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Publication date: 30 March 2022

Kishore Kumar, Ranjita Kumari, Monomita Nandy, Mohd Sarim and Rakesh Kumar

Based on the essence of the legitimacy and agency theories, this study empirically investigates the influence of corporate governance attributes and ownership structures on…

1701

Abstract

Purpose

Based on the essence of the legitimacy and agency theories, this study empirically investigates the influence of corporate governance attributes and ownership structures on sustainability reporting of companies listed on the National Stock Exchange (NSE), India.

Design/methodology/approach

The study is based on panel data regression analysis of sustainability reporting practices of 53 environmentally sensitive companies drawn from NIFTY100 Index at NSE. All data pertaining to sustainability information disclosure, ownership structure and corporate governance characteristics were sourced from sustainability report, business responsibility report, annual report and Centre for Monitoring Indian Economy (CMIE) database for the years 2015–2019.

Findings

The empirical result reveals that sustainability reporting scenario has been consistently improving in India. This study documents that government ownership and frequency of board meetings are the two most important factors significantly influencing the extent of sustainability information disclosure of companies. However, the present study failed to find any significant impact of board size and big4 auditing on sustainability reporting practices. Unexpectedly, a higher number of independent directors does not improve sustainability disclosure of companies in India.

Originality/value

This study is one of the first studies to investigate how the nature of ownership and corporate governance characteristics contribute to or impede sustainability reporting practices of companies in India. This study offers important insights to regulators, practitioners and investors to analyze whether sustainability disclosure of companies is influenced by corporate governance attributes. It also provides a perspective for regulators and corporate strategists to assess the impact of recent corporate governance reforms in India and consider how corporate governance mechanism can be used to improve sustainability reporting practices.

Details

Management of Environmental Quality: An International Journal, vol. 33 no. 5
Type: Research Article
ISSN: 1477-7835

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Article
Publication date: 24 August 2021

Kishore Kumar, Ranjita Kumari, Archana Poonia and Rakesh Kumar

This study aims to evaluate the nature and extent of sustainability disclosure practices of publicly listed companies in India. Further, it investigates the impact of potential…

1729

Abstract

Purpose

This study aims to evaluate the nature and extent of sustainability disclosure practices of publicly listed companies in India. Further, it investigates the impact of potential determinants on the sustainability disclosure of companies.

Design/methodology/approach

The study analyzes data of 75 top listed nonbanking companies operating in India included in NIFTY100 Index for the years 2014-2015 to 2018-2019. In the present study, environment, social and governance disclosure dimensions were considered to evaluate the sustainability reporting performance of companies using content analysis. Panel data analysis was conducted to investigate the impact of various factors on the extent of sustainability information disclosure.

Findings

Results indicate that environmentally polluting industries disclose significantly higher sustainability information than non-polluting industries in India. The empirical findings suggest that determinants such as company size, age, free cash flow capacity, government ownership and global reporting initiative (GRI) usage positively related to the extent of corporate sustainability disclosure. Contrary to the expectations, financial leverage and profitability were found to be negatively related to the sustainability disclosure of companies in India.

Practical implications

This study provides empirical evidence for regulators, practitioners and corporate strategists to assess the progress in the sustainability reporting landscape in India. The finding implies that large and established companies can reduce legitimacy costs through higher sustainability information disclosure. Interestingly, this premise did not hold in the case of high leveraged and profitable companies. Overall findings can also help policymakers to incorporate necessary reforms to improve sustainability reporting in India.

Originality/value

This study is one of the first studies to investigate the nature, extent and potential determinants of corporate sustainability disclosure in India. The paper adds to the existing literature on sustainability reporting by providing empirical evidence on the relationship between sustainability reporting and potential determinants such as government ownership, size, leverage, profitability, age, free cash flow capacity, industry and GRI usage.

Details

Journal of Financial Reporting and Accounting, vol. 21 no. 2
Type: Research Article
ISSN: 1985-2517

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