Are Polluting Firms Disclosing Enough on the Environment: A Case of an Emerging Economy

Abstract

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This study attempts to investigate the environmental reporting practices of companies classified under the ‘red’ category industries in India based on the Global Reporting Initiative guidelines. Content analysis is applied to evaluate the environmental disclosures of companies in seven polluting industrial sectors. The study uses independent sample t-test, analysis of variance, and Tukey’s post-hoc tests on a sample of 52 companies listed on the National Stock Exchange during the period 2020-21. Statistically significant differences were revealed in the disclosure levels of companies based on size, industry, and environmental certifications. The cement industry made the highest environmental disclosure, whereas the chemicals and pharmaceutical industries disclosed the least. It was found that companies revealed maximum information on their environmental initiatives and energy consumption, whereas the least disclosures were made on environmental impact mitigation. The study provides an implication for strict adoption of systematic reporting framework, especially for polluting industries, irrespective of their size, to bring uniformity, reliability, and responsibility in their practice.

Keywords: Environmental Reporting, Content Analysis, Global Reporting Initiative, Red-Category Industries, Sustainability

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