Environmental Disclosure Research Articles

Sustainable supply chain management operations: does sustainable environmental disclosure matter for banks’ financial performance in Nigeria?

In recent years, banks have incorporated sustainable development strategies to achieve competitiveness in the financial market. However, the primary concern for banks is the financial pressure to implement sustainable environmental practices. In addition, banks are obliged by different regulators to maintain standards in conducting their business and allocating funds. Previous studies examined the relationship between sustainability reporting, corporate social responsibility (CSR), and firms’ financial performance. Few empirical studies examined the impact of sustainable supply chain management (SSCM) operations on firm financial outcomes, yet the banking sector has been ignored in the analyses. To bridge this gap, we examine the dynamic effect of SSCM operations on deposit money banks’ (DMBs) financial performance. We selected seven banks in Nigeria with national, regional and international authorization and data spanning from 2005 to 2023. Based on the panel co-integration test and the Cross-sectional Dependence Autoregressive Distributed Lag model (CS-ARDL) model, we found that SSCM operations have a significant influence on the financial performance (market value and profitability) of the banks. Impliedly, banks’ SSCM operations and environmental consideration in the allocation of funds drive their corporate image and value. Integration of SSCM strategies for a sustainable environment can help enterprises/companies bridge information asymmetry among diverse stakeholders. We offer some policy suggestions in line with the empirical findings.

Pengaruh Penerapan Green Accounting, Environmental Disclosure, dan Material Flow Cost Accounting Terhadap Sustainable Development Goals: Studi Kasus pada Perusahaan Manufaktur yang Terdaftar di BEI

The purpose of this study was to examine the effect of Green Accounting, Environmental Disclosure and Material Flow Cost Accounting (MFCA) on Sustainable Development Goals (SDGS). The population utilized is manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2019 - 2023. The sampling technique used was purposive sampling, so that the sample amounted to 100 observations (20 companies for 5 years). The analysis technique utilized is the classic assumption test, multiple linear regression analysis. The results showed that green accounting and environmental disclosure have an effect on achieving SDGs, while MFCA has no influence on SDGs. This study has implications for manufacturing companies that implement green accounting by incurring environmental costs that will help improve the company's SDGs.

The effect of environmental information disclosure on environmental rating divergence

This study examine the relationship between environmental information disclosure and environmental rating divergence by empirically analyzing China's A-share listed companies from 2011 to 2020. The findings reveal a positive correlation between environmental information disclosure and rating divergence. When regulatory authorities tighten the norms for environmental information disclosure, the impact of corporate environmental disclosure on rating divergence is significantly reduced. Heterogeneity analyses indicate that the variations in environmental information disclosure are less pronounced among large-scale firms and state-owned enterprises. Additionally, audits conducted by the Big Four and the professional board contribute to mitigating the divergence in environmental information disclosure.

A Study on the Construction of Environmental Image of Four Chinese Banks: Based on Metadiscourse Analysis

With the escalating global concern for environmental issues and China's commitment to achieving carbon peaking and neutrality goals, this study aims to investigate how four leading Chinese banks have constructed environmental images through their CSR reports from 2016 to 2021. Utilizing Hyland's (2005) Metadiscourse model and AntConc 3.5.9 for corpus analysis, we quantitatively and qualitatively examine the strategic use of Metadiscourse in these reports. Our findings reveal a dominance of interactive Metadiscourse, particularly transitions and frame markers, which facilitate coherent and structured environmental disclosures. Interactional Metadiscourse, featuring self-mentions and engagement markers etc., underscores the banks' authority and reader engagement. The banks' CSR reports demonstrate commitments to carbon reduction, green finance and credit, ecological agriculture support, and environmental risk management, and then portray proactive environmental images. This research provides insights into how Metadiscourse constructs sustainability discourse in the financial sector, informing ESG reporting and environmental communication strategies.

A Relationship Assessment Between Environmental Practices, Corporate Value, and CSR in Sustainability Context

AbstractThis study examines the influence of environmental performance disclosure within corporate social responsibility on company value. It assesses the impact of green intellectual capital (human, structural, and relational), green innovation (product and process), carbon emission disclosure, and eco-efficiency on Price Book Value (PBV). The sample includes 11 companies from the Sri Kehati Index 2018-2022, which apply Sustainable Responsible Investment (SRI) and ESG principles. Using multiple regression analysis, the findings reveal that green intellectual capital disclosure does not significantly affect company value. However, green innovation positively impacts PBV, suggesting its importance in enhancing corporate valuation. In contrast, carbon emission disclosure and eco-efficiency are found to negatively influence PBV. These results highlight the critical role of green innovation in driving company value while suggesting that certain environmental disclosures may lower valuations. The study provides valuable insights into how environmental practices affect corporate value within the framework of corporate social responsibility and sustainability. Keywords:Green Intellectual Capital, Green Innovation, Carbon Emissions Disclosure, Eco-Efficiency, Company Value

Do Banks Practice What They Preach? Brown Lending and Environmental Disclosure in the Euro Area

Do Banks Practice What They Preach? Brown Lending and Environmental Disclosure in the Euro Area

Towards environmental disclosures: The role of intellectual capital

AbstractThe aim of our study is to investigate the impact of intellectual capital (IC) and its components such as human capital, structural capital, and capital employed on the environmental disclosures (ED) of a company. The IC has been measured using value‐added intellectual coefficient (VAIC) and alternate value‐added intellectual coefficient (A_VAIC). The study employs method of moments quantile regression (MM‐QR) approach to examine the heterogeneous effects of ED within firms by extracting relevant data from ProwessIQ and Bloomberg databases. The findings of the study indicate that the relationship between ED and IC is concave implying that IC initially has a significant positive impact on ED but beyond a point, it produces negative impact. Further, it is noticed that IC's impact increases as we move from lower (25th) to higher quantile (75th), indicating that low values of IC have low impact on ED, whereas high values of IC have greater impact on ED. This is the first study to examine the impact of IC on ED. It also adds to the scarce literature on the new statistical technique of method of moments quantile regression.

Examining The Sustainability Reporting Practices Of An Energy Company Using The Global Reporting Initiative Standards.

A GRI report was collected from a company website from 2016–17 to 2020–21 for the five companies. A content analysis was conducted to assess the extent of environmental disclosure. A disclosure index was created, a check list was created, and percentages were calculated to quantify adherence. Column charts are used for data visualization. The study aims to know how many energy companies disclosed their environmental practices and align with internationally recognized reporting standards.

The Influence of Environmental, Social and Governance Disclosure Concepts on the Success of Sustainable Business in Companies Listed on the Indonesian Stock Exchange in 2023 with the Implementation of Enterprise Resource Planning System as a Moderating Variable

The purpose of this research is to examine and analyze the influence of environmental disclosure, social disclosure and governance disclosure on sustainable business as proxied by Net Profit Margin (NPM) in companies listed on the Indonesia Stock Exchange in 2023 and moderated by Enterprise Resource Planning (ERP). This type of research is quantitative descriptive which uses secondary data with testing tools in the form of SPSS version 29, and the sample used was 51 companies with purposive sampling technique as the sample selection technique. The results of hypothesis testing show that environmental disclosure has a significant positive effect on sustainable business, while social disclosure has a significant negative effect and governance disclosure has a negative but not significant effect on sustainable business. Overall, this interaction is moderated by ERP. Apart from that, ERP has positive effect also been proven to be able to have a direct influence on sustainable business. Keywords: Environmental Disclosure, Social Disclosure, Governance Disclosure, Sustainable Business, Net Profit Margin, Enterprise Resource Planning System

Environmental greenwashing in Japan: the roles of corporate governance and assurance

PurposeGreenwashing is defined as the overstatement of companies’ environmental disclosures relative to their performance. This paper aims to develop a greenwashing measure, examines its relationship with environmental performance and investigates the mitigating effects of Japanese firm-level corporate governance characteristics (corporate structure, board leadership, foreign share ownership, ratio of independent directors and ratio of directors’ variable compensation) and third-party assurance of environmental information on the extent of greenwashing.Design/methodology/approachThis paper analyzes a sample of 420 firm-year observations from the period between 2018 and 2019 from Japanese listed companies that responded to the CDP Climate Change survey via probit/logit and multivariate panel data regression models.FindingsThis paper finds that the probability of engaging in greenwashing is negatively associated with environmental performance, which supports the reliability of the study’s greenwashing measure. Japanese firm-level corporate governance characteristics are ineffective at mitigating greenwashing. This paper also finds that assurance carries a significant risk of being exploited by companies involved in greenwashing to increase the degree of their overstatement.Practical implicationsThe findings have significant implications for investors, who should increase scrutiny and skepticism of environmental disclosures, particularly from companies with poor environmental track records. Japanese companies should consider strengthening their corporate governance to ensure the effective oversight of environmental disclosure and performance. Regulators and standard setters should implement stricter guidelines for and oversight of environmental information assurance.Originality/valueNo empirical study has examined the effectiveness of Japanese corporate governance characteristics and environmental disclosure assurance on the mitigation of greenwashing.

Comply or Explain: Do Firms Opportunistically Claim Trade Secrets in Mandatory Environmental Disclosure Programs?

ABSTRACTThis paper studies whether firms opportunistically make proprietary claims in mandatory environmental disclosure programs with trade secret exemption rules. Examining the mandatory chemical disclosure program in the fracking industry, I find evidence of opportunistic withholding of information among operators that are less likely to have trade secrets. Specifically, I find that these operators claim fewer chemicals as trade secrets when the operating site is in close proximity to water quality monitors. This is only observed among publicly traded operators that face a higher cost of societal backlash when disclosing pollutant information. Further analyses suggest that these operators are concerned about external environmental monitoring, which deters them from opportunistic information withholding. Regarding public and private operators that are more likely to have trade secrets, I do not find strong evidence that their information withholding varies with the monitoring conditions.

The Role of Environmental Accounting in Mitigating Environmental Pollution Risk and its Disclosure

This research explores the critical role of environmental accounting in mitigating environmental pollution risks and improving disclosure practices. Environmental pollution has become a significant global concern, amplified by industrial activities and mismanagement of natural resources. As stakeholders increasingly demand corporate responsibility, environmental accounting has emerged as a pivotal tool for organizations to quantify their environmental impacts, integrate eco-ethics into their financial systems, and enhance transparency in environmental risk disclosures. This study examines how environmental accounting frameworks can aid in reducing corporate pollution by identifying the cost of pollution-related activities and aligning them with financial decision-making processes. Additionally, the research investigates the regulatory frameworks that promote environmental transparency and the challenges that companies face in implementing these practices. Case studies on corporate environmental accounting demonstrate both the potential and limitations of current practices. The research concludes with recommendations on the strategic integration of environmental accounting to foster sustainability and risk mitigation. These findings underscore the importance of consistent environmental disclosure in enhancing corporate accountability and in reducing environmental risks.

Comparative Assessment of Environmental Disclosure Practices: A Case Study of Two Leading Oil Companies in India

This study conducts a comparative analysis of the environmental disclosure practices of two leading oil companies in India: OIL and Petronet LNG. By evaluating their sustainability reports and publicly available environmental information, the research assesses key performance areas such as energy consumption, greenhouse gas emissions, water management, waste treatment, and biodiversity conservation. The analysis reveals that both companies exhibit similar environmental disclosure practices, with strengths in energy and emissions management but significant gaps in compliance, biodiversity, and grievance mechanisms. A statistical t-test shows no significant difference between the environmental performance of the two companies, indicating comparable transparency levels. The study highlights the need for both organizations to improve their environmental reporting and align more closely with global sustainability standards, such as the Global Reporting Initiative (GRI) and Carbon Disclosure Project (CDP). Recommendations include enhancing biodiversity conservation efforts, strengthening supplier environmental assessments, and improving compliance with environmental regulations. Keywords: Environmental disclosure, Oil industry, Sustainability reporting, Comparative analysis, India, Greenhouse gas emissions, Energy management, Water usage, Biodiversity, Compliance, Corporate social responsibility (CSR).

Environmental Cost Disclosure and Financial Performance of Oil and Gas Firms

General Background: The relationship between environmental cost disclosure and financial performance is essential in environmentally impactful sectors like oil and gas. Specific Background: This study focuses on listed oil and gas firms in Nigeria, examining health and safety costs and waste management costs as predictors of return on assets (ROA). Knowledge Gap: Existing research shows inconsistent findings on the effects of environmental disclosures on financial performance, necessitating further investigation. Aims: This study aims to clarify the impact of environmental cost disclosures on financial performance, particularly through health and safety and waste management costs. Results: Using ex-post-facto research design and secondary data analysis, the findings reveal a significant positive relationship between environmental cost disclosures and financial performance, highlighting the importance of these costs on ROA. Novelty: By applying legitimacy theory and focusing on specific environmental costs, this research fills a gap in Nigerian literature. Implications: The study recommends enhanced environmental policies for oil and gas firms, promoting accountability and aligning financial performance with ecological responsibilities. Highlights: Significant positive relationship exists between environmental cost disclosures and financial performance (ROA) in Nigerian oil and gas firms. Health and safety costs and waste management costs are critical predictors of financial performance. The study emphasizes the need for enhanced environmental policies and corporate accountability in the oil and gas sector. Keywords: Health, Safety Cost, Waste Management Cost, ROA

Environmental and Social Disclosure of Brazilian Banking Financial Institutions from the Perspective of the Sustainable Development Goals

Objective: The objective of this study is to investigate the determining factors that influence the disclosure of environmental and social information by the Brazilian banking sector from the perspective of the Sustainable Development Goals (SDGs), with the aim of identifying which organizational characteristics impact the level of socio-environmental disclosure. Theoretical Framework: In this topic, the main concepts and theories that underpin the research are presented. The study is based on the Theory of Legitimacy, which provides theoretical elements for socio-environmental disclosure. This theory explains management’s motivation to disclose environmental information, recognizing that organizational survival depends not only on financial success but also on the ability to maintain a social contract with society. Method: The methodology adopted for this research comprises a quantitative approach based on content analysis of sustainability reports from Brazilian banks. Data collection was carried out through the analysis of corporate disclosure reports published between 2016 and 2020. The regression model with panel data was used to analyze the influence of organizational characteristics on the dissemination of socio-environmental information from the perspective of the SDGs. Results and Discussion: The results obtained revealed that the size of the company and public control are factors that influence the disclosure of socio-environmental information regarding the SDGs. Whether or not the company owns shares on the Stock Exchange and its profitability have little impact on the amount of information disclosed about the SDGs. In the discussion section, these results are contextualized based on the theoretical framework, highlighting the implications and relationships identified. Possible discrepancies and limitations of the study are also considered in this section. Research Implications: The practical and theoretical implications of this research are discussed, providing insights into how the results can be applied or influence practices in the field of socio-environmental disclosure. These implications could encompass the banking sector, regulatory bodies, and policymakers. Originality/Value: This study contributes to the literature by deepening the knowledge about environmental disclosure in the banking sector, a topic still little explored in academic studies. The relevance and value of this research are evidenced by its potential to inform better practices and policies for socio-environmental disclosure in the banking industry.

Direct and Indirect Relationships between Corporate Environmental Disclosure and Financial Performance_ A Test of SDG 12 in a Less-Developed Context

Direct and Indirect Relationships between Corporate Environmental Disclosure and Financial Performance_ A Test of SDG 12 in a Less-Developed Context

Do images help? The impact of proenvironment photographs and graphs in environmental disclosures on investor perceptions and willingness to invest

AbstractThis study investigates the effects of proenvironment photographs and graphs in environmental disclosures on potential investors' perceptions and willingness to invest, considering the moderating role of a company's environmental performance. An online experiment was conducted with experienced investors, where participants evaluated a hypothetical company with varying environmental performance outcomes (negative or positive) presented in different formats (text only, text with photographs, or text with graphs). The results indicate that proenvironment images enhance perceived environmental responsibility for companies with negative environmental performance, whereas processing fluency is improved when the image type aligns with environmental performance. Moreover, perceived environmental responsibility mediates the impact of images on the willingness to invest in negative performance contexts. In contrast, processing fluency mediates this effect for graphs in positive performance contexts. These findings offer guidance for company managers in effectively presenting environmental data and highlight the potential risks for policy‐makers regarding the misuse of images.

Environmental disclosure practices dimensions and total value-added growth of the Nigerian listed manufacturing companies

Purpose: This research explored the interaction of environmental disclosure practices dimensions (environmental financial information, environmental non-financial information, and environmental performance information) on total value-added growth of the Nigerian listed manufacturing companies.Design/methodology/approach: Using a secondary data set culled from 39 Nigerian manufacturing businesses traded on the Stock Exchange between 2010-2019, this investigation utilised an ex post facto research strategy. The multiple regression statistical approach was utilised to analyse the data.Findings: The findings indicated that environmental disclosure practices dimensions (environmental, financial information, environmental non-financial information, and environmental performance information) significantly and positively affect the total value-added growth of Nigerian listed manufacturing companies.Research limitation/implication: This study focused on Nigerian-listed manufacturing companies. Future studies could include non-listed manufacturing companies. Also, other industries could be considered in future studies.Originality/value: As far as the authors are aware, this is the first research to establish a connection between the environmental disclosure procedures of traded manufacturing businesses in Nigeria and the overall value-added increase. In addition, the findings showed the interaction between environmental disclosure practices factors on total value-added growth in listed manufacturing businesses in Nigeria are novel and significant.

Public attention and “Environmental Disclosure Greenwashing”: pressure from oversight or incentive from legitimacy

PurposeThis study aims to investigate whether public attention influences corporate decisions on environmental disclosure, thereby revealing how society perceives and understands environmental issues and how corporations respond to these expectations.Design/methodology/approachWe selected publicly listed Chinese firms as our sample. An “Environmental Disclosure Greenwashing” (EDG) Index was developed through textual analysis of their annual reports using natural language processing. Financial data were obtained from the CSMAR database, and multivariate regression was used for analysis.FindingsThe impact of public attention on EDG primarily manifests as an oversight pressure effect rather than a legitimacy incentive effect. As public attention intensifies, firms tend to adopt more substantial environmental actions instead of merely symbolic environmental disclosures. Formal regulatory frameworks might inadvertently trigger corporate EDG, but public attention can correct the adverse effects possibly introduced by formal regulations. Notably, in firms facing lower institutional pressure, the influence of public attention is more pronounced.Practical implicationsThe evidence suggests that public attention reduces corporate EDG. These findings have significant implications for the regulation of environmental disclosures among firms in emerging economies.Originality/valueThe study integrates research in environmental disclosure with the concept of “greenwashing”, unveiling the limitations of the “disclosure as governance” viewpoint. It elucidates the impact of an informal external oversight mechanism (i.e. public attention) on complex corporate environmental disclosure decisions.

Company Growth and Profitability in Corporate Value with Environmental Disclosure as a Moderation in Oil, Gas and Coal Companies

Company Growth and Profitability in Corporate Value with Environmental Disclosure as a Moderation in Oil, Gas and Coal Companies