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THE INFLUENCE OF CORPORATE GOVERNANCE MECHANISMS ON CARBON EMISSION DISCLOSURE: DOES GREEN PERFORMANCE MATTER?
Abstract
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.
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Purpose
This study examines the effects of corporate governance mechanisms on voluntary corporate carbon disclosure in Bangladeshi firms.
Design/methodology/approach
To investigate the association between corporate governance mechanisms and corporate carbon disclosures, this study employs ordinary least square (OLS) methods. To mitigate the potential endogeneity concerns, the authors also introduce firm fixed effect (FE) and random effect (RE). Primarily, the study sample includes 250 firm-year observations over the period 2015–2019 for listed companies on the Dhaka Stock Exchange (DSE) in Bangladesh. Subsequently, corporate governance mechanisms that influence voluntary carbon disclosure were examined using both univariate and OLS models.
Findings
The findings of this study suggest that firms with a larger board size and more independent directors have a positive impact on the firm's intensity to disclose carbon-related information. However, no evidence has been found of the existence of an environmental committee, and the presence of female directors on the board tends to be associated with a higher level of voluntary corporate carbon disclosure.
Originality/value
The study offers necessary evidence of the determinants of corporate carbon disclosures, which will be useful for managers, senior executives, policymakers and regulatory bodies. To improve corporate governance practices and formulate separate sets of regulations and reporting criteria, disclosing extensive and holistic carbon-related information obligatory. Further, the outcomes of this study based on Bangladeshi firms can be comprehensive for other developing countries to take precautions to tackle the effect of global climate change.
We examine the interrelationships among board sustainability committees, process-based climate change initiatives, outcome-based carbon performance, and market value through the lens of economic-and social-based theoretical perspectives. Using a panel dataset of 8,408 observations from 35 countries between 2002 and 2019, we find that higher levels of actual greenhouse gas (GHG) emissions are negatively associated with market value. Further, we reveal a positive association between process-based climate change initiatives and market value. We then provide evidence that process-based climate change initiatives are positively related to increased levels of GHG emissions. We also observe that the presence of a board sustainability committee has a positive impact on market value, but does not seem to improve outcome-based carbon performance. Finally, we show that the predicted relationships vary across different country-groups, sector-groups, and periods. Our empirical findings are robust to alternative measures, endogeneities, and sample selection bias. Overall, our evidence supports the symbolic legitimation/greenwashing view in that firms are likely to employ process-based climate change initiatives under a symbolic approach to create positive impressions among stakeholders and protect their legitimacy.
This research aims at examining the effect of the board of directors, audit committee, managerial ownership, and institutional ownership on financial distress in manufacturing companies listed on the Indonesia Stock Exchange for the 2015-2020 period. The population in this research are manufacturing companies listed on the Indonesia iStock iExchange for the i2015-2020 period. The sampling technique in this research used a purposive sampling technique and obtained a sample of i13 companies with a total of 78 data observations. The data analysis method used is multiple regression analysis. The results of this research indicated that institutional ownership affected financial distress, while the board of directors, audit committee, managerial ownership, and independent commissioner did not affect financial distress.
Investor needed the information about financial performance in order to predict the price and return of stock. This study aims to find out the effect of financial leverage and liquidity on Good Corporate Governance (GCG) and return of stock in the manufacture companies listed in Indonesia Stock Exchange during the period of 2013-2017. The method of descriptive and verifiative are used in this study by using 94 samples determined by purposive sampling technique. A secondary data is used and analyzed by using panel data regression model and moderated regression analysis. The result showed that simultenously, financial leverage and liquidity effected negatively and significantly to the return of stock. Partially, leverage effected negatively and significantly, as well as liquidity but insignificantly. The GCG is able to moderated a simultaneous effect of financial leverage and liquidity on return of stock to be positive, but insiginificatn. However, GCG effected positively and significantly.
Tingkat pengungkapan CSR di Indonesia masih tergolong rendah karena kurangnya komitmen perusahaan dalam melaksanakan kegiatan CSR. Penerapan GCG diindikasikan dapat mendorong pelaksanaan CSR perusahaan karena adanya hubungan antara GCG dengan CSR. Penelitian ini bertujuan untuk menguji pengaruh mekanisme GCG (proporsi komisaris independen, jumlah komite audit, kepemilikan manajerial) dan transparansi perusahaan baik secara simultan maupun parsial terhadap pengungkapan CSR. Penelitian ini menggunakan perusahaan yang terdaftar dalam Indeks SRI KEHATI di Bursa Efek Indonesia tahun 2013-2015 sebagai populasi. Teknik pemilihan sampel menggunakan purposive sampling dan metode analisis menggunakan regresi data panel. Hasil penelitian ini menunjukkan bahwa mekanisme GCG dan transparansi perusahaan secara simultan berpengaruh signifikan terhadap pengungkapan CSR. Secara parsial proporsi komisaris independen dan transparansi perusahaan berpengaruh signifikan dengan arah negatif terhadap pengungkapan CSR, sedangkan jumlah komite audit dan kepemilikan manajerial tidak berpengaruh terhadap pengungkapan CSR.
This study presents a corpus-based comparison of the Chief Executive Officer (CEO) statements between annual reports and corporate social responsibility (CSR) reports. Using a corpus of 209 CEO statements from annual reports and CSR reports of Chinese companies, this study employs the Discourse-Historical Approach of critical discourse analysis to investigate the nomination strategies and key topics in these two related reports. The results showed that corporate leaders tend to have different priorities in annual reports and CSR reports. In annual reports, corporate leaders highlight the economic and pragmatic concerns of stakeholders to create a professionally capable and objective corporate image. In CSR reports, corporate leaders highlight the ethical concerns of stakeholders to create a socially responsible corporate image and adopt a more engaging and affiliative voice through the use of first-person pronouns. This study has significance in understanding the differences in the related genres of annual reports and CSR reports for the stakeholders.
Awareness of environmental issues and stakeholder expectations has led organizations to be concerned about the impact of their products, processes and packaging on the natural environment. Environmental sustainability has become an essential tool for the competitive advantage of firms. Organizations need to bring about cultural transformation to sustain competitive advantage. This orientation has brought green organizational culture to centre stage as firms seek to institutionalize and incorporate environmental focus throughout the organization. The belief that integrating environmental concerns with organizational culture should result in sustainable competitive advantage mandates that firms measure the extent of ‘greening’ of the culture. Literature review reveals that ‘green organizational culture’ has begun to receive attention in recent years. However, a standardized and empirically validated instrument is not available for measuring the extent to which green values are internalized throughout the firm. The present study aims to fill this gap by developing a questionnaire to study green organizational culture (GOC). The model proposed by Harris and Crane (2002 , Journal of Organizational Change Management, vol. 15, pp. 214–234) is used as a basis for questionnaire development. A two-stage method of structural equation modelling in AMOS 23 is employed for data analysis. Exploratory factor analysis in SPSS reveals three dimensions of the construct measured by two items. Confirmatory factor analysis confirms the factor structure. The instrument satisfies the conditions of convergent and discriminant validity and the model fulfils the criteria for model fitness. Measurement of green organizational culture has important implications for creating and reinforcing greening through human resource policies and practices.
The UK's 2050 net-zero emission target is one of the most ambitious goals in the world. Organisations should play a vital role by communicating a sufficient level of carbon emission information with the stakeholders. Motivated by the necessity of measuring the level of carbon disclosure, this paper provides a unique carbon emission disclosure measurement based on a sample of UK firms from 2013 to 2019. We apply different methods to assess the validity and reliability of our developed measurement. The results suggest that our measurement captures the actual CO2 emission, including scope 1, scope 2, and also captures the environmental, social and governance (ESG) score. Additionally, we explore the association between capital expenditure, corporate governance and the level of carbon emission disclosure. Further, the results show a positive relationship between capital expenditure and carbon emission disclosure. Also, there is a significant positive relationship between internal governance and carbon emission disclosure. Moreover, the analysis suggests that internal governance strengthen the relationship between capital expenditure and carbon emission disclosure. We also use quantile regression, and the findings show that capital expenditure and internal governance have a positive impact on carbon emission disclosure under all quantiles. Our data suggest that capital expenditure declines within the UK by around 53% over the last six years. Following the reduction in capital expenditure, the results demonstrate 39% decline in the CO2 emission level. The results also indicate that for every $1 million capital expenditure, approximately 2.75 Metric tons of carbon dioxide (MtCO2) emissions increase. Business investment is around 70% of the UK's total investment. Therefore, the reduction in capital expenditure is one of the primary reasons that might explain the decrease in the UK's overall CO2 emission level. The unique findings of this paper are relevant to the government, management and standard-setters.
The purpose of this research was to examine the relationship between firm size, corporate governance, and carbon emission disclosure (CED) in Indonesia, a country with rich natural resources. This study focused on the mining and agricultural industries to better capture the disclosure behavior of companies directly engaged in natural resources. Using a sample of 305 firm-year observations of listed firms in Indonesia spanning from 2011 to 2016, the results show that larger firms and firms with larger board sizes are more likely to have higher disclosure on CED. We also showed that firms with a higher percentage of independent commissioners and directors are less likely to disclose information related to carbon emissions. These findings indicate that a greater number of commissioners and directors sitting on the board will stimulate a firm's decision to make a higher number of disclosures related to carbon emissions. However, the increased percentage of independent commissioners and directors will cause more conservative disclosure outcomes to the firms. In addition, firms in the mining industry are more likely to have a higher level of CED relative to firms in the agricultural industry. These findings remained robust even after we corrected the standard errors.
This study aims to examine and obtain empirical evidence on determinants of carbon emissions disclosure at mining companies listed in Indonesia Stock Exchange. Several factors involved in this study, there are leverage, profitability, firm size, and institutional ownership. In addition, population of this study is 41 mining companies listed in Indonesia Stock Exchange. Meanwhile, sample is selected using purposive sampling technique which produced 56 unit of analysis. This study also uses content analysis techniques on annual reports and/or sustainability reports in 4 years to measure carbon emission disclosure. Data collection is conducted by documentation technique. Moreover, multiple rank regression with SPSS version 23 applications is executed to analyze the data. Results indicate that leverage, profitability, firm size, and institutional ownership have significant and negative effect on carbon emission disclosure. Therefore, it can be concluded that the higher leverage, profitability, firm size, and institutional ownership of the company, carbon emission disclosure which is reported by mining companies in Indonesia will be lower. Keywords: Carbon Emission Disclosure; Firm’s Size; Institutional Ownership; Leverage; Profitability
Purpose
The purpose of this study is to investigate whether corporate governance characteristics impact the voluntary disclosure of carbon emissions.
Design/methodology/approach
This empirical research was carried out in two stages. Initially, the carbon disclosures data were sourced from the annual and stand-alone sustainability reports of Turkish non-financial companies listed on Borsa Istanbul during 2011-2015. Later, the corporate governance characteristics that influence carbon disclosures were examined using panel data regression models.
Findings
The empirical findings of this study suggested that entities with a higher number of independent directors on their boards were more likely to respond to the Carbon Disclosure Project. In addition, board nationality diversity and the existence of a sustainability committee had a significant positive impact on the propensity to disclose carbon emissions and the extent of those disclosures.
Originality/value
This research provides empirical evidence of the determinants of carbon emission disclosures, which could be useful for organizations and regulatory bodies. Such an understanding is crucial to specify necessary policies that will provide emission reduction practices and policies for entities. This paper fills some of the gap in the literature by concentrating on the association between corporate governance characteristics and disclosures of a more specific environmental issue, being carbon emissions.
We apply institutional and board capital theory to examine whether women on boards are associated with disclosure and quality of corporate greenhouse gas (GHG) emissions related reporting. We examine the research problem in Australia in a period when no requirements existed for listed companies to appoint female directors or to report GHG emissions. This environment allows us to examine the association between women on boards and GHG emissions related disclosure in annual and sustainability reports in a voluntary setting. We find that companies with multiple female directors make GHG emissions related disclosures that are of higher quality.
This paper offers the first large-scale empirical study of organizational virtue as perceived by both internal and external stakeholders (employees and customers, respectively) and of the links between these virtues and organizational outcomes such as identification, satisfaction, and distinctiveness. It takes a strategic approach to virtue ethics, one that differs from a more traditional Aristotelian concept of virtue and from Alasdair MacIntyre’s manner of distinguishing between internal and external goods. The literature review compares three different perspectives on the empirical study of organizational virtues, taken by virtue theorists, POS scholars, and strategy scholars. The main study describes an empirical research undertaking that involved the analysis of 2548 usable questionnaires administered to employees and customers of seven organizations in the U.K. A structural equation model was used to test the linkages of the six dimensions of organizational virtue (empathy, warmth, integrity, conscientiousness, courage, and zeal) to satisfaction, identification, and distinctiveness. All the links were significant, with the strongest between virtue and identification. For employees, identification (with a firm) was driven most significantly by integrity, whereas customers’ identification was principally influenced by empathy. The empirical finding also sounds an alarm bell to the global firms who focus on creating a differentiated image based on CSR in the hope that it will lead to satisfaction. The results lead to a discussion of how companies might build favorable stakeholder perceptions of key dimensions of virtue that most shape their identification and differentiation in the marketplace.
This paper investigates the effect of female representation on the board of directors on corporate response to stakeholders’ demands for increased public reporting about climate change-related risks. We rely on the Carbon Disclosure Project as a sustainability initiative supported by institutional investors. Greenhouse gas emissions measurement and its disclosure to investors can be thought of as a first step toward addressing climate change issues and reducing the firm’s carbon footprint. Based on a sample of publicly listed Canadian firms over the period 2008–2014, we find that the likelihood of voluntary climate change disclosure increases with women percentage on boards. We also find evidence that supports critical mass theory with regard to board gender diversity. These findings reinforce initiatives being undertaken around the world to promote gender diversity in corporate governance while demonstrating board effectiveness in stakeholder management.
This paper aims to contribute to a greater understanding of the theory of virtue ethics and its applications in the business arena. In contrast to other prominent approaches to ethics, virtue ethics provides a useful perspective in making sense of various business ethics issues with an emphasis on the moral character of the individuals and its transformational influences in driving ethical business conduct. Building on Geoff Moore’s (Bus Ethics Q 12(1):19–32, 2002; Bus Ethics Q 15(2):237–255, 2005; Bus Ethics Q 18(4):483–511, 2008) treatment of Alasdair MacIntyre’s practice–institution schema, the paper discusses how individuals, as moral agents, can serve to promote virtuous business conduct and help foster a moral and ethical climate in the organization and in society at large. Using interview data from a broader study of the New Zealand wine industry as explanatory examples, the paper argues that while many companies’ sustainable practices are still largely market based, such excellent business practices are often driven by individuals’ moral and ethical pursuits.
This study examines the impact of board diversity on firms’ corporate social responsibility (CSR) performance. Using seven different measures of board diversity across 1,489 U.S. firms from 1999 to 2011, the study finds that board diversity is positively associated with CSR performance. Board diversity is associated with a greater number of areas in which CSR is strong and a fewer number of areas in which CSR is a concern. These findings support the stakeholder theory and are consistent with the view that board diversity enhances firms’ ability to satisfy the needs of their broader groups of stakeholders. We find that gender, tenure, and expertise diversities seem to be the driving factors of firms’ CSR activities. Furthermore, we find that board diversity significantly increases CSR performance by increasing CSR strengths and reducing CSR concerns for firms producing consumer-oriented products and firms operating in more competitive industries. Our results remain robust using different measures of CSR performance, different estimation methods, and different samples.
This paper examines the impact of corporate board’s characteristics on the voluntary disclosure of greenhouse gas (GHG) emissions in the form of a Carbon Disclosure Project report. Using both univariate and regression models with a sample of the 329 largest companies in the United Kingdom, we find a significant positive association between gender diversity (measured as the percentage of female directors on the board) and the propensity to disclose GHG information as well as the extensiveness of that disclosure. In addition, a board with more independent directors or environmental committee show a higher tendency to be ecologic transparent. However, if the committee is not sufficiently large, independent or active, its effect seems insignificant. The results are consistent with stakeholder theory, suggesting that a diversified and independent board and the existence of a board-level environmental committee may balance a firm’s financial and non-financial goals with limited resources and moderate the possible conflicting expectations of stakeholders who have disparate interests. The findings should be useful for top managers and regulators who are interested in improving corporate governance practices and climate-change strategies.
Purpose
The purpose of this study is to shed light on the influence of climate governance on carbon emission disclosure.
Design/methodology/approach
This study is based on S&P BSE 500 Indian firms over six years, i.e. from 2016–2017 to 2021–2022. The panel regression has been used to determine the association between climate governance and carbon emission disclosure.
Findings
The results of this study suggest that climate governance exerts a significant influence on corporate carbon emission disclosure. Moreover, results corroborate that climate governance elements such as the environment committee, carbon strategy and environment management system are critical contributors to carbon emission disclosure.
Practical implications
This study adds to the emerging literature on climate change, carbon emission disclosure, corporate governance and climate governance.
Social implications
This work provides valuable insights to corporate managers and policymakers as the study concludes that climate governance enhances firms’ carbon emission disclosure.
Originality/value
Earlier literature has examined the influence of corporate governance on carbon emission disclosure. However, this study extends to the corporate governance literature by providing novel insights into how integrating climate governance elements into corporate governance can influence carbon emission disclosure. Moreover, to the best of the authors’ knowledge, this study is the first to explore the association between climate governance and carbon emission disclosure in the Indian context.
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.
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.
Purpose
The principal research objective entails examining the nexus between green supplier selection and green performance while scrutinizing the moderating role of governance mechanisms, specifically process control and outcome control, in shaping this association.
Design/methodology/approach
To assess our hypotheses, this study obtained data from Chinese manufacturing sectors and utilized regression analysis on a dataset consisting of 295 samples.
Findings
This study enriches the sustainable supply chain management literature by emphasizing the influence of green supplier selection on a firm’s green performance and the moderating effects of outcome and process control, offering practical insights for industry professionals.
Originality/value
This study enriches the sustainable supply chain management literature by emphasizing the influence of supplier selection on a firm’s environmental performance and the moderating effects of outcome and process control, offering practical insights for industry professionals.
Purpose
Consumers and businesses are becoming increasingly conscious of sustainable business practices and are often willing to pay a premium for responsibly sourced and manufactured products. Many countries and organizations have implemented regulations and standards for sustainability and companies face penalties or are barred from exporting for not meeting the requirements. Rooted in the resource-based view theory, this study aims to test a moderated mediation model to improve the sustainability performance of exporting firms.
Design/methodology/approach
Textile firms generating more than 25% of export revenues were targeted for this research. The data collected from 245 middle management-level employees were tested for reliability and validity. The structural equation modelling in AMOS 26 was used to test hypotheses.
Findings
Organizational readiness for green innovation (ORGI) has a direct positive effect on sustainability performance. The mediation analysis implies that ORGI translates into sustainability performance through improvement in green innovation performance. The moderating effect of knowledge integration highlights the importance of being prepared internally and actively seeking and incorporating external knowledge to improve green innovation performance.
Originality/value
The findings offer a solid foundation for informed decision-making, policy development and strategies to improve sustainability performance while aligning with the global nature of the textile industry and its inherent challenges. The proposed model and practical implications guide policymakers and managers of exporting firms to foster a culture of green innovation to leverage the effect of their readiness for green innovation on sustainability performance.
Purpose
This study aims to exploit Tobin’s Q model of investment to examine the relationship between corporate governance and green innovation.
Design/methodology/approach
The study is based on a sample of 3,896 firms from 2002 to 2021, covering 45 countries worldwide. The authors adopt Tobin’s Q model to conceptualize the relationship between corporate governance and investment in green research and development (R&D). The authors argue that agency costs and financial market frictions affect corporate investment and are fundamental factors in R&D activities. By limiting agency conflicts, effective governance favors efficiency, facilitates access to external financing and encourages green innovation. The authors analyzed the causal effect by using the system-generalized method of moments (system-GMM).
Findings
The results reveal that the better the corporate governance, the more the firm invests in green R&D. A 1%-point increase in the corporate governance ratings leads to an increase in green R&D expenses to the total asset ratio of about 0.77 percentage points. In addition, an increase in the score of each dimension (strategy, management and shareholder) of corporate governance results in an increase in the probability of green product innovation. Finally, green innovation is positively related to firm environmental performance, including emission reduction and resource use efficiency.
Practical implications
The findings provide implications to support managers and policymakers on how to improve sustainability through corporate governance. Governance mechanisms will help resolve agency problems and, in turn, encourage green innovation.
Social implications
Understanding the impact of corporate governance on green innovation may help firms combat climate change, a crucial societal concern. The present study helps achieve one of the precious UN’s sustainable development goals: Goal 13 on climate action.
Originality/value
This study goes beyond previous research by adopting Tobin’s Q model to examine the relationship between corporate governance and green R&D investment. Overall, the results suggest that effective corporate governance is necessary for environmental efficiency.
Abstract
Purpose
This study is justified by the economic importance of information on greenhouse gases, as well as the interest in the question of governance structure after the adoption of the objectives of the 2030 Agenda. The problem is also explained by the lack of research that has investigated the relationship between the best governance structure that contributes to achieving sustainability goals, including climate actions (SDG13) and clean energy adoption (SDG7) as part of the 2030 Agenda.
Design/methodology/approach
The level of disclosure is measured on the basis of the carbon disclosure score calculated by the carbon disclosure project (CDP). The study sample consists of 387 US companies that voluntarily participated in the CDP survey from 2011 to 2018. The authors use panel data analysis based on multiple regression models.
Findings
The results confirm the influential role of board size, director independence, the presence of women on the board and the presence of an environmental committee on carbon disclosure. In terms of carbon disclosure, the results suggest that a better governance structure is likely to reduce carbon emissions and improve carbon performance practices. Similarly, the analyses show a different representation of the role of corporate governance in high-carbon sectors compared to low-carbon sectors.
Research limitations/implications
This study has some limitations. First, the sample is only interested in US companies that responded to the CDP questionnaire during the period 2011–2018. Thus, the results cannot be generalized to countries with different governance structures. Second, the data from this study on carbon disclosure, specifically focuses on CDP reporting to determine the carbon disclosure score. In this sense, the findings on information disclosed do not necessarily address disclosures through other media, such as a company’s website or a press release.
Originality/value
Sustainability and commitment to the sustainable development goals (SDGs) are more likely to exist in companies that have good governance and, in particular, a better board. The research is inspired by the SDGs. The study aims to examine the relationship between carbon disclosure and corporate governance in the context of SDGs. Indeed, this research work contributes to achieving sustainability goals, including climate actions (SDG13) and clean energy adoption (SDG7).
Purpose
This paper aims to explore the driving forces for having carbon reporting and carbon reduction management strategies in emerging and developing countries.
Design/methodology/approach
The methodology employed uses logit and linear panel data models and generalized moments method, to avoid endogeneity problems.
Findings
The results show that the carbon reporting decision is positively related to being located in Africa or America (as opposed to Asia), publishing a sustainability report and having certain corporate governance (CG) attributes such as a corporate social responsibility (CSR) committee, larger board size and an executive compensation policy based on environmental and social performance. Regarding the driving forces leading to a reduction of carbon emissions, no evidence is obtained on the effect of the variables considered.
Practical implications
The evidence obtained is valuable, as it can help standard-setters in these geographical areas to promote actions in the field of CG to increase transparency. Nonetheless, additional measures to disclosure should be needed in the future to help decrease carbon emissions more effectively.
Social implications
Raising awareness amongst companies helps mimetic isomorphism take place so that efforts can be made to report levels of pollution in an initial phase, which hopefully in the future may be managed to try to keep a decreasing path. Therefore, implications of this research are crucial for emerging and developing countries, as they are especially vulnerable to climate change.
Originality/value
To the best of the authors’ knowledge, this is the first paper to look into this phenomenon in emerging and developing countries from Asia, Africa and America. This contribution is unique as this research shows that location, publication of a sustainability report together with some CG attributes are drivers for carbon transparency.
Integration of carbon oversight into board structures and processes has the potential to improve carbon performance and demonstrate accountability to stakeholders. However, it is not clear how climate governance affects carbon disclosure. Contributing to two strands of the literature, sustainability and governance issues, this paper examines the combined impact of climate governance on carbon disclosure. We find climate governance is associated with alignment between carbon disclosure and carbon performance. The results suggest that climate governance also reduces over-acclaiming of good performance via extensive disclosure, and low-polluters disclose more to differentiate themselves. Our findings highlight the importance of the frequency of reporting to the board and time horizon of carbon reporting for improving carbon disclosure and carbon performance. In contrast to traditional governance mechanisms, our results suggest climate governance better reflects firms’ commitment to addressing sustainability issues and transparent reporting.
Purpose - The global interest in climate change makes carbon information important for decision-making. This study examines to what extent companies voluntary disclose and manage greenhouse gas (GHG) information, and whether board diversity and industry type explain variations in the level of disclosure and management of GHG information.
Design/methodology/approach - Cross-sectional data analysis is used for the Financial Stock Exchange 350 (UK FTSE 350) in 2017. Disclosure of GHG information is measured using the scores of the Carbon Disclosure Project (CDP), whereas board diversity is measured using gender diversity, board tenure and board skills. The control variables include firm size, leverage, industry type, board meetings, board size, board independence and CEO duality. Ordinal logistic regression (OLR) is used for data analysis.
Findings - The results indicate that representation of female directors in the board of directors positively influences disclosure and management of GHG information. Conversely, a high percentage of directors with a financial and industrial background negatively affects GHG information, while board tenure has no significant effect on GHG information. Concerning the control variables, only firm size and industry type are significant in their relationships to GHG information.
Research limitations/implications - The study investigates only few dimensions of board diversity. Future studies could investigate other dimensions such as cultural diversity and age diversity. Furthermore, cross-sectional data analysis cannot capture the dynamic casual impact between the disclosure and management of GHG information and its determinants. Future studies could use long-term data, which may yield results that are more significant.
Originality/value - The study emphasizes the importance of the role of female directors in ensuring more transparency towards climate change activities. The findings of this study could be of interest to policy makers and stakeholders, and could be used to take initiatives to reduce gender bias and increase the percentage of women in the boardroom. The findings also help investors and stakeholders to evaluate carbon footprint of businesses and to assess the extent to which they meet their environmental responsibility.
Keywords: GHG Information Disclosure; Carbon Disclosure Project (CDP); Climate Change; Corporate Governance (CG); Board Diversity; Gender Diversity.
Purpose
The purpose of this paper is to reflect upon the contributions made to the social and environmental accounting literature by papers that comprised a 2002 Special Issue of Accounting, Auditing and Accountability Journal (AAAJ) entitled social and environmental reporting and its role in maintaining or creating organisational legitimacy. This paper will also provide insights into the origins of legitimacy theory as used in the social and environmental accounting literature as well as providing reflections about the strengths, and shortcomings, of the theory. Suggestions are made with respect to the ongoing application, and development, of legitimacy theory.
Design/methodology/approach
As a commentary, this paper utilises a review of the social and environmental accounting and institutional literature across a number of decades to reveal insights about the development and use of legitimacy theory as a basis to explain social and environmental reporting practices. Citation data are also used to indicate the potential impact that the papers in the 2002 Special Issue had upon subsequent research.
Findings
This commentary shows that the 2002 Special Issue is the most highly cited issue in the history of AAAJ . It also shows that individually, some of the papers in the Special Issue represent some of the most highly cited papers in the social and environmental accounting literature. The commentary provides arguments to suggest that the development of legitimacy theory is in need of further refinement, and suggests a way in which this refinement might take place.
Research limitations/implications
This paper is largely based on the opinions of one researcher, and the evidence presented in the paper is selected on the basis that it is deemed sufficient to support the opinions being projected. The paper also relies on citation data as an indicator of “impact”. The implication of the research is that it identifies a “way forward” for the development of theory applicable to the understanding of organisational social and environmental reporting practices.
Originality/value
The study provides evidence to show that the 2002 Special Issue was significant within the context of AAAJ , and also within the context of the evolution of the social and environmental accounting literature. The description of the history of the development of legitimacy theory, and of the theory’s subsequent application, provides a solid impetus for future refinements to the theory.
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.
Purpose
The purpose of this paper is to investigate the relationship between green initiatives, green performance, and a firm’s financial performance in the world. The existing literature on environmental initiatives and their impacts is limited to the context of a particular country. This gap points to a lack of clarification of variations in environmental regulation and in economic disparity which may affect the impact of green initiatives on green performance and on financial performance.
Design/methodology/approach
Data on the world top 500 publicly traded companies are collected from Compustat, a database of financial, statistical and market information on global companies, and from Newsweek, an information gatekeeper that enables consumers to access a list of environmentally friendly companies. The paper adopts linear regression to test the relationships between variables.
Findings
The results show that green initiatives have a positive impact on green performance, which in turn has a positive impact on financial performance. However, the impact of green initiatives varies by country. The study revealed that companies in European countries and Canada lead in the green initiatives and green performance, followed by the USA and Japan. China and Hong Kong lag behind compared to other countries.
Research limitations/implications
The small sample size in some of the countries used in this study may impact the validity of the results.
Practical implications
This study suggests that companies that seek financial benefits of pursuing green initiatives should have a long-term orientation when implementing these initiatives and should consider the country where they operate.
Originality/value
The current study provides a global understanding of the relationship between green initiatives, green performance, and financial performance, and contributes to the literature by highlighting variation among countries and by year.
Purpose
Drawing on the theory of contingency, the aim of this work is to understand how supply chain-related contingencies, arising from climate change, are related to changes in the organisational structure of firms. Further, the authors explore how this relationship influences the perception of sustainability managers on the adoption of low-carbon operations management practices and their related benefits.
Design/methodology/approach
To achieve this goal, this research uses NVivo software to gather evidence from interviews conducted with ten high-level managers in sustainability and related areas from seven leading companies located in Brazil.
Findings
The authors present four primary results: a proposal of an original framework to understand the relationship between contingency theory, changes in organisational structure to embrace low-carbon management, adoption of low-carbon operations practices and benefits from this process; the discovery that an adequate low-carbon management structure is vital to improve the organisations’ perceptions of potential benefits from a low-carbon strategy; low-carbon management initiatives tend to emerge from an organisation’s existing environmental management systems; and controlling and monitoring climate contingencies at the supply chain level should be permanent and systematic.
Originality/value
Based on the knowledge of the authors, to date, this work is the first piece of research that deals with the complexity of putting together contingency theory, climate-change contingencies at the supply chain level, organisational structure for low-carbon management and low-carbon operations management practices and benefits. This research also highlights evidence from an emerging economy and registers future research propositions.
Purpose
The purpose of this paper is to investigate whether four corporate governance mechanisms (board size, non-executive directors, ownership concentration and directors’ share ownership) influence the extent of greenhouse gas (GHG) disclosure.
Design/methodology/approach
The study uses a mixed-methods approach based on a sample of 62 FTSE 1,000 firms. Firstly, the authors surveyed the senior management of 62 UK-listed firms in the FTSE 1,000 index to determine whether the corporate governance mechanisms influence their GHG disclosure decisions. Secondly, the authors used ordinary least squares (OLS) regression to model the relationship between the corporate governance mechanisms and GHG disclosure scores of the 62 firms.
Findings
The survey and OLS regression results both suggest that corporate governance mechanisms (board size and NEDs) do not influence GHG disclosures. However, the results of the two approaches differ, in that the survey results suggest that corporate governance mechanisms (ownership concentration and directors’ share ownership) do not influence the extent of GHG disclosure, while the opposite is true with the OLS regression results.
Research limitations/implications
The sample size of 62 firms is small which could affect the generalisability of the study. The mixed results mean that more mixed-methods approach is needed to improve the understanding of the role of corporate governance in GHG disclosures.
Originality/value
The use of mixed-methods to examine whether corporate governance mechanisms determine the extent of GHG voluntary disclosure provides additional insights not provided in prior studies.
We investigate whether corporations and their executives react to an exogenous change in passive institutional ownership and alter their corporate governance structure. We find that exogenous increases in passive ownership lead to increases in CEO power and fewer new independent director appointments. Consistent with these changes not being beneficial for shareholders, we observe negative announcement returns to the appointments of new independent directors. We also show that firms carry out worse mergers and acquisitions after exogenous increases in passive ownership. These results suggest that the changed ownership structure causes higher agency costs.
Purpose
– This paper aims to analyse how the components of the institutional context and the adoption patterns of business practices determine the approach to carbon reporting used by organisations.
Design/methodology/approach
– Drawing on the New Institutional Sociology theory, this paper analyses, compares and interprets the results of the cases of four large Spanish companies which operate in different organisational fields and therefore they are subject to different institutional pressures. The results of these case studies illustrate the different approaches to carbon reporting used by organisations.
Findings
– The theoretical proposal of this paper establishes that the components of the institutional context (regulative, normative and cognitive), along with the adoption pattern used by organisations to control their carbon emissions (substantive or symbolic), contribute to determining their approach to carbon reporting (outside-in, inside-out, twin-track and isolated).
Originality/value
– The approaches to reporting and the adoption patterns have been considered independently in the previous literature, paying also scarce attention to the components of the institutional context that can have an influence on the approach to reporting used by organisations to share their environmental information. This paper contributes to bridge this gap, and its results can be of interest for supporting the decisions of policymakers, managers of organisations and society in general.
In this paper we draw on recent progress in the theory of (1) property rights, (2) agency, and (3) finance to develop a theory of ownership structure for the firm.1 In addition to tying together elements of the theory of each of these three areas, our analysis casts new light on and has implications for a variety of issues in the professional and popular literature, such as the definition of the firm, the “separation of ownership and control,” the “social responsibility” of business, the definition of a “corporate objective function,” the determination of an optimal capital structure, the specification of the content of credit agreements, the theory of organizations, and the supply side of the completeness-of-markets problem.
The Influence of Board of Directors, Managerial Ownership, and Audit Committee on CED: A Study of Non-Financial Companies Listed on BEI
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