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Corporate ecological transparency: theories and empirical evidence

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  • Qingliang Tang
  • Le Luo

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.

Suggested Citation

  • Qingliang Tang & Le Luo, 2016. "Corporate ecological transparency: theories and empirical evidence," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 24(4), pages 498-524, December.
    • Handle: RePEc:eme:arapps:ara-01-2015-0007
    DOI: 10.1108/ARA-01-2015-0007
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    Citations

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    Cited by:

    1. Le Luo & Qingliang Tang, 2021. "Corporate governance and carbon performance: role of carbon strategy and awareness of climate risk," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 2891-2934, June.
    2. Rong He & Le Luo & Abul Shamsuddin & Qingliang Tang, 2022. "Corporate carbon accounting: a literature review of carbon accounting research from the Kyoto Protocol to the Paris Agreement," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(1), pages 261-298, March.
    3. Shan Zhou, 2022. "Reporting and Assurance of Climate‐Related and Other Sustainability Information: A Review of Research and Practice," Australian Accounting Review, CPA Australia, vol. 32(3), pages 315-333, September.
    4. Choi, Bobae & Luo, Le, 2021. "Does the market value greenhouse gas emissions? Evidence from multi-country firm data," The British Accounting Review, Elsevier, vol. 53(1).
    5. Halil Emre Akbaş & Seda Canikli, 2018. "Determinants of Voluntary Greenhouse Gas Emission Disclosure: An Empirical Investigation on Turkish Firms," Sustainability, MDPI, vol. 11(1), pages 1-24, December.
    6. Fortune Ganda, 2018. "The influence of carbon emissions disclosure on company financial value in an emerging economy," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 20(4), pages 1723-1738, August.
    7. Tang, Qingliang, 2016. "Carbon management system study: Contributions, limitations, and future opportunities: A response to discussion comments (2016)," The International Journal of Accounting, Elsevier, vol. 51(2), pages 310-314.
    8. Le Luo & Qingliang Tang & Juan Peng, 2018. "The direct and moderating effects of power distance on carbon transparency: An international investigation of cultural value and corporate social responsibility," Business Strategy and the Environment, Wiley Blackwell, vol. 27(8), pages 1546-1557, December.
    9. Yankun Zhou & Le Luo & Hongtao Shen, 2022. "Community pressure, regulatory pressure and corporate environmental performance," Australian Journal of Management, Australian School of Business, vol. 47(2), pages 368-392, May.
    10. Fan, Hanlu & Tang, Qingliang & Pan, Lipeng, 2021. "An international study of carbon information asymmetry and independent carbon assurance," The British Accounting Review, Elsevier, vol. 53(1).
    11. Yan Jiang & Le Luo, 2018. "Market reactions to environmental policies: Evidence from China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(5), pages 889-903, September.
    12. Khosroshahi, Hossein & Azad, Nader & Jabbarzadeh, Armin & Verma, Manish, 2021. "Investigating the level and quality of the information in the environmental disclosure report of a corporation considering government intervention," International Journal of Production Economics, Elsevier, vol. 235(C).
    13. Le Luo & Qingliang Tang & Hanlu Fan & Jamie Ayers, 2023. "Corporate carbon assurance and the quality of carbon disclosure," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(1), pages 657-690, March.
    14. Sunhee Suk, 2018. "Determinants and Characteristics of Korean Companies’ Carbon Management under the Carbon Pricing Scheme," Energies, MDPI, vol. 11(4), pages 1-23, April.
    15. Khosroshahi, Hossein & Dimitrov, Stanko & Hejazi, Seyed Reza, 2021. "Pricing, greening, and transparency decisions considering the impact of government subsidies and CSR behavior in supply chain decisions," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).
    16. Antonio J. Mateo‐Márquez & José M. González‐González & Constancio Zamora‐Ramírez, 2021. "The influence of countries' climate change‐related institutional profile on voluntary environmental disclosures," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 1357-1373, February.

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