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The IUP Journal of Corporate Governance
Corporate Environmental Disclosure, Corporate Governance and Firm Characteristics: Evidence from Polluting and Non-Polluting Sectors in India
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Corporate environmentalism is an aspect of good corporate citizenship that revolves around the concept of sustainability. This study examines the determinants of corporate environmental responsibility and the economic benefits attached to it. The study focuses on the disclosure aspect of corporate environmentalism and how corporate governance practices of companies from polluting as well as non-polluting industries in India influence the voluntary environmental disclosure quality. The findings reveal significant impact of ownership concentration and public shareholding on voluntary environmental disclosures, but independent directors are found to have no impact on voluntary environmental disclosures in both polluting and non-polluting industries.

 
 
 

The issues of corporate governance and corporate sustainability practices are now regarded as an interrelated and integral part of business performance (Trireksani and Djajadikerta, 2016). Focusing on the aspect of environmental performances, it is found that disclosure of corporate environmental practices largely remains unregulated (Kolk, 2008) and voluntary. The managerial decisions about the extent of voluntary disclosure to be made by the firm are influenced by board of directors and shareholders (Millstein, 1991). This phenomenon of voluntary disclosure of corporate environmental information in annual reports and sustainability or environmental reports has resulted in substantial literature in this field of study (Campbell, 2004). Titenberg (1998) noted three waves on environmental practices: the first wave dealt with legal remedies in the form of prohibition or emission standards; the second wave was market-oriented, like charges for emission, permits, and subsidies; and the third or the most recent wave of environmental regulation has been the voluntary disclosure of corporate environmental information to the public. KPMG (2008) in its survey outlines that in order to meet the stakeholders’ demand for accountability and transparency more and more firms are increasingly relying on voluntary disclosure of environmental practices.

There has been extensive research on the determinants of corporate environmental disclosures in European and North American contexts (Aerts et al., 2008), but research on voluntary environmental disclosures in developing countries, though has been increasing, requires more intensive investigation (Elijido, 2011). The present study deals with voluntary environmental disclosure among polluting and non-polluting industries in the Indian context. To specify the model in the context of the developing country, the literature has been extensively referred mostly in the context of developed as well as developing countries.

 
 
 

Corporate Governance Journal, Corporate Environmentalism, Firm Characteristics, Corporate Environmental Responsibility, Economic benefits