific characteristics firm age and the debt-equity ratio are positively influencing environmental activities where as firm size is found to influence negatively on disclosure practices. Originality/value-This study improves the mounting literature on the association between corporate governance factors, company specific characteristics, and environmental practices from an emerging economy standpoint. Specifically, the study inspects the dynamism and endogeneity effect along with the non-linear effect of different independent factors on environmental disclosure.

Environmental disclosures and corporate attributes, from the lens of legitimacy theory: a longitudinal analysis on a developing country

PurposeThe study seeks to evaluate the extent and quality of environmental reporting following a longitudinal analysis and covering a wide spectrum of industries in a single frame. The study also attempts to identify the set of most favored environmental reporting items by firms and items which are least disclosed. Furthermore, the study attempts to test whether certain corporate attributes such as firm size, age of the firm, leverage ratio, profitability, presence of independent directors in the board and gender diversity have any influencing power over environmental disclosure practices. The whole study has been carried out from legitimacy theory setting.Design/methodology/approachThe study follows longitudinal analysis to identify the extent and quality of environmental disclosures. A self-constructed checklist of 12 environmental reporting items has been developed analyzing the annual report and content analysis method is followed to measure the extent and quality of environmental disclosures and identify environmental reporting items which are mostly disclosed and which are least disclosed. The study further uses panel data regression analysis to investigate whether certain corporate attributes have any impact on environmental disclosures using multiple linear regression. Total of 345 annual reports of listed financial and nonfinancial institutions have been observed in this study ranging from 2015 to 2019.FindingsThe key finding suggests that strict enforcement of Green Banking Rules 2011 fosters country’s commercial banks to invest more to protect the environment and commercial banks encourage nonfinancial institutions for environmental performance and related disclosures through finance. Therefore, almost 50% of sample firms disclose their environmental performance through reporting in either narrative, quantitative or monetary format which was only 2.23% in the last decade. Findings also reveal that tree plantation is the most reported environment disclosure followed by investment in renewable energy and green infrastructural projects and the least reported items are fund allocation for climatic changes and carbon management policy. Further analysis shows that firm size and leverage ratio both have positive impact on environmental reporting.Research limitations/implicationsAn in-depth analysis may be conducted to identify why certain environmental items are least disclosed such as fund allotment for climatic changes, carbon management policy, etc. and how corporations may earn social appreciation and motivation by investing in those least preferred items in legitimacy theory setting. Future research may also take into consideration other corporate attributes which are not considered in the study.Originality/valueThe study conducted an in-depth analysis to understand the most favored form of environmental disclosures (narrative/quantitative/monetary) and their extent after incorporation of regulatory guidelines, which is the first of its kind in the research of environmental disclosures. The study indeed contributes to the documentation of environmental reporting in the context of a developing country where there is a lack of longitudinal analysis from the lens of legitimacy theory. Moreover, a wide spectrum of industries has been taken into consideration which facilitates the generalized findings on the environmental disclosure practices of corporations in Bangladesh.

Environmental disclosure practices and Firm performance; evidence from Sri Lanka

The main objective of this study was to identify the impact of environmental disclosure practices on firm performance which is an emerging issue around the globe. This research relies on secondary data which was collected from published annual reports of listed companies in the Colombo Stock Exchange (CSE). Data was collected from a sample of 50 companies listed under 5 sectors over consecutive four financial years from 2015 to 2018. The technique of content analysis was occupied when measuring the level of environmental disclosures. Environmental Disclosure Index (EDI) was prepared based on the Global Reporting Initiative (GRI) Standards 2019. This study employed a regression analysis for the data analysis. The findings of this study revealed that there is a significant positive relationship between environmental disclosures and firm financial performance. However, there is no significant relationship between environmental disclosures and firm market performance. The findings of this study will accommodate annual report preparers and regulators of highly environmentally sensitive industries in creating the grounds of environmental disclosures practice to achieve higher performance.