Corporate ecological transparency: theories and empirical evidence
Abstract
Purpose
The purpose of this paper is to investigate how firm- and country-level determinants affect corporate ecological transparency.
Design/methodology/approach
The 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.
Findings
The 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/implications
The sample is restricted to the largest firms with relevant carbon profile information. Thus, caution should be exercised when generalizing the inferences.
Practical implications
Sustainability 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/value
The 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.
Keywords
Acknowledgements
Qingliang Tang and Le Luo acknowledge the financial support from Research Centre on Low-carbon Economy of Jinan University for Guangzhou Region. Le Luo also acknowledges financial support from the National Natural Science Foundation of China (Project No. 71272237).
Citation
Tang, Q. and Luo, L. (2016), "Corporate ecological transparency: theories and empirical evidence", Asian Review of Accounting, Vol. 24 No. 4, pp. 498-524. https://doi.org/10.1108/ARA-01-2015-0007
Publisher
:Emerald Group Publishing Limited
Copyright © 2016, Emerald Group Publishing Limited