Firm Characteristics and Corporate Environmental Disclosure Practices in India

The growing global concern towards corporate environmental disclosure has led to the voluntary reporting of environmental information by Indian companies as well. However, the nature and content of disclosure vary across industries and firms, and these variations can be attributed to various firm specific factors. The present study therefore aims at identifying the influence of firm-specific factors on environmental disclosure made by select Indian companies. The firm-specific characteristics identified for the study are firm size, profitability, leverage, effective tax rate and liquidity. Environmental disclosure is measured by developing an environmental disclosure index based on prior literature. The sample for the study comprises select companies chosen from ten environmentally sensitive industries, viz., distillery, sugar, fertilizer, pulp and paper, chlor alkali, pharmaceuticals, dyes and dye intermediates, pesticides, oil and refinery and petrochemicals. Consequently, a multiple regression analysis has been conducted to assess the relationship between the corporate characteristics and environmental disclosure. The findings of the study show that the influential variables for explaining firms' variation in environmental disclosure are effective tax rate, liquidity and leverage