Empirical study on determinants of environmental disclosure

Purpose - The purpose of this study is to examine the status of corporate environment on the websites and annual reports of selected companies. This paper also attempts to study the relationship between company variables and the level of corporate environment disclosure on the company website and annual reports. Design/methodology/approach - This study is based on the websites and annual reports of top 100 listed companies on the Bombay Stock Exchange. The companies are selected on the basis of market capitalization as on March 31, 2014. The data are collected on the basis of Global Reporting Initiative-3 Guidelines. Findings - 14 and 30 per cent of the companies do not disclose environmental information on the website and annual report, respectively. There is no specific space for the disclosure of information on this vital issue; information was found scattered in the various sections of the website and annual report. Waste treatment, water management and carbon foot is the focus area of 53, 46 and 40 companies on the website, respectively, whereas in annual reports, energy conservation, water management and waste management attracts the attention of 79, 86 and 82 companies, respectively. The environmental disclosure on the website and overall disclosure has association with leverage, company size and systematic risk. Profitability and environmental disclosure were found to be inversely associated. Practical implications - The government through appropriate guidelines should make the environmental disclosure mandatory for all the companies. Disclosure of environmental information such as penalties imposed and suits faced under environmental laws and notices received from pollution control boards and such other activities which have damaged environmental resources must be made mandatory. The accounting bodies should develop the accounting standard in respect of items and manner of disclosure. While framing environmental disclosure guidelines, special attention should be given to the disclosure of information related to water management, air and land pollution as these are the basic necessities for the existence of life on this planet. Originality/value - This study is unique as it makes the comparative analysis of disclosure through annual reports and the company website of selected Indian companies.