Determinants of environmental disclosure: investigating new and conventional corporate governance characteristics
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Determinants of environmental disclosure: investigating new and conventional corporate governance characteristics Grigoris Giannarakis1 · Andreas Andronikidis2 · Nikolaos Sariannidis3 © Springer Science+Business Media, LLC, part of Springer Nature 2019
Abstract This study investigated corporate governance factors that could shape the decision for sustainability reporting. Specifically, this paper sets out to investigate the environmentally sensitive properties of distinct corporate governance characteristics vis-à-vis sustainable concerns strengthening the decision to develop environmental disclosures. Regarding explanatory variables, the study focused on corporate governance because it sets the rules and processes by which a firm is managed. Five plausible individual characteristics were employed in our proposed model, namely, “Independent Directors”, “presence of Lead Independent Director”, “frequency of Audit Committee Meetings”, “presence of Sustainable Committee”, and the “Age of the Youngest Director”. We utilized the Environmental facet of Environmental, Social and Governance score calculated by Bloomberg as a proxy driving the decision to disseminate environmental information. Hypotheses were tested using a Logit model for a sample of a total of 278 firms from the United States listed S&P 500. Results revealed that the “Age of the Youngest Director” has a negative effect, while “Independent Directors” and the “presence of Lead Independent Director” variables seem to strengthen the decision to develop environmental disclosures. Implications are valuable to different stakeholders and policy makers interested in improving corporate governance initiatives to reducing agency costs and enhancing corporate sustainable transparency. Keywords Sustainability · Corporate governance · Environment · Disclosure · Determinants
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Grigoris Giannarakis [email protected] Andreas Andronikidis [email protected] Nikolaos Sariannidis [email protected]
1
Department of Business Administration, University of Western Macedonia, 6 km Paleas E.O Grevenon Kozanis, 51100 Grevena, Greece
2
Department of Business Administration, University of Macedonia, 156, Egnatia str, 54636 Thessaloniki, Greece
3
Department of Accounting and Finance, University of Western Macedonia, Kila, 50100 Kozani, Greece
123
Annals of Operations Research
1 Introduction Environmental issues have allured a significant interest within the scientific community because of numerous consequences on ecosystems and human lives subsequently (Huisingh et al. 2015). Therefore, a number of environmental initiatives and policies have been developed, such as Kyoto Protocol in 1997, in order to mitigate the environmental repercussions on humankind (The Greenhouse Gas Protocol 2004; Cadez and Czerny 2016). Within the business arena, the dissemination level of corporate environmental information has triggered the attention of several stakeholders, such as investors and policy makers, since non-financial information contributes to long-term sustainability (Ben
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