Environmental Sustainability Disclosures Research Articles

The Role Of Decision Tree in Enhancing Predication for the Relation Between Earnings Persistence and Environmental Sustainability Disclosure Indexز

The Role Of Decision Tree in Enhancing Predication for the Relation Between Earnings Persistence and Environmental Sustainability Disclosure Indexز

Do board attributes influence environmental sustainability disclosure in manufacturing firms? Evidence from sub‐Saharan Africa

AbstractThe study builds and extends on the literature on the environment, corporate governance, and sustainability by examining how board attributes impact environmental sustainability disclosure (ESD) and, if so, whether each of the two strands of board attributes, namely, board diversity and structural attributes, influence ESD for manufacturing firms in the sub‐Saharan Africa (SSA) region. Based on insights drawn from the human capital theory and board composition, the study developed a model that connects board attributes with ESD. Using a sample of 200 manufacturing firms from 2010 to 2022, the study found an inverse link between gender diversity and ESD, whereas a positive connection was seen between foreign nationals and ESD. Regarding structural attributes, an inverse link was found between board size and ESD, while a positive connection exists between the separation of the board chair from the chief executive officer and ESD. In summary, the findings urge policymakers in the SSA region to strengthen policies on board diversity and structural attributes to promote ESD. Moreover, the findings advise the board of directors to ensure effective and transparent disclosure of environmental‐related issues to stakeholders to guarantee sustainable reporting practices.

DETERMINANTS OF SUSTAINABILITY REPORTING PRACTICE IN TÜRKİYE

The aim of the study is to analyze the level and determining factors of sustainability reporting practice in Türkiye. A GRI-based sustainability disclosure index was employed to evaluate the sustainability reporting practice. It was documented that listed companies in Türkiye are soft sustainability disclosurers and prefer to disclose environmental-related information more than economic and social information. The findings suggest that profitability, company size, leverage, and company age are positively associated with the level of sustainability disclosure in Türkiye. Moreover, the cash flow capacity of the companies has a significant and negative impact on the level of sustainability disclosure. Specifically, the results of the additional analysis indicate that company size is a significant determining factor of economic, environmental, and social sustainability disclosure.

Empirical Study of the Effect of Sustainability Accounting Disclosures on Financial Performance of Brewery Firms in Nigeria: Evidence from Nigerian Breweries PLC

The main motivation of this study stemmed from the dearth of empirical evidence of the effect of sustainability accounting disclosure on financial performance of Brewery firms in Nigeria and also to provide empirical proof on “governance disclosure” as one of the explanatory variables of sustainability accounting disclosure. Consequently, this study ascertained the effect of sustainability accounting disclosure on financial performance of Brewery firms in Nigeria. An ex–post facto research design approach was adopted for the study. The population of this study comprised five (5) Brewery firms quoted on the floor of the Nigeria exchange group (NGX), and Nigerian Breweries Plc was purposively used as the sample size of this study. Secondary data were carefully sourced from the financial statement/annual reports and sustainability reports from 2013 to 2022 of the Brewery firms quoted on the Nigeria exchange group (NGX). Least regression analysis by aid of E-views 10.0 software was used to test for statistical significance of the effect of sustainability accounting disclosure on financial performance of Brewery firms in Nigeria. The results showed that Economic Sustainability disclosure indexes do not significantly affect Net Profit Margin of Brewery firms in Nigeria. The findings further revealed that Environmental Sustainability disclosure indexes significantly affect Net Profit Margin of Brewery firms in Nigeria. More so, results showed that Social Sustainability disclosure indexes do not significantly affect Net Profit Margin of Brewery firms in Nigeria. Finally, the result established also that Governance Sustainability disclosure indexes do not significantly affect Net Profit Margin of Brewery firms in Nigeria, this study recommends among others; that managers of Brewers in Nigeria should improve and sustain full disclosure practices on economic, environmental, social and governance disclosures following the guidelines of the Global Reporting Index(GRI) as they are capable of exerting significant effect on financial performance of firms in Nigeria.

Correction: Pereira et al. Do the Levels of Environmental Sustainability Disclosure and Indebtness Affect the Quality of Earnings? Sustainability 2023, 15, 2871

The authors would like to make the following corrections about the published paper [...]

Moderating Role of Board Independence on the Effect of Environmental and Governance Sustainability Disclosure on Firm Value of Listed Non-Financial Firms in Nigeria

A corporation’s worth may draw the attention of a variety of stakeholders, and preserving its long-term survival requires overcoming multiple hurdles, most notably the implementation of robust disclosures about environmental and governance sustainability. This study looked at how Board independence affected the link between environmental and governance sustainability disclosures and the total value of Nigerian listed non-financial firms over a decade (2012-2021). Using purposive selection, 69 firms were chosen from a population of 104 to use in a longitudinal study design. Data from the company’s annual reports were evaluated using regression analysis. The Governance Disclosure Index (GDI) and the Environmental Disclosure Index (EDI) were used as proxies for disclosures on governance and environmental sustainability, respectively, while Tobin’s Q was used to represent corporate value. The findings revealed that environmental sustainability disclosure, particularly when moderated by board independence, significantly influenced the firm value of Nigerian listed non-financial companies, whereas governance sustainability disclosure had a significant impact on firm value on its own. As a result, the research recommends that businesses encourage more sustainability transparency via rating and evaluation methods. Furthermore, they should be proactive in developing and executing governance and environmentally friendly policies and programs, since these efforts are critical to increasing their total worth.

DETERMINANTS OF ENVIRONMENTAL SUSTAINABILITY DISCLOSURE

This study examined the determinants of environmental sustainability disclosure. The broad objective of the study was to examine whether board size, board gender diversity and ownership concentration determine environmental disclosure of listed oil and gas firms in Nigeria. Data were collected from published accounts of studied firms using the purposive sampling technique to select a sample size of eight (8) oil and gas firms for the study. The log-linear regression analysis was used to analyze the data obtained. Findings revealed that board gender diversity and ownership concentration have significant effect on environmental disclosure of listed oil and gas firms in Nigeria. The study concludes that concern of environmental disclosure in the financial statements of firms is fundamental and imperative. It is indispensable that the activities of the firm in the environment in which they operate in terms of finance are well documented and accounted for the users of the report to evaluate. The study recommends that size of the board should be regulated to portray the intentions of the firm to further pursue environmental disclosure course and that female board members should be incorporated into the board to balance the compassionate rationale of the board

The Impact of Environmental and Social Governance (ESG) Sustainability Disclosure on Accounting Performance: A Case Study of Firms in Liberia

The Impact of Environmental and Social Governance (ESG) Sustainability Disclosure on Accounting Performance: A Case Study of Firms in Liberia

Accounting Mechanism to Measure the Environmental Impact of Industries in the Aburrá Valley and its Application of the General Disclosure Requirements Related to Financial Information on Sustainability (IFRS S1) and Climate-Related Disclosures (IFRS S2)

Objective: In the research work carried out, an accounting mechanism is proposed to measure the environmental impact generated by the industries that perform their economy in the Aburra Valley, and to determine what are the effects on the application of IFRS S1 General disclosure requirements related to sustainability financial information and IFRS S2 Climate-related disclosures (ISSB), in the disclosures of the financial statements, in which it seeks to incorporate sustainability information, for the analysis and interpretation of the users of the information, starting from the need to bridge the gap between accounting and the environment as an influence of the fact that environmental responsibility concerns any professional area. Theoretical framework: The research is based on the measurement of environmental impact and sustainability disclosures in financial statements. Method: The method is qualitative, surveys were made to companies located in the Aburrá valley, one industrial company was selected for each of the six municipalities evaluated. Results and Conclusions: Through the survey instrument and analysis of IFRS S1 and S2, it was possible to identify in the industries evaluated that there are no control mechanisms, opening the way to recreate indicators that allow the valuation of the economic activities of the industry and propose the creation of accounting accounts in the assets among the resources used in environmental management. Repercussions of the research: Medium and small organizations do not take into account in their financial statements recorded the economic impact associated with business activity, the implementation of indicators and information reporting in the disclosures will help users of the information to determine the administrative and economic efforts of senior management to contribute to the environment. Originality/value: This paper proposes indicators and analysis of environmental reporting in financial information in organizations.

Corporate Board Diversity Effect on Environmental Sustainability Disclosure Evidence from Nigeria

The board of directors is responsible for making important decisions relating to corporate climate strategy. However, there is a possibility that their focus on minimizing agency costs may lead them to compromise environmental policies. This study aims to examine the impact of board diversity on the tendency that consumer goods firms listed in Nigeria will report on their environmental sustainability activities with a focus on a ten-year period (2011 to 2020). This study adopts ex-post facto research design using a population of twenty (20) consumer goods firms listed on the Nigerian Exchange Group's (NGX). A sample of 16 firms were selected through purposive sampling techniques and the data set which were sourced from published audited annual report were analysed using binary logistic regression analyses approach. The result reveal that CEO nationality have a positive significant effect on environmental disclosure suggesting that engaging the services of a foreign CEO can be leveraged upon in the determination of corporate goals that are associated with reducing the adverse effect of firm’s operation on the environment. The outcome is consistent with the stakeholders’ theory and reflects a sign of CEOs commitment to the demands and interests of stakeholders. In view of the foregoing, the study advocate for policies that that will accommodate hiring CEOs from different nationality. Such policies when implemented will give support to environmentally friendly discussions and deliberations which can translate to improved value for the firm. Such policy actions will be fundamental to maintaining good relationships with powerful stakeholders hence help avoid undue pressure from stakeholders.

Is the Environmental-Economic Performance Relationship Symbiotic? Evidence from Listed Non-Financial Firms in Nigeria

This study aims to examine whether environmental sustainability disclosure (ESD) connects symbiotically with the economic performance of non-financial listed firms in Nigeria. The study employed ex-post facto design by collecting secondary data on return on equity (ROE) and measures of ESD from annual financial reports of eighty-six (86) listed non-financial firms with environmentally significant operational impact in Nigeria. Descriptive statistics, including mean and standard deviation were used to describe the properties of the data while the Granger causality test was applied to test the stated hypothesis. The results indicate the existence of a bi-directional association between the measures of ESD and economic performance. Thus, it portrays the economic consequence of listed firms’ operations. The study took a detour from examining mere relationships to delve into causality and thus, implies that commitment to ESD presage benefits to both the host communities and firms. The value of the study lies in the fact that it disentangled the question of causality between ESD and the economic performance of listed non-financial firms in Nigeria. Therefore, within the Nigerian context, the study is pioneer evidence of symbiotic relations between ESD and ROE and hence, improves sustainability discourse.

Board Diversity and Environmental Sustainability Disclosure in Oil and Gas Companies: Evidence from Nigeria

This study examines the influence of board diversity on environmental sustainability disclosure in oil and gas companies in Nigeria. Communities that produce oil in the Niger Delta region of Nigeria have seen ongoing oil spills over time, leading to an intolerable economic situation. The goal of this study is to ascertain whether factors such as board size, board gender, board nationality, and board independence have an impact on environmental sustainability disclosure in Nigerian oil and gas companies. Ex-post facto research approach was used in this study to explore the cause-and-effect relationship between the dependent and independent variables. The study comprised of eight oil and gas companies in the Nigerian Exchange Group. Secondary data from 2011-2020 was used and panel multiple regression analysis was used to analyze the data. Results revealed board independence (BIND) showed positive relationship with environmental sustainability disclosure, but was insignificant to environmental sustainability disclosure, board size (BSZ) showed negative relationship with environmental sustainability disclosure, but was significant to environmental sustainability disclosure, while board gender diversity (BGD) showed negative relationship with environmental sustainability disclosure, but was insignificant to environmental sustainability disclosure, board nationality (BNAT) showed negative relationship with environmental sustainability disclosure, but was also insignificant to environmental sustainability disclosure. This study concluded that reduced board size would lead to increased environmental sustainability disclosure in oil and gas companies in Nigeria. Despite the negative relationship between environmental sustainability disclosure and independent variables, it is still believed that board diversity has a great influence on information disclosure. It is recommended that both the government and management of these companies should be alive to their responsibilities in maintaining and preserving the natural environment.

Environmental sustainability disclosure in sustainability reports: Mining, oil, and gas companies on the Indonesia stock exchange

This paper examines how mining, oil, and gas companies address environmental issues and communicate their actions to stakeholders through sustainability reports. Using market capitalization as a size metric, 50 mining, oil, and gas companies listed on the Indonesia Stock Exchange (IDX) were included in the research sample. Sustainability reports were subjected to quantitative and qualitative content analysis to identify keyword occurrences that were pertinent to the investigation. The findings revealed that environmental protection, emissions, carbon footprint, climate change, biodiversity, nature, planet, effluent, and conservation were addressed in the companies’ sustainability reports. This study confirmed, in line with research on other industries, that the intensity of communication on these topics varies with company size. It was also found that, although some companies discuss many keywords that correspond to the Global Reporting Initiative, they are irrelevant because the reports do not show the companies’ commitment and efforts to achieve the concepts. The practical implication of this research is that companies should show more commitment in their efforts to address environmental issues – sustainability disclosure is not just about words.

Do the Levels of Environmental Sustainability Disclosure and Indebtness Affect the Quality of Earnings?

Previous research has found that, when firms engage in environmental sustainability practices, they tend to give a consistent signal to external stakeholders by acting in a more responsible, transparent, and ethical manner, and these firms tend to exhibit high earnings quality. However, other studies have found that those activities may mask a poor earnings quality. On the other hand, firms with high debt levels face constraints in raising funds. In this study, we expect these firms, when involved in environmental reporting practices, to reveal an increase in their earnings quality in order to improve their ability to capture financing. Thus, we analyze whether the level of environmental disclosure and a firm’s debt increase earnings quality. To analyze the former association, we develop an environmental sustainability reporting index (ESReporting), based on GRI standards, using the content analysis for Portuguese firms from 2016 to 2020. We use earnings persistence as a proxy for earnings quality because it is a fundamental characteristic to determine firm value. Regarding debt, we include a financial indicator to analyze its effect on earnings persistence. To test the hypotheses, we estimate a multiple linear regression, applying panel data. Our results suggest that ESReporting and debt tend to positively affect earnings persistence. In addition, our evidence suggests that ESReporting produces a higher positive impact then debt. These results show that ESReporting and debt may be used as regulating mechanisms of earnings management. Besides, this article brings some insights to the improvement of earnings quality resulting from a higher commitment to environmental disclosure and contributing to monitoring managers’ activities.

Comparative analysis of environmental, social, and governance disclosures

We examine the level of environmental, social, and governance (ESG) sustainability disclosure by firms between two regimes where disclosure is mandatory versus voluntary. We use the regulatory environment between the United States (US) and European Union (EU) to compare ESG disclosures. Firms in the US are currently under a voluntary disclosure regime. In contrast, EU members are under a mandatory disclosure regulatory regime that began in 2017. We find that EU firms outperform US firms under voluntary disclosure requirements (2007–2016), and the ESG disclosure of EU firms further improves relative to US firms after the implementation of the mandatory disclosure in Europe in 2017. Our results suggest that the 2017 adoption of disclosure guidelines in the EU is associated with improvements in EU firms' ESG disclosure. Our results regarding the value-relevance of ESG disclosure support a move toward mandatory ESG disclosures. Results support current initiatives that have been taken by global regulators and stock exchanges in recommending and requiring globally listed companies to disclose their ESG sustainability information to portray accurate and comprehensive corporate reporting. The results further our understanding of how firms from different institutional environment settings may have disclosed their ESG practices, thus providing opportunities for future research.

Analysis of the Extent of Corporate Environmental Sustainability Disclosure in India

The present study's goal was to identify measures and solutions in light of environmental information in corporate sustainability reporting practices in India. For this purpose, corporate sustainability report of 15 Indian Companies for the periods 2016-17 to 2019-2020 were checked and examined. 15 sample companies were selected following “Core &speaker; and Comprehensive Status” from the all-encompassing table of GRI as a pilot study. Based on disclosure check list of 32 environmental aspect parameter of GRI Standards 2016 and unweighted announcement index, the present study measures the consideration of GRI Standards revelation two together at the aggregate level and in respect of environment category of GRI standard. The result shows that in consideration of overall environment GRI Standard disclosures varies from 15.63% to 93.75%. The minimum revelation score of 15.63% is immeasurable. But the maximum announcement score is 93.75%. A mean disclosure score of 67.92% displays a comparatively moderate level of announcement. The study discloses a roomy alternative in consideration of environmental disclosure with range and standard deviation 78.13% and 22.66% respectively. On studies of research findings, the researcher concludes that there exists scope for improvement of environmental aspect reporting by Indian companies.

Sustainability practices disclosure of top logistics firms in Australia

PurposeThis study explores the scope, materiality and extent of environmental and social sustainability disclosure – as benchmarked against the Global Reporting Initiatives (GRI-G4) – of the top 10 logistics firms operating in Australia. It also investigates the relationships between the extent of environmental and social sustainability disclosure of these firms and their actual financial performance.Design/methodology/approachThe authors adopted an inductive case study approach for an in-depth investigation of the relationships among concepts. A content analysis of the firms' sustainability reports was performed to determine their pattern and extent of sustainability disclosure against the GRI framework. A disclosure–performance analysis (DPA) matrix was employed to relate the extent of environmental and social sustainability disclosure of these 10 firms with their actual financial performance (i.e. return on assets [ROA] and total revenue growth).FindingsThis study found that the extent of sustainability reporting was relatively high on the labour practices and decent work subgroup, followed by the environmental dimension of the GRI-G4 framework. However, it was relatively low on the society, human rights and product responsibility subgroups of the GRI framework. The DPA revealed that “Leaders” (firms with higher sustainability disclosure levels) achieved significantly higher ROA. However, “Opportunists” (firms with lower sustainability disclosure levels) achieved higher levels of financial returns (i.e. ROA and total revenue growth) with less attention to sustainability issues, which contradicts the win-win view of the sustainability disclosure–financial performance relationship.Originality/valueFirst, this study contributes an in-depth review of sustainability disclosure practices of top logistics firms operating in Australia. Second, using DPA, it identifies the novel effects of environmental and social sustainability disclosure levels on these firms' financial performance. It also sheds further light on the potential effect of investments beyond substantial profitability for sustainability growth and corporate governance on the sustainability disclosure–financial performance relationship.

Does CSR governance matters for corporate value creation: exploring the nexus between corporate sustainability governance and investment efficiency of acquirers in Pakistan.

This study examines the potential effects of corporate sustainability governance on the investment efficiency of asset acquirers. Using secondary data gathered from the annual reports of sample firms and the global reporting initiatives data repository from 1991-2021, the study results indicate that the provision of sustainable governance better facilitates the efficient allocation of capital and acquirer's value creation. Subject to the individual effects, we find that the economic sustainability disclosure, social sustainability disclosure, and environmental sustainability disclosure have positive and significant effect on the investment efficiency of acquirers that increases the competitiveness of a company's investment. Outcomes further revealed that market risk disclosure and shareholder activism have a strong moderating impact on the relationship between sustainability governance and acquirers efficiency, which significantly complements the acquirer's value. The study findings put forward policy directions that the enforcement of persistent sustainability governance practices has more potential to maximize acquirer's investment.

Impact of Environmental and Social Reporting and Performance on Financial Performance of a Firm: An Indian Study

The article analyses the impact of environmental and social reporting on financial performance through two effects. First is the compliance mechanism, where the firm complies with the expected norms of the field, that is, transparency or unambiguity. Second is the disclosure mechanism, which states that the firm can choose what to disclose. We study how both these mechanisms work in the short and long term in the Indian context. We extensively study the sustainability reporting and sustainability performance of Indian firms. We analyse the impact of environmental disclosure/performance and social disclosure/performance on financial performance (accounting ratios, return on assets [ROA] and return on equity [ROE] of the firm). Analysing a sample of 56 companies for 2014–2021, we show that environmental and social sustainability disclosure positively impacts the ROA/ROE in the long run but not in the short run. Further, the environment and social disclosure positively moderate the positive influence of environment/social performance on ROA/ROE in the shorter run but not in the longer run. These results will help managers understand the strategic role sustainability disclosure can play and how environmental and social disclosure can be used to achieve higher legitimacy and reputation and hence maximize firm returns.

Economic and political uncertainties and sustainability disclosures in the tourism sector firms

The paper investigates the impact of national-level economic and political uncertainties on the quantity of environmental, social, and governance (ESG) sustainability disclosures by the tourism sector firms. The findings indicate that with the increase in economic and political uncertainties, tourism firms make more of the sustainability disclosures mainly to build good relationships with various stakeholders and to spread good word of mouth about the firm’s contribution to social welfare and environmental conservatism. The findings show the role of sustainability disclosures in moderating the impact of economic uncertainty on firm value during the COVID-19 period and global financial crisis period.