Internal contextual factors influencing the extent of environmental disclosure

Abstract

The purpose of this study is to examine whether internal contextual factors such as the presence of an environmental committee and an Environmental Management Systems (EMS) enhances the extent of companies’ environmental communication. One hundred sixty-three sustainability reports of large companies for the year ending 2009 are analysed by using an unweigthed disclosure index. Our results show that the presence of an environmental committee and an EMS is directly related to the disclosure of a greater amount of environmental information. The findings of this study offer insight into the establishment of governance standards concerning the role of an environmental committee and the presence of an EMS in enhancing the credibility of environmental reporting. This study contributes valuable further development of insight into environmental disclosure practices. The results offer the business and accounting professions a better understanding of environmental communication.