Factors influencing the level of environmental disclosures in sustainability reports: Case of climate risk disclosure by Brazilian companies

Abstract

In addition to sustainability issues, companies are being asked to disclose information on climate change risks in order to inform investors and stakeholders. However, despite the growing number of studies on corporate environmental disclosure, there are few studies on risks and opportunities in relation to climate change. This study investigated the extent and content of climate risks information disclosure provided in the sustainability reports of firms listed on the Brazilian Stock Exchange (BM&FBovespa) and tested whether there were any relationships between the amount of climate risks disclosure and some corporation characteristics. The sample was composed of companies that were simultaneously listed on the stock exchange and disclosed the Global Reporting Initiative sustainability reports from 2009 to 2014. The final sample of the study was 67 companies totaling 402 observations. Preliminary results from the content analysis revealed that, although Brazilian companies tend to disclose information on climate risks, the level of this type of disclosure still remains relatively low. Findings suggest that corporate climate risk disclosures have significant and positive relationships with firm size, financial performance, and country origin. Nevertheless, findings indicate that corporate climate risk disclosures have negative associations with level of indebtedness.

Does Internal Control Contribute to a Firm’s Green Information Disclosure? Evidence from China

“…They point out that although corporate political connections can influence companies to more actively disclose environmental information, it can also mask political rent-seeking in the guise of protecting the environment. In addition, the literature indicates that company characteristics such as financial leverage, capital requirements, and equity structure also impact environmental information disclosure [15][16][17][18].…”

The influence of environmental performance on environmental disclosures: An empirical study in Ghana

“…Also, larger firms, due to their size, can take on the extra voluntary disclosure cost that come with disclosing more environmentally related issues, hence the positive coefficient. Beyond their ability to take on the extra voluntary disclosure cost, larger firms tend to have a greater “impact on social expectations because they have more stakeholders than small companies” (Kouloukoui et al, , p. 9).…”

Environmental Disclosure: Determinants and Effects on Financial Performance? An Empirical Evidence from Turkey

“…Therefore, highly leveraged firms will disclose less information. Some studies supported this view and found a negative relation between financial leverage and environmental disclosure (Brammer & Pavelin, 2006;Dejean, 2009;Andrikopoulos & Kriklani, 2013;Singhania & Gandhi, 2015;Deswanto & Siregar, 2018;Kouloukoui et al, 2019). However, another empirical research group did not find any significant relation between financial leverage and environmental disclosure (Cormier & Gordon, 2001;Freedman & Jaggi, 2005;Brammer & Pavelin, 2008;Pahuja, 2009;Sun et al, 2010;Clarkson et al, 2011;Michelon & Parbonetti, 2012;Wang et al, 2012;Setyorini & Ishak, 2012;Lu & Abeysekera, 2014;Akbaş, 2014;Rover et al, 2015;Braam et al, 2016;Ahmadi & Bouri, 2017;Chandok & Singh, 2017;Elshabasy, 2018;Kılıç & Kuzey, 2019;Akbaş & Canikli, 2019).…”

“…Hackston & Milne, 1996;Patten, 2002;Brammer & Pavelin, 2006;Liu & Anbumozhi, 2009;Huang & Kung, 2010;Wang et al, 2012;Lu, 2014;Akbaş, 2014;Fontana et al, 2015;Welbeck et al, 2017;Ismail et al, 2018;Ofoegbu et al, 2018;Ashfaq & Rui, 2019). However, some studies reported an insignificant relation between industry type and environmental disclosure (Braam et al, 2016;Ahmadi & Bouri, 2017;Kolsi & Attayah, 2018;Kılıç & Kuzey, 2019;Akbaş & Canikli, 2019;Kouloukoui et al, 2019).…”