Board characteristics and ESG disclosure in energy industry: evidence from emerging economies

Abstract

Purpose This paper aims to investigate the impact of board characteristics on environmental, social and governance (ESG) disclosure in the energy industry of emerging economies. Design/methodology/approach The authors adopt the Bloomberg ESG rating to measure the extent of ESG disclosure using a sample of 1,260 observations from BRICS emerging economies. Multiple regression techniques were used to estimate the effect of board characteristics on ESG disclosures of a sample Brazil, Russia, India, China, and South Africa (BRICS) listed companies between 2010 and 2019. Findings The authors find a relatively low (at 37%) level of ESG disclosure among the sampled firms and a relatively high degree of variability. The authors also find that board gender diversity, board composition and board diligence are positively related to the level of ESG disclosure while the study documents no relationship between board size and ESG disclosure. Practical implications The study’s findings highlight the importance of corporate board attributes in influencing strategic decisions such as the level of ESG disclosure and the findings may be useful to regulators, policymakers and investors in making informed investment decisions. Originality/value To the best of the authors’ knowledge, this study is one of the first attempts at examining the impact of board characteristics on ESG disclosure in the energy industry in emerging economies. The paper provides new evidence on the relationship between board characteristics (BC) and ESG disclosure in the energy industry of emerging BRICS countries within a panel multi-country research setting.

Exploring the Impact of Board Attributes on ESG Scores of Indonesian Companies

“…Embracing gender diversity in boardrooms can lead to tangible improvements in ESG performance, reflecting a commitment to promoting equality, diversity, and sustainability within organizations (Romano et al, 2020;Zahid et al, 2020). This conclusion about gender diversity aligns with research conducted by Bigelli et al (2023) and Nuhu & Alam (2024),which concluded that gender diversity significantly contributes to achieving higher ESG scores. In contrast, Abdelkader et al (2024) concluded a negative relationship between Board Gender Diversity and ESG.…”

“…Bhatia & Marwaha (2022) examined the influence of board independence, board size, board gender diversity, CEO duality, and female executive participation on ESG disclosure scores in Indian companies and found that only CEO duality was a consistent factor in influencing the ESG Disclosure Score. Nuhu & Alam (2024) found that board gender diversity, board composition, and board diligence positively relate to the level of ESG disclosure, while the study documents no relationship between board size and ESG disclosure. Shaukat et al (2016) found that the greater the CSR orientation of the board (as measured by the board's independence, gender diversity, and financial expertise on the audit committee), the more proactive and comprehensive the firm's CSR strategy, and the higher its environmental and social performance.…”

“…Understanding these attributes is crucial for evaluating a board's effectiveness in overseeing corporate strategies and policies, including those related to sustainability and ethical practices. Previous research has extensively examined the relationship between various board attributes and corporate practices, particularly regarding sustainability disclosures and ESG Scores (Aladwey et al, 2022;Nuhu & Alam, 2024;Thambugala & Rathwatta, 2021;Zahid et al, 2020). These studies have identified several essential board characteristics that significantly influence these aspects of corporate governance and decision-making.…”

Guest editorial: Toward a better understanding of sustainability accounting in the energy industry

“…This special issue covers several topics addressing different issues of sustainability accounting in the energy industry. The first article is titled "Board characteristics and ESG disclosure in energy industry: Evidence from emerging economies" by Nuhu and Alam (2023). It focuses on investigating the impact of board characteristics on environmental, social and governance (ESG) disclosure in the energy industry of emerging economies.…”

Bagaimana Tata Kelola Perusahaan Dan Negara Berinteraksi Dalam Pengungkapan Lingkungan Perusahaan Di Asean?

“…Ukuran board berhubungan negatif dengan pengungkapan lingkungan, menurut beberapa penelitian sebelumnya (Akbas, 2016b;Osazuwa dkk., 2016;Pisano dkk., 2022). Hubungan antara karakteristik dewan dan pengungkapan lingkungan telah dipelajari di berbagai negara, termasuk Nigeria, India, Turki, dan negara-negara berkembang (Akbas, 2016b;Amalia dkk., 2022;Kumari dkk., 2022;Nuhu & Alam, 2023;Osazuwa dkk., 2016). Temuan ini secara konsisten menunjukkan bahwa ukuran dewan memiliki dampak negatif terhadap pengungkapan lingkungan (Akbas, 2016b;Osazuwa dkk., 2016;Pisano dkk., 2022).…”