Article

Does ownership structure affect carbon emission disclosure?

June 2024
Asian Review of Accounting 33(1)

DOI:10.1108/ARA-11-2023-0307

Authors:

Guru Nanak Dev University

Purpose The current research strives to shed light on how ownership structure can impact carbon emission disclosure. Design/methodology/approach The present study is based on S&P BSE 500 Indian firms. Using manual content analysis, carbon emission disclosure data were collected from a final sample of 318 nonfinancial Indian firms over seven years, i.e. from 2016–17 to 2022–23, having 2,226 firm-year observations. The panel regression has been employed to examine the association between ownership structure and carbon emissions disclosure. Findings The results of the study suggest that ownership structure variables, such as institutional and foreign ownership, exert a positive and significant influence on carbon emission disclosure. Conversely, block-holder ownership is negatively associated with carbon emission disclosure. Practical implications This study enriches the emerging literature on environmental disclosure, climate change, carbon emission disclosure and ownership structure. Social implications The present research work provides treasured acumens to corporate managers, investors, regulators and policymakers as the study corroborates that ownership structure has an imperative role in firms' carbon emission disclosure. Originality/value Existing literature has determined the impact of ownership structure on environmental disclosure. In contrast, the current research extends the climate change literature by providing novel insights into how ownership structure can influence firms’ carbon emission disclosure. Moreover, to the best of the authors’ knowledge, the present study is the first to scrutinize the relationship between ownership structure and carbon emission disclosure in the Indian context.

THE INFLUENCE OF CORPORATE GOVERNANCE MECHANISMS ON CARBON EMISSION DISCLOSURE: DOES GREEN PERFORMANCE MATTER?

Article

Full-text available

Feb 2025

Carbon emissions disclosure has attracted researchers' attention. This study aims to provide empirical evidence on the influence of more comprehensive corporate governance mechanisms on carbon emission disclosure based on legitimacy and stakeholder theories. This study introduces virtue ethics theory, a new theory in carbon emission research, to explain the moderating role of green performance. Observational data includes 455 data from a sample of companies listed on the Indonesia Stock Exchange from 2018 to 2022. The research data was processed using multiple linear regression methods and moderated regression analysis. The study's results prove that the size of the board of commissioners, the independence of the board of commissioners, the sustainability committee, and institutional ownership positively affect carbon emission disclosure. The green performance also revealed can strengthen the influence of board of commissioners diversity on carbon emission disclosure. Corporate governance is needed to encourage companies to disclose their carbon emissions.

Institutional Ownership, Board Diversity, And Carbon Emission Disclosure

Article

Full-text available

Jan 2025

Global warming is a crucial issue that is being discussed today. One of the causes of global warming is the development of the industrial sector, which contributes to greenhouse gas emissions. This condition requires public companies to disclose carbon emissions. This study explores the role of institutional ownership and board diversity in carbon emission disclosure (CED) in Indonesia. Board diversity refers to the female and foreign director variables. The study was conducted on manufacturing companies over three years and data analysis using moderated regression analysis. The study results revealed that institutional ownership increased CED. Nevertheless, board diversity testing as a moderation variable provides inconsistent results. The results of the interaction test revealed that the existence of female directors was able to moderate the relationship between institutional ownership and CED. Conversely, foreign directors cannot moderate the relationship between institutional ownership and CED.

THE INFLUENCE OF CORPORATE GOVERNANCE MECHANISMS ON CARBON EMISSION DISCLOSURE: DOES GREEN PERFORMANCE MATTER?

Article

Oct 2024

Factors Determining of Carbon Emissions Voluntary Disclosure in Indonesia’s Energy Sector Companies

Article

Full-text available

May 2024

Reporting information on carbon emission from company operations is a form of social and environmental responsibility that contributes to the reduction of greenhouse gas emissions to achieve the SDGs target by 2030. This carbon-related reporting is the role of accountants through carbon accounting as a form of transparency and accountability, as well as an effort to reduce GHGs emissions produced by companies. This research is intended to see how energy sector companies implement voluntary disclosure of carbon emissions with several determinants which is reflected in the company size scale, the exposure carried out by companies in the company’s website media, and shareholding owned by institutions. The research population is in energy sector companies listed on the Indonesia Stock Exchange (IDX) during 2018-2022. Samples of this research used purposive sampling, so that 50 observational data were obtained consisting of 10 energy sector companies in 5 years period. Result show that media exposure influences carbon emission disclosure. Companies that present media exposure have an increase in the carbon emission disclosure level. Meanwhile, firm size and institutional ownership have no influence on the carbon emission disclosure. A company with a large size scale and high institutional shareholding does not guarantee that it will report information of carbon emission thoroughly.

Pengaruh Kepemilikan Institusional, Kepemilikan Manajerial, Kinerja Keuangan, dan Women on Board Terhadap Pengungkapan Emisi Karbon

Article

Feb 2025

This study aims to examine the effect of institutional ownership, managerial ownership, financial performance, and women on board on carbon emission disclosure. The research utilize secondary data in the form of annual reports and sustainability reports of the companies. The population of this study consists of companies in the energy, infrastructure, and industrial sectors listed on the Indonesia Stock Exchange (IDX) for the 2021-2023 period. The data collection method employed in this study is purposive sampling with unbalanced data. A total of 147 companies data points met the criterias. The data analysis method used is quatitative, utilizing SPSS 30 for multiple linear regression analysis. The results of this study indicate that financial performance has a positive effect on carbon emission disclosure, while institutional ownership, managerial ownership, and women on board have no effect on carbon emission disclosure

The Impact of Carbon Emission Disclosure on Firm Value

Article

Full-text available

Jun 2024

This study illustrates the importance of corporate disclosure of carbon emissions as a strategy to increase firm value in a global context that is increasingly concerned with sustainability. Through a meta-analysis of five international journals, findings show that carbon emissions disclosure is positively correlated with increased firm value in several Asian countries such as Korea and Taiwan, where this transparency is supported by strict government oversight and media attention to environmental policies. However, challenges arise in China, where a lack of responsiveness to economic transformation and inadequate disclosure practices can negatively impact firm value by hindering access to funding and firms' risk management capabilities. The implementation of international standards such as ISO 14064 in carbon emissions management was also emphasized as key to improving transparency, corporate reputation in terms of sustainability, and attractiveness to investors who are increasingly prioritizing sustainable business practices.

Do institutional investors’ holdings affect corporate environmental information disclosure? Evidence from China

Article

Full-text available

Oct 2022
Environ Dev Sustain

Due to the increasingly serious environmental pollution, stakeholders are paying more attention on the environmental behavior of enterprises. Our paper investigates how institutional investors affect the quality of corporate environmental information disclosure (EID). Using a sample of A-share listed firms from the heavily polluting industries in China during 2008 to 2016, we conduct correlation analysis, OLS regression, and Tobit regression methods and find that institutional investors' shareholdings are positively correlated with the quality of EID. When institutional investors increase 1% shareholdings of the firm, the EID quality improves by 0.03%. In addition, the high concentration of institutional ownership enhances the impact of institutional investors' shareholdings on the EID quality. But this positive correlation is only observed in companies in regions with a high marketization level. Our paper extends the research on the influential factors of EID and improves the understanding of the impact of institutional investors on corporate environmental behavior.

Do Foreign Investors Affect Carbon Emission Disclosure? Evidence from South Korea

Article

Full-text available

Sep 2021
Int J Environ Res Publ Health

The purpose of this study is to examine the relationship between foreign investors and voluntary disclosure. Focusing on voluntary disclosure of carbon emissions information and using South Korean firms from 2014 to 2019, we found that foreign investors are likely to voluntarily release information on carbon emissions. Thus, foreign investors play a role in controlling the information gap in a capital market. We also discuss the effect of environmental, social, and governance activities on the relationship between foreign investors and voluntary disclosure. We infer that the analysis result shows that foreign investors motivate firms to improve the environment to prepare for future environmental risks. Our study also suggests solving environmental problems actively, such as responding to climate change, by presenting a direction for policymaking on sustainable management.

Ownership structure and environmental, social and governance performance disclosure: the moderating role of the board independence

Article

Full-text available

Aug 2021

Purpose The current study dealt with the ownership structure effect as a potential determinant of the environmental, social and governance (ESG) performance disclosure in the Jordanian context. Design/methodology/approach Using the content analysis technique, data were collected and analyzed from a final sample of 51 annual reports of Jordanian industrial companies listed for 2012–2019. Findings The results show that foreign ownership and state ownership play a critical role in disclosing the ESG performance. Also, the board's independence plays an influential role in improving disclosure quality, enhancing family ownership in disclosure. It also limits the negative role of block holder ownership and managerial ownership on the ESG disclosure. Originality/value To the best of the authors' knowledge, this is the first study that deals with the role of ownership structure on the ESG disclosure level separately and collectively through the moderating role of board independence.

Drivers of corporate voluntary disclosure: A systematic review

Article

Full-text available

Jul 2021

Purpose: The purpose of this research is to provide a systematic and comprehensive review to the existing literature on the determinants of firms reporting practices. Methodology: Following a systematic method, the sample literature of 135 studies was collected from Scopus database. These studies were evaluated in terms of the theoretical lenses applied in the literature, yearly trend, regional distribution, research settings, and prior studies finding to provide some recommendations for further research. Findings: The investigation revealed that the literature was more interested in the agency theory in investigating the drivers of voluntary reporting such as company size, age, leverage, liquidity, profitability, corporate governance, and ownership structure. Although firm-specific determinants were the most examined in the previous studies, however, the result is still inconclusive. Also, a limited work was found on the country-related factors, while internal audit impact has yet to be explored. Contribution: Being the first of its kind, this research provides a comprehensive review of the current research landscape on the drivers of environmental or social disclosure and highlights several interesting opportunities for future research.

A bibliometric analysis of cash holdings literature: Current status, development, and agenda for future research

Article

Full-text available

Mar 2021

Despite the growing interest in exploring the cash holding aspects among scholars, systematic reviews and comprehensive evaluation in this area has been limited. Also, there is only a fragmented understanding about how the cash holdings concept is formed among researchers and experts. We fill this gap in the literature by identifying and evaluating the research development of cash holdings topic. Using 874 articles from the Scopus database that were published between 1947 and early 2020, bibliometric and content analyses were employed to assess the patterns of global cash holdings research. We find that previous studies have substantially enriched our knowledge of the antecedents and consequences of cash holdings. Yet, there are still several opportunities to make significant contributions in this area. The contribution of this research is to provide a comprehensive evaluation of the development of cash holdings research (using a sizeable archival database). It identifies the current joint development and potential opportunities for future work directions on cash holdings association with payout policy, corporate social responsibility, and corporate governance. Our results are likely to be of interest to academics, practitioners, and educators in related business and finance fields.

The Effects of Blockholder Dispersion on the Informativeness of Earnings: Evidence from Korea

Article

Full-text available

Nov 2020

This paper studies the relationship between blockholder dispersion and the informativeness of earnings using a sample of Korean companies. Investors prefer less volatile and more sustainable earnings and managers have incentives to manage earnings to meet investor demand. We show evidence that firms with dispersed ownership, which are likely to suffer from high levels of information asymmetry, smooth earnings in order to relieve investors’ concerns regarding information asymmetry. Furthermore, our regression analyses on the relation between returns and future earnings reveal that earnings smoothing conducted by firms with dispersed ownership leads to higher informativeness of earnings. This study provides important implications for various financial statement users in interpreting firms’ earnings sustainability, especially in the East Asian countries where a wide spectrum of ownership concentration structure exists.

Disclosure of integrated reporting elements by industrial companies: evidence from Jordan

Article

Full-text available

Mar 2021
J Manag Govern

In most developing countries, integrated reporting disclosure is still a recent topic and voluntarily practiced. The new reporting provides a comprehensive framework for disclosures of information in companies' annual reports. Although the subject has been discussed in the literature since its release in 2013, empirical evidence on this topic is scarce especially from developing economies. In these countries, including Jordan, the disclosure practice is still debatable and voluntary. To date, only a small number of studies have examined the subject of integrated reporting disclosure at the global level. The present study applies the international integrated reporting framework and evaluates the disclosure level in the annual reports of Jordanian listed industrial companies. The study covers the period from 2014 to 2017. Data was gathered from the companies' annual reports and analyzed using content analysis. The results indicate wide variations in the current practice, where the companies provided a high level of disclosure for two reporting elements which are risks and opportunities, and the basis of preparation and presentation, while four of the reporting elements show disclosures at the medium level. On the other hand, the results were disappointing in terms of governance and outlook. This study contributes to the accounting disclosure literature by exploring the current state of integrated reporting in Jordan, a developing country. Also, the results provide new insights for the regulators in assisting and guiding companies to improve the disclosure practices. At the same time the study highlights the disclosures elements which deserve companies' attention and reflect the expectations of stakeholders in moving towards a global adoption of integrated reporting.

Factors affecting corporate environmental disclosure in emerging economies – the role of corporate governance structures

Article

Full-text available

Sep 2020
Bus Strat Environ

Ali Meftah Gerged

This study seeks to examine whether internal corporate governance (CG) mechanisms affect Corporate Environmental Disclosure (CED) in emerging economies. Using a sample of 500 firm-year observations, this study distinctively applies a linear panel quantile regression (PQR) model to examine the CG-CED nexus in Jordan. This technique is supplemented with conducting a two-step dynamic generalised method of moment (GMM) model to overcome any potential occurrence of endogeneity problems. This study reports an increasing trend in CED practice among the sampled companies over the period of analysis, yet it is still at an early stage as compared with their developed counterparts. Furthermore, this study suggests that board size, board independence, CEO-duality, and foreign ownership have positive associations with CED. In contrast, managerial ownership, institutional ownership, and ownership concentration are negatively associated with the disclosed amount of environmental information in the Jordanian context. Theoretically, board structures appeared to be more efficient than ownership structures in reducing agency conflicts by addressing the asymmetric gap of information and promoting the disclosure of environmental information. These findings add to the debate about whether ownership structures detrimental to CED in developing economies. Specifically, when it comes to spending money on CED, owners seemed to be more concerned about any reductions in their 'share of the pie' and may, therefore, be less motivated to disclose their companies' environmental information. This paper provides managers, owners and policymakers with a set of context-specific recommendations related to the crucial need for a more concerted effort to integrate governance and environmental regulations in order to ensure sustainability in emerging markets.

The Implications of Ownership Structure on the Environmental Disclosure in Jordan

Article

Full-text available

Mar 2020

This paper investigated the effect of a set of factors related to the ownership structure at the level of environmental disclosure in Jordan during the period 2012-2107. The study examined the factor of foreign ownership, government ownership, managerial ownership and block-holder ownership, as well as a study sample consisting of 51 Jordanian industrial companies listed On the Amman Stock Exchange. The study used content analysis to obtain 306 notes during the study period, and appropriate statistical tests were applied to obtain the results. The results indicate a significant impact of foreign ownership on the level of environmental disclosure. While the results did not provide sufficient evidence for the presence of impact Government ownership, managerial ownership and block-holder ownership on the corporate environmental disclosure level, the results of the study are important for stakeholders, policymakers and regulators, by identifying how companies deal with the issue of environmental disclosure and focusing on supporting the factors that represent strengths in influencing disclosure.

Corporate voluntary greenhouse gas reporting: Stakeholder pressure and the mediating role of the chief executive officer

Article

Full-text available

Jan 2020
Bus Strat Environ

The study sheds light on the extent to which various stakeholder pressures influence voluntary disclosure of greenhouse gas (GHG) emissions and how the impact is explained and moderated Chief executive office (CEO) characteristics of 215 FTSE350 listed United Kingdom (UK) companies for the year 2011. The study developed a classification of GHG emission disclosure based on the guidelines of GHG Protocol, DEFRA and Global Framework for Climate Risk Disclosure using content analysis. Evidence from the study suggests that some stakeholder pressure (regulatory, creditor, supplier, customer, board control) positively impacts on GHG disclosure information by firms. We found stakeholder pressure in the form of regulatory, mimetic and shareholders pressure positively influenced the disclosure of GHG information. We also found creditor pressure also had a significant negative relationship with GHG disclosure. While CEO age had a direct negative effect on GHG voluntary disclosure, its moderation effect on stakeholder pressure influence on GHG disclosure was only significant on regulatory pressure.

Do Women on Boards Influence Climate Change Disclosures to CDP? – Evidence from Large Indian Companies

Article

Full-text available

Aug 2019

Participation of women on corporate boards is increasing across the globe. Corporate with women directors on their board are more likely to address the emerging strategic issues of climate change, enhance GHG emission disclosure strategy and communicate the actions to the stakeholders. According to Board Capital Theory, the presence of women on boards increases board capital breadth in different dimensions. According to Critical Mass Theory, boards with three or more female directors tend to influence the board’s decision-making process which results in more favourable environmental disclosure. Findings of earlier studies reiterate that female executives and directors bring different ethical values and traits to decision-making. This paper studies the effect of women on board on climate change reporting to the Carbon Disclosure Project (CDP) by the large Indian companies. The sample for this study includes S&P BSE 100 indexed companies and the period of the study is 6 years ranging from 2010-11 to 2015-16. This study used secondary data. The CDP data and financial data are taken from Bloomberg Professional Database. Based on the items disclosed by companies for CDP questionnaire, a Carbon Disclosure Index is constructed and used in this study. Using a multiple regression model, it is found that there is a significant positive relationship between the percentage of women directors on boards and climate change-related disclosure to CDP. Using independent ‘t’ tests, it is found that companies having at least three women directors disclose more. Thus, this study supports both board capital theory and critical mass theory.

Relationship between Sustainable Disclosure and Performance—An Extension of Ullmann’s Model

Article

Full-text available

Aug 2019

Due to the lack of consensus on the Sustainable Disclosure (SD)–Sustainable Performance (SP) relationship and the absence of a robust theoretical framework base, this research tests this relationship. Based on Ullmann’s argument that the execution of corporate responsibility regarding SD, SP and EP (economic performance) is determined by the management’s (unobservable) overall strategy, we apply Partial Least Squares, introducing EP, size and membership in sensitive sectors and subjecting them to a multiplicity of external pressures (social, environmental and legislative) as determinants of the SD–SP link. There is a moderate SD–SP relationship, with a significant effect due to EP and conditioned by size. Specifically, (1) the companies that are concerned and which act sustainably have a higher SD, (2) the greater the EP, the greater its effect on this SD, but (3) when the sample is segmented by size, the moderating effect is only positive and significant for large companies. An awareness of the added value of the sustainable business model exists, more than simply reporting (actions beyond words), but the value that its profitability yields will not be determinant for SP, though it will affect SD, despite there being no direct relationship between performance and SD.

Does Ownership Structure Affect Firm Performance in an Emerging Market? The Case of India

Article

Full-text available

Jun 2019

Research aim: This study aims to examine the impact of ownership structure (ownership concentration and identities) on the financial and market performance of Indian listed firms, post the US financial crisis 2008. Design/Methodology/Approach: This study is based on a six-year financial data set of 100 Bombay Stock Exchange (BSE) listed firms, from FY 2009-10 to FY 2014-15. The study applies the static panel data model (pooled OLS, fixed effect and random effect) and the dynamic panel data model (two-step generalised method of moments) for the hypotheses testing. Research findings: This study finds that in the case of ownership concentration, large owners have no link with the financial performance. However, they have an adverse impact on the market performance. The presence of promoters, domestic institutions and foreign institutions appears to boost the financial performance, whereas the foreign institutional investment seems to enhance the market performance.

External Pressure, Corporate Governance, and Voluntary Carbon Disclosure: Evidence from China

Article

Full-text available

May 2019

This paper uses manually collected data of carbon information disclosure for listed companies, from 2009 to 2015 in China, to measure corporate carbon information disclosure, and it explores the impact of external pressure and internal governance on carbon information disclosure through text analysis and a hierarchy analysis process. The results show that, firstly, the greater the external pressure is, the higher the level of carbon information disclosure will be; that is, when listed companies are state-owned enterprises or in heavy pollution industries, the level of carbon information disclosure is higher. Secondly, the higher the level of corporate governance is, the higher the level of carbon information disclosure will be; that is, when the board of directors is larger, the proportion of independent directors is higher, and the chairman and general manager positions are differentiated, the level of carbon information disclosure is higher. Furthermore, when listed companies are state-owned and in heavy pollution industries, the level of carbon information disclosure is higher; when the chairman and general manager are in the same position (lower governance level), the positive impact of government pressure on carbon disclosure is less significant, the positive impact of external pressure on carbon disclosure is less significant, and the positive interactive impact of government pressure and external pressure on carbon disclosure is less significant. The conclusions of this paper are still robust after Heckman two-stage regression, propensity score matching (PSM) analysis, sub-sample regression, and double clustering analysis.

Determinants of Voluntary Greenhouse Gas Emission Disclosure: An Empirical Investigation on Turkish Firms

Article

Full-text available

Dec 2018

Firms worldwide have been facing an increasing pressure to disclose their Greenhouse Gas (GHG) emissions since GHG emissions are seen as the main source of global warming which is one of the most challenging problems that the world is faced with. For this reason, voluntary GHG disclosure represents a growing area of research interest. However, the existing research generally focuses on developed countries. In this sense, the present paper aims to contribute to the existing GHG disclosure literature by analyzing the determinants of voluntary disclosure of firms operating in a developing country, Turkey. The effects of both financial characteristics and board structures of firms on voluntary disclosure decisions are analyzed as the possible determinants of GHG disclosures of Turkish firms. We use two proxies for assessing the firms’ GHG disclosures. The first proxy, “sensitiveness tendency”, indicates the response behavior of firms to the Carbon Disclosure Project (CDP) survey. The second proxy, namely, “transparence tendency”, represents the disclosure behavior of firms. Using logistic regression models with a sample of 84 listed Turkish companies which were included in the Carbon Disclosure Project survey in 2014, 2015 and 2016, we find that firm size, institutional ownership and market value are positively related to the sensitivity of sampled firms, while board size is negatively related. On the other hand, our results indicate that firm size, profitability and institutional ownership have positive impacts on the transparency of Turkish listed firms.

Disclosure of corporate sustainability performance and firm performance in Asia

Article

Full-text available

Oct 2018
Asian Rev Account

Purpose The purpose of this paper is to examine the disclosure pattern of corporate sustainability (CS) and the influence of sustainability reporting on firm performance of four countries in Asia – Japan, South Korea, Indonesia and India. Design/methodology/approach The authors have collected the sustainability reports and annual reports of 111 firms from four Asian countries for a period of six years. Based on the framework of Global Reporting Initiatives (GRI, 3 and 3.1), content analysis is used for calculating the disclosure score of corporate sustainability performance (CSP). These scores are further used to examine the impact on firm performance by employing a panel data regression model. Findings The study finds that the average level and quality of disclosure are the highest for Japanese firms, followed by India and South Korea. However, in the case of Indonesia, the average score is very low. Further, the study finds a significant difference in the disclosure of overall sustainability as well as components of sustainability between the countries. The regression results indicate the positive impact of CSP (both in terms of level and quality) on MBR. Specifically, the outcome of the regression model reveals that both the level and quality disclosure of CS are crucial for enhancing firm value for both the developed and developing countries of Asia. Moreover, the relative influence of CSP (both in terms of level and quality) on firm performance is found to be more in developed countries than the developing countries of Asia. Originality/value This is the first comprehensive study in the Asian context to investigate the disclosure pattern of CSP and also examine the association between CSP and firm performance by employing the panel data model. The outcome of this study is useful for policy implication.

A Cross-Country Investigation of Corporate Governance and Corporate Sustainability Disclosure: A Signaling Theory Perspective

Article

Full-text available

Jul 2018

There is a dearth of research on corporate governance and total sustainability disclosure (economic, environmental, and social) in developing, particularly South Asian, countries. This is unique cross-country research on South Asian countries’ corporate governance elements and total sustainability disclosure practices. The study considers a set of insightful theories, namely, the signaling and agency theories of understanding the motives and drivers of sustainability reporting. Based on data from the Global Reporting Initiative database, the study analyzes Bangladesh, India, and Pakistan. We have collected annual report and sustainability reports from the GRI database for the period between 2009 and 2016. Based on the signaling and agency theories, the study investigates how board and shareholding structures convey signals to the market and different stakeholders. Our empirical results find that total sustainability disclosure has a positive and significant relationship with foreign shareholding, institutional shareholding, board independence, and board size. On the other hand, we document that director shareholding is negatively but significantly associated with total sustainability disclosure. Therefore, we conclude that corporate governance elements have very strong influential power to send positive signals to the market that lead to reduced information asymmetry and ensuring honest signals from different stakeholders.

Ensuring More Sustainable Reporting in Europe Using Non-Financial Disclosure—De Facto and De Jure Evidence

Article

Full-text available

Apr 2018

Non-financial disclosure has become increasingly popular, as it can satisfy the information needs of a growing range of stakeholders. Because traditional financial reports cannot provide comprehensive accountability, several frameworks and guidelines for facilitating non-financial information disclosure have been developed. Recently, the European Union issued Directive 2014/95/EU (EU Directive) and subsequent guidelines (EU Guidelines 2017/C215/01 [EUG]) to mandate European entities of public interest to convey non-financial information to improve such organizations’ accountability toward their stakeholders. This paper studies the European stage of non-financial reporting from a regulatory and practical point of view. To this end, the first research objective is to analyze the elements that the EUG have in common with the IIRF and the GRI 4 guidelines. Second, the paper proposes a first analysis to assess the compliance to the EUG by performing a content analysis on a sample of annual reports and integrated reports (IR) drafted by the 50 biggest European companies. The results highlight that the content elements required by the Directive exceed the requirements of the two frameworks and that there is already a high level of compliance by European big companies with the EUG. More specifically, particular attention is devoted to Social, Employee and Environmental Matters. Accordingly, the companies demonstrated a common awareness of the necessity to provide an exhaustive amount of social and environmental disclosure in order to maintain legitimacy. Also the disclosure on Principal Risks and Their Management is widespread to meet investors’ and stakeholders’ requirements in recent years with respect to the general level of risk disclosure provided by companies.

Determinants of Corporate Climate Change Disclosure for European Firms

Article

Full-text available

Oct 2017

This study identifies the determinants of climate change disclosure under the prism of sustainable development in European context. The selected variables involve environmental performance, ownership structure, and verification of climate change initiatives. Cross-sectional data derived from the Bloomberg terminal of the European 500 index concerning 215 firms in the year 2014 are employed. The novelty of the present study stands on the use of proxies for climate change disclosure by adopting the Climate Performance Leadership Index (CPLI). The results reveal that better environmental performance positively affects the level of climate change disclosure. In addition, governmental ownership and independent verification of environmental data determine climate change disclosure. Thus, climate change disclosure is thought to be an effective managerial tool for shareholders and stakeholders to superintend corporate management limiting information asymmetry level; furthermore, higher environmental performers prefer actual climate change disclosure providing a plausible signal. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment

The Impact of Corporate Governance Attributes on Environmental Disclosures: Evidence from India

Article

Full-text available

Jun 2017

This study examines the asymmetries in capital structure adjustment speed depending on firms’ affiliation to business groups. Using partial adjustment framework on a dataset of 2001 listed Indian nonfinancial firms over the period of 2005–2013, it was found that Indian firms annually adjusted about 37 percent of their deviation from target leverage. Groups firms, in general, adjust their leverage ratio slower than the stand-alone firms, suggesting lesser net benefits of adjustment for the former than the latter. The results are persistent irrespective of firms’ extent of deviation from their target leverage. However, the net benefits of adjustment and consequently the adjustment speed for both the groups of firms, irrespective of their extent of deviation from target leverage, seem to be alike, when they are over-levered and lower for group firms than the stand-alone firms, when they are under-levered. These findings indicate that both group and stand-alone firms face identical threats, when they are overlevered, whereas group firms possibly have alternative arrangements to reduce the owner–manager agency conflicts and tax liability, when they are under-levered. These findings are expected to prove helpful for financial managers in designing their capital structure based on ownership structure, and the nature and extent of deviation from the target leverage.

Social Responsibility Journal Sustainability reports in Brazil through the lens of signaling, legitimacy and stakeholder theories Article information:

Article

Full-text available

Mar 2017

Purpose The purpose of this paper is to extend the applicability of stakeholder, legitimacy and signaling theories by examining to what extent proactive corporate social responsibility disclosures are interrelated to attempt to gain and maintain legitimacy, to gain support of the stakeholders and to reduce information asymmetry. Design/methodology/approach To test the theoretical arguments, a longitudinal approach over a five-year period of 145 companies’ sustainability reports and statistical analysis was applied to investigate the evolution of their quality. Findings The results show a significant increase in the quality of sustainability reporting, and the experience gained while writing these reports can contribute to this. Based on signaling and legitimacy theories, this paper suggests that improvement in sustainability reporting quality acts as an important signal to gain legitimacy in case of information asymmetry during the legitimacy process. Th disclosure for economic and social dimensions is better than that of the environmental dimension, and the improvement in quality over time is the because of synergies and interlinkages more between these two dimensions of sustainability, and to a lesser extent because of the environmental dimension. Practical implications Firms should view investing in sustainability reporting disclosure as a strategy for obtaining business legitimacy. Originality/value The results of this paper are of interest for several reasons: extend and broaden the use of signaling in studying its use on sustainability reporting; the use of three theories is an appropriate framework for empirical analysis of sustainability reporting disclosure quality in Brazil; and add to the scarce evidence of sustainability reporting in Brazil.

Does government ownership affect corporate governance and corporate disclosure?: Evidence from Saudi Arabia

Article

Full-text available

Sep 2016
Manag Audit J

Purpose This paper aims to examine the moderating effect of government ownership (GO) on the association between corporate governance (CG) and voluntary disclosure (VD). Design/methodology/approach This study used multivariate analysis to examine the moderating variable. Findings GO has a moderating negative effect on the association between CG factors [e.g. board size, non-executive directors (NEDs)] and VD, which indicates that GO plays a negative role in the effectiveness of CG. The study also found that audit quality is not affected by the influence of GO, indicating that companies without GO are better than companies with GO in terms of applying the best practices of CG to provide sufficient and high-quality disclosure. Originality/value This study has important implications for governments to be more effective in implementing the best practices of CG. Additionally, the findings could have implications for authority regulators, policy makers and shareholders to require effective implications for CG to reduce the effects of GO the implementation of best CG practices and the disclosure of quality information.

The Timing of Changes in CEO Compensation from Cash Bonus to Equity-based Compensation: Determinants and Performance Consequences

Article

Full-text available

Dec 2012

This study examines the determinants and performance consequences of changes in CEO compensation structure. The study uses the unique setting when Australian companies have changed from cash bonus to equity-based compensation. While most US CEOs receive some form of equity-based compensation, Australian CEOs have not always been paid equity-based compensation. According to efficient contracting theories, we argue that the change to equity-based compensation is driven by changes in firm characteristics and by the occurrence of CEO turnover, the latter of which provides a less costly opportunity for such change. Our results are consistent with the above arguments. We also document a significant negative association between changes in compensation structure and subsequent firm performance in the following year, even after controlling for CEO turnover and poor governance environments. Overall, our results suggest that the initial change to equity-based compensation is part of an error learning process made by firms that leads them towards efficient CEO compensation contracts.

Corporate Ownership Around the World

Article

Full-text available

Feb 1998

We present data on ownership structures of large corporations in 27 wealthy economies, making an effort to identify ultimate controlling shareholders of these firms. We find that, except in economies with very good shareholder protection, relatively few of these firms are widely-held, in contrast to the Berle and Means image of ownership of the modern corporation. Rather, these firms are typically controlled by families or the State. Equity control by financial institutions or other widely-held corporations is less common.

The role of foreign board and ownership on the quality of sustainability disclosure: the moderating effect of social reputation

Article

Dec 2023
Corp Govern

Purpose This study aims to examine the effect of social reputation on the relationship between boards and foreign ownership on the quality of sustainability disclosure. Design/methodology/approach The sample of this study consists of publicly-traded primary and secondary sector companies in Indonesia for 12 years, from 2009 to 2020. This study uses panel model regression to generate its results. The disclosure data are hand-collected data sourced from annual financial and company sustainability reports. Findings Higher foreign board component companies report lower quality of sustainability disclosure, whereas companies that possess foreign ownership components report a higher quality of sustainability disclosure. This result is strengthened by obtaining consistent results tested with economic, social and environmental disclosure components. In addition, if the company has a good social reputation, it will strengthen the relationship of foreign ownership to the quality of sustainability disclosure. Practical implications These findings are relevant for policymakers, professional organizations and practitioners in Indonesia and other developing countries. Originality/value The moderating effect of social reputation on the relation of the foreign board and foreign ownership-quality of sustainability disclosure as this study does remain rare in developing countries. This study complements various research conducted in developing countries, such as Indonesia, by offering a new dimension. The results indicate that social reputation has a moderating role in determining the impact of foreign ownership on the quality of sustainability disclosure.

Reconnoitering the impact of corporate governance on carbon emission disclosure in an emerging setting

Article

Mar 2024
Manag Law

Purpose This study aims to determine the influence of corporate governance characteristics on carbon emission disclosure in an emerging economy. Design/methodology/approach The study is based on S&P BSE 500 Indian firms for the period of 6 years from 2016–2017 to 2021–2022. The panel data regression models are used to gauge the association between corporate governance and carbon emission disclosure. Findings The empirical findings of the study support the positive and significant association between board activity intensity, environment committee and carbon emission disclosure. This evinced that the board activity intensity and presence of the environment committee have a critical role in carbon emission disclosure. On the contrary, findings reveal a significant and negative relationship between board size and carbon emission disclosure. Practical implications The present study provides treasured insights to regulators, policymakers, investors and corporate managers, as the study corroborates that various corporate governance characteristics exert significant influence on carbon emission disclosure. Originality/value The current research work provides novel insights into corporate governance and climate change literature that good corporate governance significantly boosts the carbon emission disclosure of firms. Previous studies examining the impact of corporate governance on carbon emission disclosure ignored emerging economies. Thus, the current work explores the role of governance mechanisms on carbon emission disclosure in an emerging context. Further, to the best of the author’s knowledge, the current study is the first of its kind to investigate the role of corporate governance on carbon emission disclosure in the Indian context.

Unraveling the impact of stakeholder pressure on carbon disclosure in an emerging economy

Article

Sep 2023

Purpose The purpose of this paper is to seek to shed light on the influence of stakeholder pressure on carbon disclosure in an emerging economy. Design/methodology/approach The present study is based on Bombay Stock Exchange 100 Indian firms for the period of 5 years from 2016–17 to 2020–21. The association between stakeholder pressure and carbon disclosure, along with certain control variables, has been explored through a regression model. Findings The results of the study suggest that stakeholders exert a significant influence on corporate carbon disclosure. Further results confirm that regulatory and customer pressure have the most significant and positive influence, while shareholders and creditors exert a significant and negative influence on carbon disclosure. The study also finds that employee pressure does not have any association with carbon disclosure. Practical implications This study adds to the existing literature on climate change, carbon disclosure and stakeholder pressure. Social implications The present study provides useful insights to corporate managers and policymakers as the study concludes that stakeholders exert a significant influence on carbon disclosure. Originality/value Previous studies examining the stakeholder pressure on carbon disclosure ignored emerging economies, while the present study has considered India, which is a developing as well as an emerging economy. Further, to the best of the authors’ knowledge, the current study is the first of its kind to investigate the stakeholder pressure on carbon disclosure in the Indian context. The present study develops a comprehensive index to measure corporate carbon disclosure.

Stakeholder pressure and greenhouses gas voluntary disclosures

Article

Jul 2021
Bus Strat Environ

This paper reports managers' perceived importance of various stakeholders’ pressure in their greenhouse gas (GHG) disclosure decisions. We also report on which stakeholders explain the variation in the extent of GHG disclosures. Further, evidence of how firm size moderates the relationship between some stakeholders and GHG disclosure is provided. Data were obtained through a mail survey of the UK's FTSE 100 listed firms, to which 62 firms responded. GHG disclosures within the respondents' annual reports were scored, and regression analysis was undertaken to determine if a relationship existed between actual GHG disclosures and the rating assigned to the stakeholders. The results indicate that the provider stakeholder group (shareholders, investors and community) is perceived to have the most significant influence on managers’ GHG disclosure decisions, followed by government regulators, organisational (employee, customers and suppliers) stakeholders, and social (competitors, NGOs and media) stakeholders, respectively. Regression results show a positive and significant relationship between perceived organisational and regulatory stakeholder pressure and actual GHG disclosures. However, the relationship between providers and social stakeholders and GHG disclosure is not significant. The findings further suggest that the relationships between organisational and regulatory pressure are moderated by firm size. The results have important implications for policymakers. <br/

The effect of ownership structure on social and environmental reporting in Nigeria: the moderating role of intellectual capital disclosure

Article

Mar 2021

Purpose This paper aims to examine the effect of ownership structure variables on social and environmental disclosure practice in Nigeria. The paper also investigates the moderating impact of intellectual capital disclosure on the relationship between ownership structure elements, social and environmental disclosure. Design/methodology/approach The paper adopted the Global Reporting Initiative (GRI) disclosure framework to extract social and environmental disclosure information from corporate social and environmental reports of 80 companies listed on the Nigerian Stock Exchange. The study spanned from 2012–2017. Management ownership, foreign ownership, block ownership and dispersed ownership are considered as determinants of social and environmental disclosure. A multiple regression analysis was used to test the relationships specified in the study. Findings The result of the descriptive analysis has shown evidence of a low-level disclosure of social and environmental information in corporate reports (annual reports and corporate social and environmental reports) of companies. From the regression analysis, block ownership, foreign ownership and dispersed ownership are found to enhance the disclosure of social and environmental information in the corporate report of companies. However, management ownership was found to be insignificantly related to social and environmental disclosure. The result also revealed that intellectual capital disclosure has a significant positive effect on the relationship between management ownership, foreign ownership and dispersed ownership, social and environmental disclosure. However, intellectual capital disclosure does not moderate the relationship between block ownership, social and environmental disclosure. Originality/value This paper is the first to empirically examine the moderating effect of intellectual capital disclosure on ownership structure variables, social and environmental disclosure. The result of the study offer researchers a better understanding of the impact of ownership structure variables on social and environmental disclosure. The findings are useful to researchers, corporate managers, policymakers and regulatory bodies.

Integrating stakeholder theory and sustainability accounting: A conceptual synthesis

Article

Dec 2020
J CLEAN PROD

This paper aims at integrating the bodies of literature on stakeholder theory and sustainability accounting. Using the conceptual methodological approach of theory synthesis, stakeholder theory is employed as a method theory to advance sustainability accounting as a domain theory. On this basis the concept of ‘Accounting for Sustainability and Stakeholders’ is developed. This concept highlights which sustainability topics and which stakeholders to consider in accounting for a given organization and how the inclusion of additional stakeholders and topics can contribute to creating value for stakeholders. In conclusion, this paper highlights that an overly broad inclusion of stakeholder groups and sustainability topics can be replaced by a purposeful selection of stakeholders and topics of particular relevance for the specific organization. As an additional advantage, the concept prevents disconnecting sustainability accounting from conventional accounting.

The Legitimacy Theory and the Legitimacy Gap

Chapter

May 2020

In this chapter, we discuss the legitimacy theory and the legitimacy gap. Organizations seek to be perceived by stakeholders as legitimate. Because legitimacy is a moving target, organizations have to be pragmatic. The legitimacy gap will be formed due to the concept of time, which informs the movement of expectations. As time progresses, the environment in which organizations operate will shift, which would create a shift in expectations. This change brings a shift to legitimacy, and this shift creates a “legitimacy gap”. On the basis of this, Lindblom (1994) defines the legitimacy gap as “the difference between the expectations of the relevant stakeholders relating to how an organization should act, and how the organization does act”. Essentially, two main sources of the legitimacy gap were outlined, namely, the changes in societal expectation and information asymmetry. We outlined the role of AI in moderating the legitimacy gap, specifically if the concept of information asymmetry is deemed the main driver of the gap. In the context of harvested and stored large data sets, we suggest that intelligent agents linked (connected) to the relevant data repositories would be updated on an ongoing basis as the new data is being captured or it becomes available through unstructured sources. This data would previously have been difficult to collate. We point out that social media and other sources would make it possible to harvest this data. We think that once harvested, AI-powered models will analyse it, which will assist organizations in predicting expectations. In cases where society is too weak, perhaps authorities could deploy the same technology on behalf of societies that are unable to, in order to reduce the information gap between the organization and the society.

The role of ownership structure in integrated reporting policies

Article

Mar 2020

Integrated reporting (IR) is used to demonstrate a firm's capacity to create value in the short, medium, and long term. It can better represent existing relationships between the company and its stakeholders, with a particular focus on investors. Attention to IR has grown considerably in recent years. However, studies on the determinants of IR quality are still limited. This study aims to bridge this literature gap by being the first study to analyse the role of ownership structure in IR context. To this end, it uses agency theory and is based on a sample of 152 international companies that have adopted IR. The results indicate a positive effect of institutional ownership and a negative effect of ownership concentration, managerial ownership and state ownership on the quality of integrated reports. These results are also consistent with the level of alignment of integrated reports with the framework. To our knowledge, this is the first study that analyses the role of ownership structure in the IR policies.

Carbon disclosure and financial performance: UK environmental policy

Article

Nov 2019
Bus Strat Environ

The outcome of carbon disclosure, the importance of which has grown remarkably in recent years to become a strategic decision-making issue for organisations in today's competitive environment, is a subject of lively debate but remains under-researched in the environmental accounting literature. This study is motivated by this research gap and the growing interest in assessing the financial consequences of corporate involvement in climate change beyond regulatory compliance, as evidenced by firms' voluntary participation in the Carbon Disclosure Project. Using the resource-based view of the firm as a theoretical framework and linking it to carbon disclosure through Carbon Disclosure Project, we conceptualise and empirically investigate the impact of adopting proactive carbon management policies and communicating them to stakeholders, focusing on the financial performance of the top FTSE350 companies between 2007 and 2015. By developing a comprehensive financial performance index and controlling for several firm characteristics, we find strong evidence that voluntary carbon disclosure is positively associated with firm financial performance. The findings in this paper provide new insights and policy implications for managers, financial stakeholders, and regulators.

The content and determinants of greenhouse gas emission disclosure: Evidence from Indonesian companies

Article

Jul 2018

This paper examined the content and determinants of greenhouse gas (GHG) emissions disclosure practices. This study found that number of firm disclosed is increased from 42.9% in 2011 to 48.1% in 2014. The assesment of risks and opportunities of climate change theme is the most item disclosed. Miscellaneous industries disclosed more GHG emissions information compared to any other industry. The results also show that profitability, leverage, company size and industry are significant determinants that can explain the extent of GHG emissions disclosure. The findings of this study indicated that GHG emissions disclosures are used as a mechanism to reduce pressures from stakeholders.This study contributes to the GHG emissions disclosure literature by providing patterns and determinants of companies’ GHG emissions disclosure in an emerging country.

Corporate governance and carbon transparency: Australian experience

Article

Jul 2018
Account Res J

Purpose The purpose of this article is to explore the association between corporate governance mechanisms and the extensiveness of carbon disclosure Design/methodology/approach Using Ordinary Least Squares (OLS) regression model with data from 2009 to 2012 for largest Australian companies that voluntarily disclose their information to the CDP Findings We find that board independence, board diversity and managerial ownership are significantly correlated with the degree of carbon transparency while the existence of environmental committee is not. Practical implications our findings should be useful for government and capital market regulators who concern the quality of CG and carbon actions. First, our evidence suggests that current CG practice that emphasise board diversity and independence seems encouraging an environment friendly decision and adopt carbon reduction initiatives. Second, however, the current version of CG codes need more stress on none financial goals that should help corporate executives to balance value enhancement vis-à-vis ecosystem protection. Finally, another implication for policy makers is corporate governance should be re-structured so motivate firms to pursue long term sustainable development instead of taking short sight view of firm performance Originality/value The study contributes in the increasing body of literature indicating that corporate governance encourages a proactive corporate strategy in general and carbon disclosure in particular. We add new empirical evidence which has policy implication that corporate governance should be improved so as to encourage executives to engage in more sustainable development and stakeholder long term value protection.

The Factors Motivating Voluntary Disclosure of Carbon Information: Evidence Based on Italian Listed Companies

Article

Apr 2017

The purpose of this research is to examine how environmental committees, institutional shareholdings, and board independence affect managerial carbon disclosure decisions, particularly those of firms belonging to highly polluting industries. We focus on Italian firms that operate in a code law environment but that have the option either to adopt the unitary corporate structure prevalent in common law countries or to retain the dual corporate structure used in code law countries. We use weighted and unweighted carbon disclosure indexes based on the Kyoto Protocol requirements. The findings show that all factors greatly affect voluntary carbon disclosure and that their impact is especially strong for firms in highly polluting industries. This study has important implications for managers and regulators.

Does stakeholder pressure influence corporate GHG emissions reporting? Empirical evidence from Europe

Article

Sep 2015
Account Audit Account J

Purpose – The purpose of this paper is to seek to shed light on the practice of incomplete corporate disclosure of quantitative Greenhouse gas (GHG) emissions and investigates whether external stakeholder pressure influences the existence, and separately, the completeness of voluntary GHG emissions disclosures by 431 European companies. Design/methodology/approach – A classification of reporting completeness is developed with respect to the scope, type and reporting boundary of GHG emissions based on the guidelines of the GHG Protocol, Global Reporting Initiative and the Carbon Disclosure Project. Logistic regression analysis is applied to examine whether proxies for exposure to climate change concerns from different stakeholder groups influence the existence and/or completeness of quantitative GHG emissions disclosure. Findings – From 2005 to 2009, on average only 15 percent of companies that disclose GHG emissions report them in a manner that the authors consider complete. Results of regression analyses suggest that external stakeholder pressure is a determinant of the existence but not the completeness of emissions disclosure. Findings are consistent with stakeholder theory arguments that companies respond to external stakeholder pressure to report GHG emissions, but also with legitimacy theory claims that firms can use carbon disclosure, in this case the incomplete reporting of emissions, as a symbolic act to address legitimacy exposures. Practical implications – Bringing corporate GHG emissions disclosure in line with recommended guidelines will require either more direct stakeholder pressure or, perhaps, a mandated disclosure regime. In the meantime, users of the data will need to carefully consider the relevance of the reported data and develop the necessary competencies to detect and control for its incompleteness. A more troubling concern is that stakeholders may instead grow to accept less than complete disclosure. Originality/value – The paper represents the first large-scale empirical study into the completeness of companies’ disclosure of quantitative GHG emissions and is the first to analyze these disclosures in the context of stakeholder pressure and its relation to legitimation.

Climate change disclosure: Moving towards a brave new world

Article

Sep 2008

Corporate Ownership and Environmental Proactivity

Article

Oct 2014
Bus Strat Environ

The present paper advances knowledge of the drivers of firms' proactive environmental strategies. In particular, it explores the relationship between different corporate ownership structures and firms' green proactivity, in order to see whether some types of shareholder act as a stimulating driver for firms' proactive environmental behaviors. The study examines the explanatory power of corporate governance issues, such as a firm's ownership structure, as potential determinants of companies' environmental proactivity. Attention is focused on the European firms included into the Carbon Disclosure Project questionnaire 2012. The results show that ownership structure matters in firms' environmental proactivity. In particular, firms with a higher percentage of state ownership present superior green proactivity, while ownership concentration appears negatively related to proactive environmental strategy. The paper offers theoretical and practical implications. It focuses attention on a still underdeveloped research area, namely organizations and their relationship with the natural environment, including corporate ownership as a driver of a company's proactive environmental strategy. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment

An analysis of Australian company carbon emission disclosures

Article

Apr 2013
Pac Account Rev

Purpose – This study aims to report the extent of voluntary carbon emission disclosures by major Australian companies during the years 2006 to 2008. This paper provides contemporary data and explanations about carbon emissions reporting in Australia. Additionally, the paper aims to determine the variables that explain the extent of carbon disclosures. Design/methodology/approach – The carbon disclosure score is measured directly from individual companies' annual reports and sustainability reports. A checklist is established to determine the breadth and depth of the information related to climate change and carbon emissions incorporated in these publicly available reports. Findings – The overall carbon disclosure score has increased significantly over the authors' research period. Furthermore, regression results show that larger firms with higher visibility tend to make more comprehensive carbon disclosures. Overall, the authors' results indicate that the legislation of the National Greenhouse and Energy Reporting Act (the NGER Act) in 2007 may have enhanced the voluntary carbon emission disclosures in 2008, even though the NGER Act was not operative until the 2009 financial year. From a theoretical perspective, the findings of the paper are consistent with legitimacy theory. Originality/value – Previous studies examining environmental disclosures in Australia are based on a time period prior to widespread public discussion and interest in climate change and carbon emissions. By investigating voluntary disclosures made by large Australian companies around the time that the mandatory emission reporting scheme was introduced, this paper investigates whether the prominence of discussion and impending operation of the mandatory environmental disclosures have led to a greater extent of voluntary carbon disclosures. The findings can help regulators draft appropriate legislation that targets industries and specific practices where disclosure is of greatest importance to relevant stakeholders. In addition, an understanding of who and why entities disclose carbon gas emission information can arm green groups and other stakeholders with an appropriate level of understanding about the motivation for such disclosures.

The current status of greenhouse gas reporting by Chinese companies: A test of legitimacy theory

Article

Dec 2012
Manag Audit J

Purpose – The purpose of this paper is to investigate the factors driving greenhouse gas reporting by Chinese companies. Design/methodology/approach – Content analysis of annual reports and corporate social responsibility (CSR) reports for the year 2010 of the top 100 A-share companies listed on Shanghai Stock Exchange was conducted to investigate the extent of greenhouse gas reporting. Multiple regression analysis was performed to determine the factors driving these companies’ greenhouse gas reporting. Findings – It was found that most Chinese companies reported neutral and good news. The results also indicate larger companies operating in an industry which has higher level of carbon dioxide emissions tend to have higher levels of greenhouse gas disclosures, consistent with the expectation of legitimacy theory. However, profitability and overseas listing were not significantly related to greenhouse gas reporting. This is consistent with the findings of previous literature. Finally, contrary to expectations, state-owned companies report less greenhouse gas information than private companies. Originality/value – The paper contributes towards theory development by testing legitimacy theory in the context of greenhouse gas reporting by Chinese companies and contributes to existing literature on greenhouse gas reporting by focussing on the large emerging economy of China. The practical contribution of the paper rests in the area of accounting practice. The results outline the dearth in greenhouse gas reporting by Chinese companies, suggesting there needs to be future development of accounting standards in this area.<br /

Determinants of Corporate Social Disclosure in Developing Countries: The Case of Qatar

Article

Dec 2006
Adv Int Account

In this study, an attempt is made to test the validity of theories employed in the literature to explain variation in the extent of corporate voluntary disclosure within the corporate social disclosure context. The annual reports of 21 out of the 22 companies listed on the Doha Stock Exchange in Qatar were used as a basis for the study. Variations in corporate social disclosure by the sampled Qatari companies are found to be associated with firm size measured by the firm's market capitalisation, business risk measured by leverage and corporate growth. The outcome of the study lends partial support to agency theory, political economy theory, legitimacy theory, stakeholder theory as well as the accountability approach.

Ownership structure and corporate social responsibility disclosure: Some Malaysian evidence

Article

Jun 2007
Corp Govern

Nazli A. Mohd Ghazali

Purpose The purpose of this article is to examine the influence of ownership structure on corporate social responsibility (CSR) disclosure in Malaysian company annual reports (CARs). Design/methodology/approach The study uses a CSR disclosure checklist to measure the extent of CSR disclosure in annual reports and a multiple regression analysis to examine the association between ownership structure and the extent of CSR disclosure in annual reports. Findings The paper finds that, even among the larger and actively traded stocks in Malaysia, there is considerable variability in the amount of social activities disclosed in corporate annual reports. Results from multiple regression analysis show that, consistent with expectations, companies in which the directors hold a higher proportion of equity shares (owner‐managed companies) disclosed significantly less CSR information, while companies in which the government is a substantial shareholder disclosed significantly more CSR information in their annual reports. Research limitations/implications The sample for this study comes from larger and actively traded stocks on the Bursa Malaysia. Thus, the results may not be generalizable to smaller and less actively traded stocks. Practical implications The findings appear to suggest that the level of CSR disclosure in annual reports of companies depends on the extent of “public pressure” faced by each company. The results also raise the question of whether corporate involvement in social activities should be made a mandatory disclosure in annual reports to better assess the extent of “corporate citizenship” of Malaysian companies. Originality/value The study finds that ownership structure, which had been ignored in prior studies on factors influencing CSR disclosure, has an impact on CSR disclosure.

The Limits of Carbon Disclosure: Theorizing the Business Case for Investor Environmentalism

Article

May 2011
GLOBAL ENVIRON POLIT

Adam Harmes

This article examines the potential effectiveness of socially responsible investment (SRI) and investor environmentalism through carbon disclosure in terms of their key goal of creating real financial incentives, through share price performance, for firms to pursue climate change mitigation. It does so by theoretically assessing the two main assumptions which underpin investor environmentalism as promoted by SRI funds and NGOs such as the Carbon Disclosure Project: those concerning the power of institutional investors, and the "“business case"” for climate change mitigation. In doing so, it argues that the potential of using institutional investors to create real financial incentives for climate change mitigation, in the form of share price performance, has been considerably overestimated and that there is not even a strong theoretical case for why carbon disclosure should work in this regard. This is argued based on the structural constraints faced by most institutional investors, as well as the fundamentally incorrect assumption about climate change, that it is a form of market failure, which theoretically underpins these initiatives. (c)© 2011 by the Massachusetts Institute of Technology.

When Does Institutional Investor Activism Increase Shareholder Value?: The Carbon Disclosure Project

Article

Jan 2011
BE J ECON ANAL POLI

This paper presents the first empirical test of the financial impacts of institutional investor activism towards climate change. Specifically, we study the conditions under which share prices are increased for the Financial Times (FT) Global 500 companies due to participation in the Carbon Disclosure Project (CDP), a consortium of institutional investors with

57 trillion in assets. We find no systematic evidence that participation, in and of itself, increased shareholder value. However, by making use of Russiaâ€™s ratification of the Kyoto Protocol, which caused the Protocol to go into effect, we find that companiesâ€™ CDP participation increased shareholder value when the likelihood of climate change regulation rose. We estimate the total increase in shareholder value from CDP participation at

8.6 billion, about 86% of the size of the carbon market in 2005. Our findings suggest that institutional investor activism towards climate change can increase shareholder value when the external business environment becomes more climate conscious.

Sustainability Accounting and Reporting: Development, Linkages and Reflection. An Introduction

Chapter

Jan 2006

Companies are key contributors to economic, environmental and social well- being. Corporate activities pervade the present and are likely to be critical in the future, so that corporate sustainability is necessary for long-term sustain- able development of the economy and society. In this context, sustainability accounting and reporting which serve the collection, analysis and communication of corporate sustainability information become crucial triggers for management towards corporate sustainability. If corporate sustainability is seen as being the result of management attempts to address sustainability challenges, then it makes sense to discuss and define sustainability accounting and reporting on the basis of the challenges embedded in the sustainability triangle and addressed by cornerstone publications. This chapter concludes with a discussion of the link between accounting and reporting and the question of whether reporting is, or should be, driven by accounting, or conversely whether accounting is or should be driven by reporting.

Drivers of Environmental Disclosure and Stakeholder Expectation: Evidence From Taiwan

Article

Oct 2010

This article investigates stakeholder expectations associated with corporate environmental disclosure. Several articles have studied the effect that stakeholder pressure has on environmental disclosing strategies. In this article, we extend previous research to an examination of the influence of external, internal, and intermediary stakeholder groups or constituencies in turn to clarify the demands of multiple stakeholders as to firms’ disclosure of sufficient and adequate environmental information. The sample comprised Taiwanese firms listed on the Taiwan Stock Exchange. Our results show that the level of environmental disclosure is significantly affected by stakeholder groups’ demands. External stakeholder groups, such as the government, debtors, and consumers, exert a strong influence over management intentions regarding the extent of environmental disclosure. Internal stakeholder groups, such as shareholders and employees, impose additional pressures on firms to disclose environmental information. As for intermediate stakeholder groups, environmental protection organizations, and accounting firms, these can greatly influence managerial choices regarding their environmental disclosure strategies. Key wordsenvironmental disclosure-stakeholder expectations-stakeholder analysis-environmental accounting-disclosure strategy-Taiwan

The Determinants and Characteristics of Voluntary Internet-based Disclosures by Listed Chinese Companies

Article

May 2004
J Account Publ Pol

This paper analyzes the factors behind Chinese listed companies' voluntary adoption of Internet-based financial reporting, as well as their extent of disclosure. Factors identified as being relevant to voluntary disclosure choices in the more advanced market economies are included. In addition, theories on innovation diffusion and voluntary disclosure are used to generate hypotheses about factors specific to the Chinese context, such as type of auditor, foreign listing, different classes of stock ownership, and government regulation. Findings from the largest 300 listed Chinese companies support the proposition that these firms' Internet-based disclosure choices are responsive to specific attributes of their environment. The implications of the findings for policy and research are delineated.

Disclosure Timing: Determinants of Quarterly Earnings Release Dates

Article

Sep 2004

Partha Sengupta

Existing research on discretionary disclosures provides valuable insights on the potentials causes and consequences of alternative forms of disclosure. However, relatively little is known about how managers choose to time the release of financial information. This paper focuses on the quarterly earnings release dates and investigates why some choose to release earnings information relatively early, compared to others. The results indicate that the reporting lag (days between fiscal period end and quarterly earnings release date) is shorter for firms facing greater demand for information from investors and greater litigation costs. The reporting lag, however, is longer for firms with greater block ownership and those whose operations are somewhat more complex.

Corporate Governance and Voluntary Disclosure

Article

Feb 2003
J Account Publ Pol

This paper examines the impact of ownership structure and board composition on voluntary disclosure. Ownership structure is characterized by managerial ownership, blockholder ownership and government ownership, and board composition is measured by the percentage of independent directors. Voluntary disclosure is proxied by an aggregated disclosure score of non-mandatory strategic, non-financial and financial information.Our results show that ownership structure and board composition affect disclosure. We find that lower managerial ownership and significant government ownership are associated with increased disclosure. However, blockholder ownership is not related to disclosure. An increase in outside directors reduces corporate disclosure. We also find that larger firms and firms with lower debt had greater disclosure.

Does ownership structure affect carbon emission disclosure?

Abstract

No full-text available

Recommended publications

Corporate boards, audit committees and voluntary disclosure: Evidence from Italian Listed Companies

Shareholder's Wealth Effect of Rights Issues of High Ownership Concentrated Firms