Regulatory influence, board characteristics and climate change disclosures: evidence from environmentally sensitive firms in developing economy context

Saha, Anup Kumar; Khan, Imran

Abstract

Purpose
This study aims to examine the impact of board characteristics on climate change disclosures (CCDs) in the context of an emerging economy, with a unique focus on regulatory influences.

Design/methodology/approach
This study analyzes longitudinal data (2014–2021) from environmentally sensitive firms listed on the Dhaka Stock Exchange, using a disclosure index developed within the Global Reporting Initiative framework. The authors use a neo-institutional theoretical lens to explore regulatory influences on CCD through board characteristics. This study uses hand-collected data from annual reports owing to the absence of an established database.

Findings
The results indicate that a larger board size, the presence of foreign directors and the existence of an audit committee correlate with higher levels of CCD disclosure. Conversely, a higher frequency of board meetings is associated with lower CCD disclosure levels. This study also observed an increase in CCD following the implementation of corporate governance guidelines by the Bangladesh Securities and Exchange Commission, albeit with a relatively low number of firms making these disclosures.

Research limitations/implications
This study contributes to the climate change reporting literature by providing empirical evidence of regulatory influences on CCD through board characteristics in an emerging economy. However, the findings may not be universally applicable, considering the study’s focus on Bangladeshi listed firms.

Practical implications
This study suggests growing pressures for diverse stakeholders, including researchers and regulatory bodies, to integrate climate change disclosure into routine activities. This study offers a valuable framework and insights for various stakeholders.

Social implications
By emphasizing the influence of good governance and sustainability practices, this study contributes to stakeholders’ understanding, aiming to contribute to a better world.

Originality/value
This study stands out by uniquely positioning itself in the climate change reporting literature, shedding light on regulatory influences on CCD through board characteristics in the context of an emerging economy.

• Journal Article Type: Article
• Acceptance Date: Feb 19, 2024
• Online Publication Date: Mar 11, 2024
• Deposit Date: Mar 18, 2024
• Publicly Available Date: Mar 18, 2024
• Journal: Corporate Governance: The International Journal of Business in Society
• Print ISSN: 1472-0701
• Electronic ISSN: 1472-0701
• Publisher: Emerald
• Peer Reviewed: Peer Reviewed
• DOI: https://doi.org/10.1108/cg-06-2023-0262
• Keywords: Business, Management and Accounting (miscellaneous)
• Publisher URL: https://www.emerald.com/insight/content/doi/10.1108/CG-06-2023-0262/full/html