Environmental Information Disclosure Research Articles

The uninformed budge yet the misinformed buck: performance information and citizen satisfaction

ABSTRACT This article examines the impact of performance information on citizen satisfaction in the context of an environmental information disclosure programme in the U.S. Through a survey experiment on a nationally representative sample, it finds that the impact depends on disconfirmation, which is the difference between performance information and citizens’ prior perceptions. However, the impact extends only to the uninformed, who do not have strong prior perceptions, but not to the misinformed, who confidently hold incorrect perceptions. With the misinformed consisting a large portion of the population, the findings have important implications for the use of performance information in public management.

Assessing the Relationship between Corporate Social Responsibility and R&D Effectiveness of Firms

Practices of corporate social responsibility often generate synergetic effects and improve financial and overall firm’s performance. However, in the high-tech industries, research and development (R&D) efficiency remains a key element of development strategy, and a shift towards sustainable activities can be considered as a trade-off. This study investigates the empirical link between corporate social responsibility practices and R&D effectiveness in R&D-intensive industries. Specifically, this research assesses the impact of environmental, social, and governance information disclosure, the availability of third-party rating, and long-termism on R&D returns. We employ the Hausman–Taylor estimator to analyze three R&D-intensive industries, namely pharmaceuticals, biotechnology and software, for the period from 2012 to 2019. Empirical results show that, in general, higher values of corporate social responsibility metrics are associated with the weaker R&D returns. The findings of this research might be meaningful for managers in making informed decisions with respect to corporate social responsibility practices.

The Power of Public Oversight: The Effects of Environmental Agency Information Disclosure on Environmental Investment by Polluting Enterprises

Abstract Collusion between government and business presents a significant challenge to environmental governance, yet academic literature rarely addresses effective measures to address this key problem. This study addresses this gap by leveraging government information disclosure data from urban environmental protection agencies in China to empirically examine the impact of such disclosures on environmental investments by Chinese polluting enterprises. Our analysis reveals the positive effects of government information disclosure by enforcement agencies on environmental investments, particularly for enterprises characterized by higher degrees of government-business collusion. Unlike traditional supervision methods from higher authorities to lower ones, government information disclosure operates under public oversight, which can mitigate shortcomings in supervision scope and agency costs. Thus, the findings of this study offer valuable insights for addressing pollution governance challenges. Keywords: Government information disclosure, Collusion, Environmental investment, Polluting enterprises.

Environmental Policy Overlays and Urban Pollution and Carbon Reduction—Evidence from China

The in-depth promotion of environmental pollution prevention and control is a must for China to move towards green development, and the effectiveness of urban environmental pollution control largely depends on the selection of these environmental policies and the synergistic application of these policies. This paper empirically tests three environmental policies’ mixed and synergistic effects using Chinese urban data from 2000 to 2017. This study found that (1) the three environmental policies significantly curb urban environmental pollution and show synergistic effects. (2) The three types of environmental policies can have a superimposing effect by strengthening financial inputs and increasing environmental concern, as well as a complementary effect by improving the efficiency of environmental protection enforcement and the institutional environment. The synergy between the central environmental protection inspection policy and the environmental information disclosure policy is more of a superposition effect than a complementary effect due to the similarity of the policy objectives. (3) The synergistic effect of environmental policies is affected by factors such as the age of the principal officials and financial pressure. The younger the age of the principal officials and the cities with less financial pressure are more capable of utilizing the synergistic effect of environmental policies to form a situation where the market, the government, the public, and the enterprises work together to govern the city. This paper provides new ideas for exploring the synergies and mechanisms of environmental policies and theoretical references for the design, implementation, and effects of environmental policy portfolios in the 14th Five-Year Plan period.

Towards zero-carbon cities: how does environmental information disclosure impact the risk of carbon locking?

Utilizing panel data from 119 cities spanning from 2013 to 2019, the study rigorously investigates the influence of environmental information disclosure (EID) on mitigating the risk of urban carbon lock-in through the application of both two-way fixed effects and spatial econometric models. The findings robustly indicate that EID plays a significant role in facilitating carbon unlocking within cities, a conclusion that remains steadfast even after addressing potential endogeneity issues. Mechanistically, it is revealed that EID can effectively decrease the risk of carbon lock-in by enhancing urbanization levels and reducing energy intensity. Furthermore, the study unveils that the efficacy of EID in curbing urban carbon lock-in risk is also contingent upon factors such as carbon intensity, population size, and environmental quality, highlighting the multifaceted nature of EID's impact on urban carbon management. Specifically, the increase in carbon intensity, the expansion of population size, and the deterioration of environmental quality will reduce the carbon unlocking effect, which may not be conducive to the achievement of the goal of "carbon neutrality" in cities. The spatial effect test found that EID and carbon locking risk are both spatially significant positive autocorrelation, the deepening of local EID can significantly cut the risk of carbon locking in neighboring cities, and the urbanization pathway and energy saving pathway exist both locally and in neighboring places.

Regulatory distance and firms' environmental innovation: The role of environmental information disclosure and social trust

AbstractEnvironmental innovation is an important force driving the development of a green and low‐carbon economy, and close supervision can assist the government in guiding firms' environmental innovation behavior. Based on institutional theory, we construct a model of the relationship between regulatory distance, environmental information disclosure, social trust, and firms' environmental innovation. We analyze a sample of 577 private A‐share listed manufacturing companies on the Shanghai and Shenzhen Stock Exchanges from 2012 to 2022 using multiple regression analysis to test the impact of regulatory distance on firms' environmental innovation. We also consider the mediating effect of environmental information disclosure and the moderating effect of social trust. The results show that an increase in regulatory distance has a negative impact on environmental innovation. Environmental information disclosure plays a partial mediating role between regulatory distance and environmental innovation, and social trust can weaken the negative impact of regulatory distance on environmental innovation. We propose various suggestions based on our findings to promote active environmental innovation by firms.

Impact of Environmental Regulation on Corporate Green Technological Innovation: The Moderating Role of Corporate Governance and Environmental Information Disclosure

Environmental degradation is an important issue facing the world today. Microcosmically, green technical innovation is needed to decrease environmental pollution. Therefore, exploring the relationship between the two is of great significance for promoting environmental protection and sustainable development. Thus, this research elucidates the interaction between green innovation (GI) and environmental regulations (ERs). This study utilizes the fixed effects model to examine how government environmental protection subsidies (EPSs) in market-incentive ER and environmental management system certification (EMSC) in voluntary participatory ER affect GI among listed companies in China. The sample observation period is from 2012 to 2021. Additionally, the impact of corporate governance (CGL) and environmental information disclosure (EID) on the relationship between ERs and GI within businesses is investigated. The empirical results show that both government environmental protection subsidies and environmental management system certification positively affect green innovation, and both corporate governance and environmental information disclosure positively moderate the impact of government environmental protection subsidies and environmental management system certification on green innovation. The above empirical results are still valid after a robustness test and can guide the formulation of government ERs, as well as corporate strategies for environmental management and GI.

EXAMINING THE EFFECTS OF AND MODERATING INFLUENCES ON ENVIRONMENTAL, SOCIAL AND GOVERNANCE INFORMATION DISCLOSURE ON VALUE-AT-RISK: EVIDENCE FROM CHINESE LISTED COMPANIES

Generally, research on the effects of Environmental, Social and Governance (ESG) information disclosure on listed companies is primarily limited to developed countries. By contrast, the current study is located in China and analyses whether ESG reduces the downside risk of listed companies in China, and whether political connections and institutional investors moderate this relationship. This study uses Chinese A-share listed companies from the Shanghai and Shenzhen stock markets from 2010 to 2021 as research samples. Results demonstrated that the inhibitory effect of enhancing ESG performance on enterprise risk is more significant in non-heavy polluting industries, non-state-owned enterprises, and enterprises in areas with low levels of marketisation. This study explores the economic implications of ESG performance from a Value-at-Risk (VaR) perspective, enriching the relevant research on ESG rating in China and providing a fresh perspective to better elucidate the economic significance of companies improving their ESG performance. This study introduces institutional investors and political connections as two moderating variables to analyse their effect on the relationship between ESG performance and VaR. In addition, heterogeneity analysis is carried out in combination with the industry, region, and ownership nature of listed companies to test the “insurance” and “information” effects of ESG performance, to provide decision-making references for investors, enterprise managers, and regulators.

Collaborative governance: The role of common institutional ownership in corporate environmental information disclosure

Transparency regarding environmental practices is crucial not only for ethical corporate governance but also for empowering consumers and investors to make informed decisions. This study examines the impact of common institutional ownership (CInOwn) on the extent of environmental information disclosure (EnvInfoDis) by publicly traded Chinese companies from 2010 to 2020. Using robust empirical analysis, we demonstrate a positive relationship between CInOwn and EnvInfoDis, suggesting that firms with shared institutional investors are more likely to disclose environmental information, fostering public trust and aligning with government expectations. We further investigate the underlying mechanisms, revealing that CInOwn strengthens internal controls, promoting improved EnvInfoDis practices. Notably, the findings remain robust across various tests, including using different CInOwn thresholds. This study offers significant contributions to the ongoing debate on CInOwn implications, paving the way for policy and economic interventions to support Chinese firms in integrating EnvInfoDis practices, ultimately contributing to societal sustainability.

Media pressure, internal control, and corporate environmental information disclosure

This article delves into the intricate connection between media pressure, corporate environmental information disclosure, and internal controls. It uncovers that media pressure and internal controls exert a substantial influence on corporate environmental information disclosure. Media pressure serves as a catalyst, compelling companies to bolster their environmental information disclosure in response to public concerns and market demands, thereby augmenting their reputation and image. Notably, online media pressure plays a particularly significant role in this regard. Conversely, a robust internal control system enhances the level of corporate environmental information disclosure. In the context of the relationship between media pressure and corporate environmental information disclosure, internal controls assume a mediating role.

Pengaruh Pengungkapan Informasi Lingkungan, Sosial, Tata Kelola, Ekonomi, dan Pendekatan Manajemen Terhadap Kebijakan Dividen

This research aims to determine the influence of Environmental, Social, Governance (ESG) disclosure, Economic disclosure, and Management Approach on Dividend Policy proxied by Dividend Payout Ratio and Dividend Yield. The study incorporates five control variables: company size, age, leverage, profitability, and liquidity. The data used in this research are secondary data obtained from the financial and sustainability reports of companies listed on the Indonesia Stock Exchange in the IDX ESG Leaders Index for the period 2020-2022. The results indicate that the disclosure of environmental, governance, and management information does not have a significant influence on dividend policy, both in terms of Dividend Payout Ratio and Dividend Yield measurements. This finding suggests that environmental, governance, and management disclosures cannot be used as a basis for decision-making for stakeholders. Social disclosure has no significant influence on Dividend Payout Ratio, but it has a significant negative impact on Dividend Yield, indicating that social disclosure affects dividend policy negatively. On the other hand, economic disclosure shows a significant influence on dividend policy, both in terms of Dividend Payout Ratio and Dividend Yield measurements.

The value of environmental information disclosure: evidence from China’s carbon-reduction policy

ABSTRACT The impact of environmental information disclosure on firm value is unclear in the literature. Using China’s announcement of its carbon policy as an exogenous shock, this study examines the impact of environmental information disclosure. We find that stock prices increased faster for firms disclosing carbon information through the signalling channel. This study also lends support for disclosing carbon information.

Harmonizing European Financial Regulation: Is There a Need for Improved Similarity in Prospectus Liability Rules?

This paper on financial regulation addresses the extent to which rules on liability for information should be standardized across the EU/EEA region. The method applied is an analysis of legal documents. My finding is that further harmonization may lead to difficulties concerning procedural rules. Some authors suggest harmonizing the civil procedure for prospectus liability cases. This could reduce asymmetric information and thus contribute to efficient markets. However, mandatory disclosure comes with costs. These may increase if standards inconsistent with domestic procedures are imposed. The topic may be of interest for regulating other aspects of life, such as environmental information disclosure.

Research on the Functional Mechanism of EDI, Media Attention and Enterprise Development under the Background of "Double Carbon"

Building an ecologically civilized environment, building a green financial system, and improving corporate management are of great significance to the long-term development of the capital market and the country. This article starts from the perspective of corporate environmental information disclosure, introduces media attention, and conducts an empirical study on the operating performance of China's heavily polluting enterprises. The research results show that there is a negative correlation between environmental information disclosure (EDI) and corporate operating performance. When companies conduct environmental information disclosure (EDI), it will lead to a decrease in corporate operating performance, while increased media attention will improve corporate operating performance. At the end of the article, the article summarizes the research content of this article and puts forward relevant prospects to provide relevant ideas for other scholars' follow-up research.

Financing sustainability: How environmental disclosures shape bank lending decisions in emerging markets

AbstractAs global awareness of environmental responsibilities intensifies, the significance of corporate Environmental information disclosure (EID) in decision‐making becomes increasingly prominent. However, its influence on bank lending decisions, especially in emerging markets like China, remains debated. Using 27,095 firm‐year observations between 2008 and 2020, this study examines the impact of both voluntary and mandatory EID on bank lending decisions. Findings indicate that banks incorporate EID into their lending decisions, offering favorable bank loan terms, both in terms of size and costs to firms with strong EID. To mitigate endogeneity concerns, we employ propensity score matching and a difference‐in‐difference methodology grounded in China's newly amended Environmental Protection Law, with consistent results across both tests. Our research identifies two possible economic mechanisms to explain why EID influences bank loan features: EID's potential to reduce firm‐specific risks and its alignment with local governmental incentives for green finance. Furthermore, our research suggests that voluntary EID, previously overlooked, proves more valuable than mandatory EID. We also find that the effectiveness of EID relies on banks' evaluations of the firm's sincerity and incentives behind the disclosure. Banks show a preference for voluntary EID from firms with minimal adverse selection concerns and mandatory EID from those highly motivated to disclose voluntarily. Moreover, we identify a synergy between EID and bank loans in fostering green innovation. This research not only bridges gaps in the existing bank financing literature but also offers insights into how EID can drive sustainable economic activities in developing economies.

Does the strengthened monitoring policy for key polluting enterprises induce China's green innovation?

To put enterprises reduce pollutant emissions and help them achieve sustainable development, China develops some policies related to environmental information disclosure (EID). A typical example is the strengthened monitoring policy for key polluting enterprises (SMPKPE). Green innovation is one of the major means to reduce pollutant emissions. However, the impact of the SMPKPE on green innovation has yet to be studied. Using the sample of China's listed enterprises from 2009 to 2021 and the multiperiod difference-in-differences method, this article examines whether the SMPKPE affects enterprises’ green innovation. The results are shown as followed: (1) the SMPKPE significantly improves enterprises’ green innovation; (2) this improvement can be achieved by strengthening the supervisory roles of banks and investors; (3) the strengths of the policy for enterprises’ green innovation are depended on the degrees of the financial constraint faced by enterprises. Specifically, taking the financial constraint as a threshold variable, it is found that the SMPKPE significantly improves the green innovation of enterprises with high degrees of financial constraint, while the policy reduces the green innovation of enterprises with low degrees of financial constraint; (4) the SMPKPE improves the green innovation of state-owned enterprises but fails to influence the green innovation of nonstate-owned enterprises. On a theoretical level, the conclusions of this article help to deepen the understanding of EID policies. On a practical level, the successful experiences of China provide valuable practical implications for China and other developing countries that currently face dual economic and environmental pressure.

Corporate environmental information disclosure, managerial ownership and the cost of debt

There is still a dearth of literature on the subject of environmental information disclosure in debt finance with centralized managerial ownership. This study uses environmental information disclosure as a mediating variable to empirical study the impact of managerial ownership on corporate debt financing. Managers may inhibit environmental information disclosure for their own interests, resulting in information asymmetry and ‘over investment’ behaviors. Creditors face additional risks and require higher risk compensation, which increases the cost of debt. Based on a sample of listed heavy pollution firms in China between 2016 and 2020, the research results explore that managerial ownership increases debt cost through a company's environmental information disclosure. This study adds to the literature by demonstrating that managerial ownership both increases the debt cost and prevents environmental information disclosure, despite the literature's indication that managerial ownership will cause changes in the debt cost.

Individual investors’ online voice and corporate environmental information disclosure

This study explores the impact of individual investors’ online voice on corporate environmental information disclosure (EID). Using a sample of all Chinese A-share listed firms from 2009 to 2022, this study finds that individual investors’ online voice significantly improves corporate EID. This result remains robust through various robustness tests. It is further found that the positive effect of individual investors’ online voice on corporate EID is strengthened through external monitoring by institutional investors, analyst coverage, and media coverage. This positive effect is amplified in highly polluting industries. Additionally, individual investors' negative sentiment stimulates firms to disclose more environmental information.

Fostering innovation sustainability with the impact of incremental environmental information disclosure under green credit constraints

Fostering innovation sustainability with the impact of incremental environmental information disclosure under green credit constraints

When blame avoidance meets transparency: local governments’ bandwagon strategy in environmental information disclosure in China

ABSTRACT Despite the ample literature on government transparency, our knowledge about local governments’ strategic responses to transparency mandates, especially those in non-democratic regimes, is limited. This study sets out to fill this gap by investigating local governments’ strategic behaviours in implementing environmental information disclosure (EID), a specific form of government transparency, in the context of China. We assert that local governments in China are largely steered by the motivation of blame avoidance (BA) in EID and tend to adopt the bandwagon strategy, a specific form of anticipatory BA strategy. Moreover, having patronage ties with political superiors weakens local governments’ tendency to engage in the bandwagon strategy. Using city-level governments as the unit of analysis, we apply spatial econometric models in various specifications and find strong evidence that substantiates our arguments.