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Corporate ecological transparency: theories and empirical evidence

Corporate ecological transparency: theories and empirical evidence PurposeThe purpose of this paper is to investigate how firm- and country-level determinants affect corporate ecological transparency.Design/methodology/approachThe study utilizes multiple theories that are commonly used by corporate social responsibility studies to explain the corporate ecological transparency. Based on a sample of 243 Global 500 firms, the authors examine the impact of shareholders’ interest in ecological information, creditors’ concern, firm size, industry membership, the presence of emission trading scheme (ETS), stringency of environmental regulations on corporate ecological transparency.FindingsThe paper documents evidence that larger firms, firms in GHG-intensive sectors, and highly leveraged firms tend to produce more ecological disclosures. In addition, ecological transparency is higher in countries with an ETS and increases with more stringent environmental regulation. Finally, the authors find little evidence that shareholders of these firms are concerned with this information.Research limitations/implicationsThe sample is restricted to the largest firms with relevant carbon profile information. Thus, caution should be exercised when generalizing the inferences.Practical implicationsSustainability has become one of the most importance topics in business agenda. Firms’ attitude and decision about the ecological transparency will affect internal firm performance, external stakeholder engagement, and policy makers’ attention. It determines the firms’ long-term operation and development.Originality/valueThe study contributes to the literature by utilizing multiple theories to explain ecological transparency. Each of the theories provided only a partial explanation for ecological transparency. Thus, we need to consider the firms’ behaviors from multiple dimensions. In particular, stakeholder theory and institutional theory are the dominant perspectives accounting for managers’ propensity to disclose a firm’s ecological footprint. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Asian Review of Accounting Emerald Publishing

Corporate ecological transparency: theories and empirical evidence

Tang, Qingliang; Luo, Le
Asian Review of Accounting , Volume 24 (4): 27 – Dec 5, 2016
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27 pages

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1321-7348
DOI
10.1108/ARA-01-2015-0007
Publisher site
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Abstract

PurposeThe purpose of this paper is to investigate how firm- and country-level determinants affect corporate ecological transparency.Design/methodology/approachThe study utilizes multiple theories that are commonly used by corporate social responsibility studies to explain the corporate ecological transparency. Based on a sample of 243 Global 500 firms, the authors examine the impact of shareholders’ interest in ecological information, creditors’ concern, firm size, industry membership, the presence of emission trading scheme (ETS), stringency of environmental regulations on corporate ecological transparency.FindingsThe paper documents evidence that larger firms, firms in GHG-intensive sectors, and highly leveraged firms tend to produce more ecological disclosures. In addition, ecological transparency is higher in countries with an ETS and increases with more stringent environmental regulation. Finally, the authors find little evidence that shareholders of these firms are concerned with this information.Research limitations/implicationsThe sample is restricted to the largest firms with relevant carbon profile information. Thus, caution should be exercised when generalizing the inferences.Practical implicationsSustainability has become one of the most importance topics in business agenda. Firms’ attitude and decision about the ecological transparency will affect internal firm performance, external stakeholder engagement, and policy makers’ attention. It determines the firms’ long-term operation and development.Originality/valueThe study contributes to the literature by utilizing multiple theories to explain ecological transparency. Each of the theories provided only a partial explanation for ecological transparency. Thus, we need to consider the firms’ behaviors from multiple dimensions. In particular, stakeholder theory and institutional theory are the dominant perspectives accounting for managers’ propensity to disclose a firm’s ecological footprint.

Journal

Asian Review of Accounting – Emerald Publishing

Published: Dec 5, 2016

References

  • Internal organisational factors influencing corporate social and ethical reporting: beyond current theorising
  • A commentary on: corporate social responsibility reporting and reputation risk management
  • Engaging with organisations in pursuit of improved sustainability accounting and performance
  • Corporate environmental disclosure, financial markets and the media: an international perspective
  • The relations among environmental disclosure, environmental performance, and economic performance: a simultaneous equations approach
  • Social disclosure, legitimacy theory and the role of the state
  • Re-conceiving managerial capture
  • External transparency or internal capture? The role of third-party statements in adding value to corporate environmental reports