Level Of Environmental Disclosure Research Articles

Sustainability disclosure in the pharmaceutical and chemical industries: Results from bibliometric analysis and AI-based comparison of financial reports

Climate change is a pressing global challenge, and companies are under increasing pressure to adopt sustainable practices and transparently disclose their environmental performance. This study focuses on the Italian pharmaceutical industry to gain insights into the level of stakeholder and management attention to climate change and the growth of academic research in this critical area. We employ a bibliometric analysis of scientific literature and a content analysis of financial statements to examine sustainability practices and reporting in both pharmaceutical and chemical companies.Our findings reveal a significant difference in stakeholder expectations and commitment to addressing climate change between the two industries. The chemical industry has demonstrated a stronger focus on sustainability, as evidenced by higher academic research and environmental disclosure levels. In contrast, the pharmaceutical sector has shown a comparatively lower level of environmental reporting and sustainability practices. However, our analysis shows a positive trend in pharmaceutical companies’ voluntary disclosure of environmental information in their financial reports.These results highlight the need for increased focus and effort in the pharmaceutical industry to address climate change and improve sustainability practices. Pharmaceutical companies can build stakeholder trust, improve environmental sustainability, increase transparency in reporting, align practices with global sustainability goals, enhance their reputation, and reduce their environmental impact. This research provides valuable guidance for policymakers, researchers and practitioners in promoting sustainable practices in the pharmaceutical industry and contributes to the broader understanding of ESG disclosure and climate change.

The Impact of Environmental Regulations on Carbon Emissions of Chinese Enterprises and Their Resource Heterogeneity

At present, net-zero emissions have become a widely accepted goal globally. For a giant carbon emitter like China, especially after just experiencing a high-energy consumption, high-emission, and low-efficiency extensive economic model, achieving the global net-zero emissions target by the middle of this century is particularly important. The implementation of environmental regulation policies is one of the inevitable choices for achieving carbon peak and carbon neutrality. Existing theoretical analysis shows that environmental regulation acts on pollution emissions through cost effects and technological innovation, but relevant studies mostly focus on macro effects and ignore the impact of enterprise heterogeneity. This study calculates the carbon emission data of listed enterprises in China from 2012 to 2021 and examines the impact of environmental regulation policies on the carbon emission intensity of enterprises and its transmission mechanism from both theoretical and empirical perspectives. At the same time, the heterogeneity effect of resource-based industry and non-resource-based industry is considered. The research results show that China’s environmental supervision has been increasing year by year, which can reduce the carbon emission intensity of enterprises by improving the level of environmental disclosure of enterprises, environmental management concepts, and resource allocation efficiency and accelerating the establishment of environmental systems of enterprises, but the effect of technological innovation has not been highlighted. Further heterogeneity also indicates that environmental regulation is more conducive to reducing the carbon emission intensity of non-resource-based enterprises, small enterprises, and non-state-owned enterprises. The conclusions of this paper provide a precise direction for the implementation of environmental regulation policies in China and the world.

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

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

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

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

Labor Market Institutions, Environmental Disclosure, and Environmental Impacts

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

Impact of institutional ownership on environmental disclosure in Indonesian companies

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

A Study on the Disclosure of Environmental Information of the Company Vale S.A.

As a result of the environmental impacts caused by companies from the most diverse sectors and the growing need to emphasize the measures and actions that have been taken by them to mitigate the impacts resulting from their operational activities, the disclosure of environmental information occurs voluntarily through the Sustainability Reports, evidenced with an informational character. This research aims to analyze the level of environmental disclosure of the Sustainability Reports of the company Vale S.A. in the period from 2016 to 2020. For this purpose, the Scorecard content analysis method was used, which makes it possible to investigate aspects of a qualitative and quantitative nature regarding the environmental practices carried out by the company. Through the results, there is an evolution in the level of disclosure of environmental information in the years 2019 and 2020 for the "hard" disclosure and a constancy in the results of the "soft" disclosure, in addition to a correlation between the level of disclosure and the environmental accidents recorded by the entity. It is concluded that there was concern on the part of Vale S.A. in highlighting the actions and projects to remedy the environmental incidents caused, as well as the innovations and future goals for the company.

Determinants of environmental disclosure of mining industry near the COVID-19 outbreak: Some Indonesian evidence

In their business operations, mining companies that process natural resources must deal with environmental degradation. The companies shall do environmental preservation to mitigate global warming due to business processes and make an environmental responsibility report to ensure a sustainable business. Whether the COVID-19 pandemic affects environmental responsibility is the focus of this study. The pandemic disrupts all sectors, including the mining industry. Therefore, this study investigates the level of environmental reporting made by mining companies before and after the COVID-19 outbreak. In addition, this study also investigates the determinants of the level of environmental reporting disclosed in either the annual report or sustainability report. Thirty-seven companies listed on the Indonesia Stock Exchange in the mining sector in 2019 and 2020 were used as a sample. Results from the Wilcoxon signed rank analysis suggest that the level of environmental disclosure increased following the epidemic’s spread, contrasted to levels prior to the outbreak. The multiple regression analysis reveals that public ownership and size are likely to enhance environmental disclosure. Meanwhile, leverage tends to reduce environmental disclosure. The analysis offers perspective on the capital market authority agency’s new strategy aimed at enhancing aspects that could influence environmental responsibility disclosure.

Competitiveness in the agricultural sector: level of Environmental Disclosure in companies with good Corporate Governance practices

The purpose of this research was to analyze the level of disclosure of environmental information in the financial statements of companies in the Agricultural segment on the Brazilian Stock Exchange B3, which follow good Corporate Governance Practices. First, a documental analysis was carried out and after that, a survey of the respective levels of Corporate Governance of each company was carried out. For data collection, the Management and Sustainability Reports, the Financial Statements, the Explanatory Notes and the websites of the companies were analyzed, in addition to the websites of B3 and CVM. The results indicate that companies have great difficulty finding an adequate way to show environmental information, although it has been found that the disclosure of environmental information is fundamental, as it generates positive marketing for companies, increasing their competitiveness, economic development and appreciation in the market.

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.

Os efeitos da cultura nacional na divulgação ambiental: Uma análise entre países

ABSTRACT This study aims to answer the following research question: How does national culture affect environmental disclosure in liberal economies? Several previous studies have shown that formal institutions, such as the characteristics of the government, the country's financial system, have an influence on environmental disclosure. However, there is still a gap in the literature on how informal institutions (the country's culture) can influence the behavior of companies. The results of this study provide a solid understanding of environmental disclosure in liberal economies. In these economies, it is common for companies to be more interested in disclosing financial and governance information. Thus, analyzing environmental disclosure in these companies presents an additional gain for the literature. Managers can use our findings to understand how the country's culture can influence their business. The adoption of the Global Reporting Initiative (GRI) disclosure guidelines and the presence of a sustainability committee in the company can help companies achieve better environmental performance. We examined the level of environmental disclosure for a sample of 1,037 companies based in Australia, Canada, Ireland, New Zealand, United Kingdom, and United States of America (USA) for the period 2015-2018. To measure national culture, we used the proposed cultural dimensions by Hofstede (1983): distance to power, individualism, masculinity, aversion to uncertainty, long-term orientation, and indulgence. Our evidence shows that power distance, individualism, and masculinity have a positive effect on environmental disclosure. The results show that in cultures with less aversion to uncertainty, companies disclose more environmental information. Our findings also show us that companies that carry out an environmental disclosure following GRI guidelines disclose more sustainability information. The results show that sectors such as energy, materials, and utilities have greater environmental disclosure.

Environmental disclosure and its relation to waste performance

Purpose This paper aims to examine the association between environmental disclosure and waste performance. Design/methodology/approach This study is based on a sample of S&P 500 firms over a nine-year period from 2010 to 2018. The pooled ordinary least squares (OLS), logistic, propensity score matching (PSM) and instrumental variable-generalized method of moments regressions analyses have been used to examine the data. Findings The findings show a significant positive relationship between waste performance and environmental disclosure, suggesting that firms with superior waste performance tend to disclose more environmental information. Further, the authors distinguish between “hard” and “soft” environmental disclosures and find that the effect of waste performance is consistently positive and significant for each type. The observed positive and significant association of waste performance with environmental disclosure remains unchanged, regardless of the industry affiliation of firms, although firms from industries that are less environmentally sensitive provide a slightly higher level of environmental disclosure. The authors also explore possible channels that may explain the association between waste performance and environmental disclosure and find that litigation risk and cash holdings positively moderate the association. The finding remains robust to a number of alternative estimation approaches. Originality/value Overall, the authors present important evidence that waste performance is an important indicator of environmental disclosure. The findings are useful for corporations and stakeholders and have important implications around the globe as the authors continue to grapple with the ongoing issue of waste.

Influence of polluting potential and history of environmental violations in Corporate Environmental Evidence

The aim of this article is to explain the influence of sectors of high polluting potential and with a history of environmental infractions in corporate environmental evidence. To this end, the Financial Statements and Sustainability Reports for the period 2017 to 2019 of the publicly held companies listed in the Brazil Broad-Based Index (IBrA) were examined. From the content analysis of 225 Sustainability Reports published by 78 companies and based on the conceptual structure of Rover et al. (2012), it was possible to identify that most of the environmental information disclosed in the reports refers to information on environmental policy, impacts of products and processes on the environment and environmental financial information. On average, 68.2% of the companies released a Sustainability Report in the period, of which 92% adopted some international methodology in its preparation. The mean level of environmental evidence was 29.03% in 2017; 30.26% in 2018 and 30.41% in 2019 and the basic materials and oil, gas and biofuel sectors showed higher mean levels of environmental evidence. The regression model with panel data with random effects showed that the variables size, sector and history of infractions positively influenced environmental evidence at a significance level of 1% and that the variables indebtedness, profitability, audit and board size did not have significant influence. The two research hypotheses were not refuted, indicating that companies in sectors with high polluting potential (H1) and with a history of environmental violations (H2) have higher levels of environmental disclosure. These findings are consistent with the Legitimacy Theory and the Voluntary Disclosure Theory.

Determinants of Corporate Environmental Disclosures: A case of selected Listed Manufacturing Firms in Tanzania

This study looks into the factors that influence corporate environmental disclosure on the Tanzanian listed manufacturing firms. The study employs  legitimacy theory as a theoretical foundation. For this study, the explanatory variables were profitability, firm size, financial leverage, and board size.  From 2013 to 2020, data were extracted from the annual reports of five listed manufacturing firms for eight years totalling 40 data points. A  regression analysis model was used to analyse data from all of the listed manufacturing firms. According to legitimacy theory, profitability and  board size are significant parameters that positively influence environmental disclosure. Other factors, such as financial leverage and firm size,  appear to positively influence environmental disclosure, though the impact is insignificant. The study recommends that listed manufacturing firms  should improve their levels of environmental disclosure, participate in environmental activities, and ensure that more environmental information is  disclosed for all users to assess. The study recommends for public traded manufacturing firms to improve their levels of environmental disclosure,  participate in environmental activities, and ensure that more environmental information is disclosed for all users to access. 

Análisis del Rol de la Cultura Nacional en la Relación entre Desempeño y Divulgación Ambiental

Purpose: This study aims to investigate the role of culture in the relationship between performance and the level of environmental disclosure. Theoretical framework: Hofstede's model was used with the cultural dimensions of power distance, individualism, masculinity, uncertainty avoidance, long-term orientation and indulgence. Clarkson et. al. (2008) presents the basis for verifying the level of disclosure from a checklist of items present in the entities' sustainability reports. The proxy for environmental performance was defined in different ways by authors, the present study uses the Corporate Knights magazine’s Ranking Global 100, which lists the 100 most sustainable entities in the world. Method/design/approach: Ordinary least squares regression was used with stacked data collected for the years 2018 and 2019. Results and conclusion: The results found show a positive and significant relationship between disclosure and environmental performance only when cultural dimensions were included as mediators in the relationship, contrary to models that relate the two aspects directly or even with the inclusion of cultural dimensions as independent variables. It was found that the positive relationship decreases as a function of individualism and power distance levels and intensifies in countries with higher levels of masculinity. Research implications: The study contributes to the literature about the relationship between performance and environmental disclosure, adding a new perspective. Originality/Value: Provides evidence to standard-setters and regulators of the importance of considering cultural aspects when implementing or analyzing compliance with guidelines on the level of disclosure and environmental performance.

Discussion of “The Evolution of Environmental Reporting in Europe: The Role of Financial and Non-Financial Regulation”

Although regulation on corporate social and environmental reporting in Europe has grown in recent years, there has been limited empirical research on the level, quality, and economic consequences of this regulated disclosure. Barbu, Feleaga and Ferrat (2022) advance our understanding of the impact of European Union legislation on the quantity of corporate environmental disclosures in Europe, showing that regulations improve the level of environmental disclosure. Future research on environmental reporting should provide more in-depth economic intuition and address issues related to differences in cross-country analyses, as well as investigate in more depth both the level and quality of increased disclosure on social and environmental issues, the factors influencing this type of disclosure, and any economic consequences.

The Evolution of Environmental Reporting in Europe: The Role of Financial and Non-Financial Regulation

The research problem We observed the impact of European, international, and national mandatory financial and non-financial regulations on the corporate environmental disclosure of listed companies in the Euronext 100 between 2002 and 2017. Motivation Our study was motivated by the perfect European context created by the implementation of the IASs/IFRSs, mandatory since 2005, to enhance financial statement comparability across European companies, and by the national transposition of the 2014/95/EU Non-Financial Reporting Directive requiring European listed and large corporations to disclose information relative to their environmental footprint starting January 1, 2017. The test hypotheses H1: Financial legislation through the IASs/IFRSs implementation improves the level of environmental disclosure in Europe. H2: Non-financial legislation through the Non-Financial Reporting Directive improves the level of environmental disclosure in Europe. Target population The paper is useful for: (1) researchers wanting to observe the evolution of environmental disclosure in Europe and the main factors influencing it; (2) CEOs and managers who seek to improve their own financial and non-financial reporting; (3) policymakers to know the impact of national and international regulations on environmental disclosure and practices; and (4) users of annual financial statements. Adopted methodology We hand collected data using the financial environmental grid proposed by Barbu et al. [( 2014a ). Mandatory environmental disclosures by companies complying with IAS/IFRS: The case of France, Germany and UK. The International Journal of Accounting, 49(2), 231–247] for both descriptive and monetary items from the annual financial statements of all French, Dutch, Belgian, and Portuguese companies included in the Euronext 100 index. We used descriptive statistics and regression models to analyze this data. Analyses The results are interpreted through the lenses of neo-institutional theory, legitimacy theory, and homogeneity theory. Findings The results show that mandatory financial and non-financial regulations improved the level of environmental disclosure of European companies from different countries over time, but the level of reporting was still very low. The force of coercive isomorphism is not strong enough to cause companies to be more environmentally responsible and to report more, but normative and mimetic isomorphism, and gaining legitimacy, could have a positive influence on the environmental reporting practices of European companies. Taken as a whole, the policy of “one size fits all” is not appropriate for environmental regulation in Europe and needs to be adapted because each country has a specific culture, tradition, and education regarding environmental values. These values should be improved to promote a better environmental conscience, better individual responsibility, and a tangible feeling of truth and transparency in disclosures, with all these generating real environmental practices and reliable reporting without any trace of greenwashing.

Exploring the relationship between board characteristics and environmental disclosure: Empirical evidence for European firms

Research Question: Does the effect of selected board characteristics is contingent on the level of environmental disclosure by European firms. Motivation: Sustainable development is based on a vision where the protection of the environment, social progress and economic efficiency are indispensable. Idea: This research aims to investigate the effect of selected board characteristics on the level of environmental disclosure by European firms. Data: This study used a sample of 220 European companies under the context of a new dataset, namely, DataStream ASSET database. Corporate environmental disclosure index (CEDI) is developed to measure the level of environmental information. Tools: This index is calculated based on the CEDI-related items provided by DataStream ASSET4. Findings: The multiple linear regression analyses were used to verify the effect of the board of directors’ characteristics on the level of environmental disclosure. The results indicate that the board size and board independence have a statistically significant and positive impact on the level of environmental disclosure. Contribution: The findings have important implications for different policymakers; It helps inform regulatory regulators of the importance of good corporate governance to lay the foundation for comprehensive environmental disclosure by establishing valuable relationships with different stakeholders.

Environmental disclosure practices and Firm performance; evidence from Sri Lanka

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

Environmental disclosure practice in the Serbian banking sector

This paper aims to: a) analyse the environmental disclosure practice in the Serbian banking sector, b) determine whether the degree of disclosure is higher in the case of big, i.e. systemically important banks, and c) examine if there is a positive relationship between the banks' CSR practice and their financial performance. The environmental disclosure index (EDI) based on 15 variables was employed to measure environmental disclosure performance for the Serbian banking industry. The data were generated through content analysis of the annual and sustainability reports of a total of 10 banks, five of which were classified as systemically important banks for the period 2015-2019. The sample was determined by the availability of reports for the analysed period and the bank establishment year. The results show that the majority of Serbian banks discloses their environmental policy (74%), the undertaken environmental activities with the local community (51%), and the utilization efficiency of water, energy, and paper (48%). Although the findings indicate that the environmental disclosure practice among all banks in Serbia is growing, the reports are not standardized. In addition, the systemically important banks in Serbia do not have a better disclosure practice. The econometric analysis implies that the bank's status does not influence the level of environmental disclosure and that there is no positive relationship between financial performance (ROA and ROE) and EDI. This study has implications for policymakers and accounting bodies in Serbia in standardizing non-financial reporting and creating certain green and sustainable banking guidelines.