Environmental Performance Information Research Articles

Disclosure of CO2 emissions, community complaints, occupational safety and its relation to financial distress

The Indonesian government is committed to resolving emission issues through the development of green industries. The government encourages industries to transform into sustainable industries that are environmentally friendly. The Indonesian government asks the public and the market to put pressure on the industry to improve its environmental performance. The public can monitor and pressure companies through the disclosure of environmental performance information such as disclosure of CO2 emissions. In addition to environmental performance, disclosure of corporate social performance is no less important. Social performance relates to the company’s responsibility towards employees (work accidents) and the surrounding community (community complaints). The risk of companies that have poor environmental performance and social performance can result in the company experiencing financial distress. This study aims to examine the effect of disclosure of CO2 emissions, community complaints, and work safety on Financial Distress. Financial Distress is measured using the Altman Z Score and operational cash flow adequacy. This study uses age and company size as control variables. The sample of this study is manufacturing companies listed on the Indonesia Stock Exchange from 2018-2021. This study uses the Common Effect Model (CEM) and Random Effect Model (REM). The results of the research show Disclosure of CO2 emissions, community complaints, occupational safety has no significant effect on financial distress. However, firm age and firm size have a significant positive effect on the adequacy of the firm’s operating cash flow.

Financial slack and environmental expenditures: Value relevance in the Brazilian stock market

Financial slack and environmental expenditures: Value relevance in the Brazilian stock market

Forty-Seven Years of Environmental Management Accounting Research: A Bibliometric Analysis

Environmental sustainability is considered as responsible engagement with the environment in order to prevent the depletion or degradation of natural resources and ensure long-term environmental quality. Environmental management accounting (EMA) is a tool that aids in enhancing environmental performance and environmental information management. EMA is a growing topic, but there hasn't been a complete analysis to pull everything together and make sense of it all. By adopting bibliometric review, through performance analysis, and science mapping, our research fills in this research gap. Biblioshiny in R and VOS viewer is used for conducting data analysis. Through an extensive study of 1,075 documents, this study discloses the publication and citation trend, top influential authors, journals, publications, and top productive institutions and countries. The study also identifies topic trends through temporal analysis. Different thematic clusters are identified through bibliographic coupling and Co-occurrence of the author’s keywords (i.e. Social and environmental accounting, Environmental management accounting, Environmental performance, Carbon accounting, Sustainability, and sustainable development, Eco-system services, Environmental disclosure, and corporate social responsibility). Centrality measures are presented to show the impact of the author and keywords. The study concludes with suggestions for future study, and ways forward focusing on Circular economy, green accounting, material flow cost accounting, carbon accounting, sustainability, etc. The study is wholly dependent on the Scopus database, further studies can explore other databases like Web of science, google scholar, and others.

The Sidac system: Streamlining the assessment of the embodied energy and CO2 of Brazilian construction products

Life cycle indicators are essential for supporting decisions to decarbonize the construction sector. However, the use of such indicators remains limited in the construction industry, particularly in developing countries, partly because of their complexity, high cost, and fragmented life cycle assessment (LCA) tools. Therefore, we have developed the Information System for Environmental Performance in Construction (Sidac) to change this scenario. The system applies a streamlined LCA approach for assessing the cradle-to-gate embodied energy and CO2 emissions of construction products. This online system includes all functionalities to consistently calculate, verify, communicate, and benchmark life cycle indicators. Based on primary data, the system is intended to facilitate the calculation and disclosure of life cycle indicators for construction products. This paper presents the principles and primary functionalities of this system. The first version of the system database contains generic data for 86 Brazilian construction products and 40 basic inputs, including electricity and fuels, and it is ready to receive manufacturer-specific data. By addressing barriers to assessing life cycle indicators of construction products, Sidac represents an important step towards the mainstream consideration of these indicators in the Brazilian construction value chain. This system can aid public policy in promoting low-carbon construction by providing a centralized and reliable environmental performance information system. Moreover, the development of Sidac is aligned with the trend of increasing digitalization and simplification of LCA. This system can serve as a model for developing similar simplified tools to accelerate the adoption of life cycle thinking in other countries and sectors.

Financial constraints and corporate greenwashing strategies in China

AbstractCorporate environmental responsibility, in response to the call for sustainable development, has become a critical ethical capital for companies to increase firm values and to obtain resources. However, this also gives rise to the concern of “greenwashing” that companies may selectively release environmental performance information to mislead the public and investors. Using the administrative environmental penalty data of all listed companies in China from 2017 to 2018, this research examines the corporate's greenwashing strategies. Our results show that greenwashing by listed companies in China is widespread, that only 13.6% environmental penalties have been disclosed by companies during our studied period. Companies choose to greenwash environmental performance mainly due to future demand for investment and financing, and companies with higher debt levels are found more likely to engage in greenwashing. Our findings suggest that it is not a rare practice for Chinese companies to risk their business ethics to pursue economic interests. It is necessary to enforce environmental information disclosure for listed companies in China and to increase their costs of unethical behaviors.

A natural capital accounting framework to communicate the environmental credentials of individual wool-producing businesses

PurposeThis paper aims to demonstrate methods that sustainability-conscious brands can use to include their primary producers in the measurement and reporting of the environment and sustainability performance of their supply chains. It explores three questions: How can farm businesses provide information required in sustainability reporting? What are the challenges and opportunities experienced in preparing and presenting the information? What future research and policy instruments might be needed to resolve these issues.Design/methodology/approachThis study identifies and describes methods to provide the farm-level information needed for environmental performance and sustainability reporting frameworks. It demonstrates them by compiling natural capital accounts and environmental performance information for two wool producers in the grassy woodland biome of Eastern Australia; the contrasting history and management of these producers would be expected to result in different environmental performances.FindingsThe authors demonstrated an approach to NC accounting that is suitable for including primary producers in environmental performance reporting of supply chains and that can communicate whether individual producers are sustaining, improving or degrading their NC. Measurements suitable for informing farm management and for the estimation of supply chain performance can simultaneously produce information useful for aggregation to regional and national assessments.Practical implicationsThe methods used should assist sustainability-conscious supply chains to more accurately assess the environmental performance of their primary producers and to use these assessments in selective sourcing strategies to improve supply chain performance. Empirical measures of environmental performance and natural capital have the potential to enable evaluation of the effectiveness of sustainability accounting frameworks in inducing businesses to reduce their environmental impacts and improve the condition of the natural capital they depend on.Social implicationsTwo significant social implications exist for the inclusion of primary producers in the sustainability and environmental performance reporting of supply chains. Firstly, it presently takes considerable time and expense for producers to prepare this information. Governments and members of the supply chain should acknowledge the value of this information to their organisations and consider sharing some of the cost of its preparation with primary producers. Secondly, the “additionality” requirement commonly present in existing frameworks may perversely exclude already high-performing producers from being recognised. The methods proposed in this paper provide a way to resolve this.Originality/valueTo the best of the authors’ knowledge, this research is the first to describe detailed methods of collecting data for natural capital accounting and environmental performance reporting for individual farms and the first to compile the information and present it in a manner coherent with the Kering EP&L and the UN SEEA EA. The authors believe that this will make a significant contribution to the development of fair and standardised ways of measuring individual farm performance and the performance of food, beverage and apparel supply chains.

Impacto do transporte nas emissões de CO2 do concreto: um estudo de caso em Rio Branco/Brasil

Abstract Due to the scarcity of crystalline massifs in the north of Brazil, concrete producers have been using crushed stone and cement from suppliers located hundreds of kilometers away. In this case, CO2 emissions related to material transportation for concrete production may become significant. Thus, this study aims to analyze the influence of the transportation of the materials in CO2 emissions of ready-mix concrete production in Rio Branco (Acre). Concrete compositions were obtained from a local concrete producer. Brazilian methods of dosage were not applicable due to the high fineness of the regional sand available; the mix designs were adjusted empirically. Two types of cement (CP V-ARI and CP IV) were considered to create the studied scenarios. Transportation distances of the raw materials (cement and aggregates) ranged from 20 km (local sand supplier) to 3,592 km (cement supplier from Sete Lagoas, MG). CO2 emissions to produce concrete (fck of 25 MPa, cement consumption of 426 kg/m3) ranged from 208 kgCO2/m3 to 573 kgCO2/m3. Transportation was responsible for up to 20% of total emissions. The emissions in this study are considerably higher than the national data of concrete production available in the Construction Environmental Performance Information System (Sidac) due to the higher cement consumption and higher transportation distances. Although cement consumption in Acre represents less than 1% of Brazilian consumption, the results reveal the impact of transportation distances in CO2 emissions of concrete in cities that deal with local scarcity.

Systematic review of integrated reporting: recent trend and future research agenda

PurposeIntegrated reporting (<IR>) promotes transparency in corporate reporting and communicate detailed information on how a firm creates value in the short, medium and long-term. The purpose of this paper is to systematically review <IR> to provide insights into theories, determinants, consequences, contingent variables and methods that have been used in previous studies.Design/methodology/approachThe study was based on a systematic review of 17 articles published between 2017 and 2020.FindingsNine theories were used in prior studies. Board size, diversity, independence, level of activity of the board, the establishment of Higher Education Institutions (before or after 1992), adoption of IR framework, size, institutional ownership, sustainability committee and the use of non-financial performance measures in executives’ compensation contracts and separate risk management committees are determinants of <IR>. Further, the positive impact of <IR> on information asymmetry, market valuation of environmental, social and governance performance, financial performance, intellectual capital, sustainability embeddedness and organisational change, external sense of legitimacy and reputation, revenue growth, corporate environmental performance and circular economy-related information, with mixed findings for analyst earnings forecast accuracy, company value and market value. Only three studies used moderating and mediating variables to examine <IR>. Quantitative research approach and secondary data are most preferred by <IR> scholars.Research limitations/implicationsSome papers may have been omitted unintentionally, although the author did his best to include most of the prior published articles using a rigorous methodology.Practical implicationsThis paper set out future research agenda on how <IR> research could be enhanced.Originality/valueContrary to prior systematic reviews that consider individual constructs/concept, the review herein adopts a comprehensive approach and considers moderating and mediating variables aside from theories, effects and determinants of integrated reporting.

Environmental management accounting, board role performance, company characteristics and environmental performance disclosure

PurposeThe increasing environmental challenges require efforts to expand the scope of accounting to better evaluate organizations’ behaviour/practices. This paper aims to report the results of studying the link between environmental management accounting (EMA), board role performance (BRP), company characteristics and environmental performance disclosure (EPD) of Ugandan manufacturing firms.Design/methodology/approachThe study was correlational and cross-sectional. The results are obtained through content analysis of company reports, websites and a questionnaire survey of 102 large and medium manufacturing firms in four districts of Uganda.FindingsResults indicate that EMA causes significant variances in EPD in manufacturing firms. Also, BRP and firm size explain variances in EPD through EMA.Research limitations/implicationsThe research does not control for industry type. Still, the results offer hope on how the reliability of environmental performance information that companies voluntarily provide outside financial statements, can be improved.Originality/valueResults potentially extend available literature by providing a mechanism through which the environmental performance information is obtained for onward disclosure.

Environmental reporting, ownership structure and corporate characteristics of Indonesian listed companies

Environmental reporting is a means to communicate the environmental performance information by an organization to its stakeholders. Information on environmental performance among others comprises the impact of the organization’s operation on climate change, the environment, performance in managing those impacts, and contribution to ecological and sustainable development. This study aims to examine the association between environmental reporting, ownership structure, and corporate characteristics, namely financial performance, board gender, and company size. Ownership structure was measured by managerial ownership, while financial performance was measured by liquidity, solvability, and profitability ratios. The study uses one hundred and twenty-eight manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2017 as a sample. Results of multivariate regression analysis indicate that managerial ownership and profitability have a positive association with environmental reporting. These results suggest that the higher the shares owned by the management, and the more profitable the company, the higher the incentives to disclose environmental information in the company’s annual report. The study provides additional insight into the capital market authority agency regarding factors that may influence listed companies to report their environmental awareness under the Global Reporting Initiative (GRI) G4 environmental framework.

Análisis de información y factores de desempeño ambiental y de economía circular en empresas peruanas

Peruvian companies with significant sustainability impact have a significant development in their environmental information. Based on this, this research aims to analyze the level of disclosure of environmental performance information according to the Global Reporting Initiative (GRI) and circular economy (CE) practices. Similarly, determine its relationship with the size and business sector for those companies that published their sustainability report, and analyze the results within the framework of legitimacy and institutional theories. A quantitative investigation was carried out by means of a content analysis of the sustainability reports to determine the indices of the level of disclosure of said information, description and relationship of the variables indicated. This level of environmental disclosure is not met in all aspects of GRI. In fact, the results indicated greater compliance in the dissemination of environmental waste management, water, transport and regulatory compliance indicators, an institutional influence by type of business activity was observed. On the other hand, CE practices also did not show a high degree of disclosure, while input consumption reduction and waste management practices showed greater disclosure. The business sector presented a relationship with the level of environmental information, however, neither the size nor the sector of the companies were related to the CE information.

Trend and relationship between environmental accounting disclosure and environmental performance for mining companies listed in China.

We examined the effect of environmental disclosure on environmental performance for listed mining companies in China. Our analysis used China’s Environmental Information Disclosure Degree (EIDD) and the Chinese Securities Regulatory Commission’s disclosure guidelines to propose the Environmental Information Disclosure Index. Majority of previous studies on environmental disclosures focused on a particular company or city or province. Few studies considered a whole sector of a country. Among the few studies that considered a whole industry, none of such studies considered the mining industry. In addition, our study employed a recent environmental disclosure index and modified a recent index for environmental performance for the empirical analysis making our study unique. We also employed vigorous reliability and robustness test to ensure that our findings are valid and can be used by policy-makers. Using panel data for thirty-four mining companies from both Shanghai and Shenzhen Stock Exchange for the period 2000–2018, our cointegration estimation analysis concluded that corporate environmental performance and environmental information disclosure has a positive and significant relationship at a 1% level. Trend analysis revealed that mining companies comply with environmental information disclosure in China. This was seen from the great improvement in the environmental disclosure for mining companies between 2008 and 2010 after the enforcement of EIDD. Our results contribute to the previous literature and open the way for further studies on industry level in other countries.

The Impact of Sustainability Accounting on Corporate Financial Performance, Evidence from Oil and Gas Company Sector in Egypt

This research is aimed to examine the effect of Sustainability accounting to corporate financial performance. Three material aspects reported in the Sustainability accounting such as economic performance information(ECO), environmental performance information (EN), and social performance information (SCO) are used as the independent variables in this research and the dependent variable is the corporate financial performance which is proxied by using sales growth. This research was conducted using mainstream positivistic quantitative methods to test the two formulated hypotheses. the questionnaire was designed and distributed to a sample of top management, cost accountants, managerial accountants, financial accountants, financial analysts, general employee Belongs to oil and gas companies in Egypt that interest to sustainability reports using GRI-G4 guidelines. This standard is the latest edition issued by the Global Reporting Initiative (GRI), which can be applied starting from 2018. The results presented that economics, environmental, and social aspects have a positive significant effect on corporate financial performance. And the two control variables (top management support and innovation) have a positive significant effect on the relationship between sustainability accounting and corporate financial performance. The practical implication of this research that, the oil and gas company must know the value of social, economics, and environmental report in sustainability accounting. Stakeholders become interested in such reporting, and they judge to give “value good image”. A good image is what helps enhance the financial performance of the company.

Embedding Sustainability Performance and Long‐Term Strategy in the Earnings Call

The practice of disclosing corporate Environmental, Social and Governance performance information continues to evolve, and the frequency of ESG disclosures in investor‐facing discussions, including Investor Day presentations and non‐deal roadshows, continues to grow. But even with these developments, the corporate‐investor dialogue about ESG and long‐term strategy, and their expected effects on long‐run profitability and value, has continued to lag. This seems particularly evident in the quarterly earnings call.In this article, the authors review the work of NYU's Center for Sustainable Business, in collaboration with Chief Executives for Corporate Purpose (CECP), in encouraging companies to work ESG themes and performance into their quarterly earnings calls. After discussing the reasons for the relatively slow progress in this important disclosure venue, including interviews with sell‐side analysts, the authors propose practical approaches that can guide companies, regardless of industry or market cap, in delivering this content in a way that is valuable to both buy‐side and sell‐side equity analysts.

The Effects of Environmental Performance and Environmental Information Disclosure on Financial Performance in Companies Listed on the Indonesia Stock Exchange

The objective of this study was to examine the effects of environmental performance and environmental information disclosure on financial performance in companies listed on the Indonesia Stock Exchange. The population in this study amounted to 20 companies listed on the Indonesia Stock Exchange, issued an Annual Report and Sustainability Report and included in the Sustainability Disclosure Database of the Global Reporting Initiative (GRI). The data used in the form of secondary data obtained from annual reports and sustainability reports of companies listed on the Indonesia Stock Exchange from 2013 to 2016. The numbers of observations in this study were 80. The analysis technique used was Partial Least Square (PLS). The novelty in this study is to measure environmental performance based on outcomes, namely environmental costs incurred by the company rather than compliance with regulations. The cost of a well-managed environment will improve environmental performance because there are efficient use of resources. The results of this study indicate that eenvironmental performance has no significant effect on financial performance, environmental information disclosure has a significant effect on financial performance. Disclosure of environmental information has a negative effect on financial performance, it shows that if the disclosure of environmental information is more equipped and in accordance with the disclosure guidelines, the cost is not small so that it will reduce financial performance. Research limitation that environmental costs is difficult to obtain so that the population is limited to companies listed on the IDX that have a Sustainability Report and are included in the Sustainability Disclosure Database of the Global Reporting Initiative. Disclosure of environmental information which is the result of the implementation environmental management accounting has not been done by all companies, because it is still voluntary is not mandatory. The suggestion of the research, the Indonesian Accountants Association is expected to form separate standards for measuring and reporting environmental cost information and standardized. For other researchers who are interested in researching environmental accounting can develop other variables for a longer time and the number of companies that publish more Sustainability Reporting.

Do environmental responsibility views influence investors’ use of environmental performance and assurance information?

Purpose The purpose of this study is to investigate whether investor views regarding the benefits of corporate environmental responsibility moderate the influence of environmental performance and assurance information on their judgments. Specifically, the authors examine the effects of two broad views: environmental responsibility is more important than financial performance, regardless of investment returns (i.e. environmental responsibility importance) and positive environmental performance will increase investment returns (i.e. environmental performance return). Design/methodology/approach Nonprofessional investors completed an online study where environmental performance (high or low) and assurance on environmental performance information (present or absent) were varied. Participants’ corporate environmental responsibility views were assessed using a series of questions adapted from Cheah et al.’s (2011) study. Findings Environmental performance and assurance information had a greater influence on the investment judgments of investors with strong environmental responsibility views. In contrast, participants’ environmental performance return views did not moderate the influence of environmental performance and assurance information on their judgments. Supplemental analysis indicates that these contrasting results are due to the fact that the two investor views have differing influences on the relative importance that investors place on financial vs environmental performance information. Research limitations/implications This study presented participants with summarized financial and environmental performance information to maintain scale compatibility between financial and environmental measures. However, the information was presented in a format similar to those used by online brokerages. Practical implications This study suggests that financial statement preparers should consider investors’ views regarding the importance and value of environmental performance information when making decisions to disclose and obtain assurance on this information. Social implications Standard setters should consider individual differences among investors when developing guidance regarding the disclosure and assurance of environmental performance information. Originality/value There is limited prior research which examines how investors’ views of the importance of environmental performance information may influence investment judgments. This research indicates that the strength of investors’ environmental responsibility importance moderates the previously reported influence of environmental performance and assurance information on investment judgments.

A study on ecolabeling and Life Cycle Assessment for food products in Indonesia: Potential application to improve the competitiveness of the tea industry

The increasing customer awareness and supporting regulation on environmentally-friendly products around the globe has fostered the need for revealing environmental performance information on their label, using an instrument called ecolabel. Ecolabeling system requires a life cycle consideration for the product, and Life Cycle Assessment (LCA) serves as a method to perform the assessment for the entire product’s life cycle. In the field of food industry, specifically the tea industry, a 2014 report by International Institute for Sustainable Development showed a growing influence of ecolabel in the global market. Ecolabel and LCA become important tools for improving product competitiveness. Meanwhile, tea as one of Indonesia’s main commodity has faced a challenging competition in the international market as indicated by decreasing export—despite increasing global demand—in recent year. This study reviews the ecolabeling system in Indonesia and LCA for food products. Furthermore, this study also investigates the potential application of ecolabel and LCA to improve the competitiveness of the tea industry. According to the study, the implementation of ecolabeling for tea still faces some challenging issues due to the supporting certification scheme and customer perspective. On the contrary, research on LCA for food products provides a promising application to improve tea product competitiveness. Therefore, this study recommended that, while educating people more toward ecolabeling, research on LCA should be continuously conducted to support the implementation of ecolabel in the long term.

Forty-year review of developments in underwater acoustic modeling

This is the sixth paper in a series of reviews presented at eight-year intervals starting in 1979 [J. Acoust. Soc. Am. 65, S42 (1979); 82, S102 (1987); 97, 3312 (1995); 114, 2430 (2003); 129, 2631 (2011)]. All surveys covered basic acoustic models and sonar performance models. Basic acoustic models included 143 propagation, 29 noise, and 32 reverberation models. Propagation models were categorized according to ray theory, multipath expansion, normal mode, fast field, and parabolic approximation formulations; further distinctions were made between range-independent and range-dependent solutions. Noise models included ambient noise and beam-noise statistics models. Reverberation models included cell and point-scattering formulations. The 44 sonar performance models included active sonar models, model operating systems, and tactical decision aids. Active sonar models integrated basic acoustic models, signal-processing models, and supporting databases into cohesive operating systems organized to solve the sonar equations. Model operating systems provided a framework for the direct linkage of data-management software with computer-implemented codes of acoustic models. Tactical decision aids represented a form of engagement-level simulation that blended environmental and sonar performance information with tactical rules. The overall inventory increased by 5 models per year; historical references are maintained in the fifth edition of Underwater Acoustic Modeling and Simulation.

The Value Relevance of Environmental Responsibility Performance

In Indonesia, research on the value relevance of non-financial information is still very rare, while several studies outside Indonesia also show mixed results. This leaves a challenge to test the value relevance of environmental performance information. This research was conducted in the period of 2010 to 2017, with companies that consistently became PROPER participants for 8 consecutive periods as its research subjects. The result shows that environmental performance information provides additional value relevance, which is indicated by an increase in R squared after entering environmental performance variables

How does environmental regulation affect environmental performance? A case study of China's regional energy efficiency

AbstractEnvironmental regulation has been recognized as an important way to directly improve environmental performance or indirectly impact environmental performance through increasing environmental innovation. The present paper constructs an energy and carbon emission total factor productivity index using the Malmquist–Luenberger productivity index and data envelopment analysis. The proposed technique is used to measure the environmental performance of 30 Chinese provinces during the period 2010–2015. The energy and carbon emission total factor productivity measure is divided into a pure technical efficiency index and a technical progress index to provide detailed environmental performance information. Then an ordinary least squares model is adopted to analyse the impact of environmental regulation on environmental innovation operation and environmental performance by hypothesis testing. The empirical results show that environmental regulation and environmental innovation have positive direct effects on environmental performance and that market‐based environmental regulation has a positive indirect effect on environmental performance by increasing environmental innovation.