Corporate governance and carbon emission disclosures: evidence from Sri Lanka

Abstract

The purpose of this study is to investigate whether corporate governance attributes such as Board Size, Board Independence, Audit Committee Independence, and ESG Committee impact carbon emission voluntary disclosures of environmentally sensitive listed companies in Sri Lanka. The sample of the study consists of 29 listed companies of CSE industry groups over the 2016 to 2020 period. Carbon emission disclosures were measured using the carbon disclosure project index checklist developed by Choi et al. (2013). Later, the corporate governance attributes that influence carbon disclosures were examined using panel data regression models. The findings of the study suggested that entities with higher number of directors on their boards were more likely to disclose carbon emission information and Board Independence and Audit committee Independence did not have a significant impact on reporting carbon emission information. Additionally, existence of the ESG Committee in companies had a strong positive impact on the carbon emission reporting and the extent of such disclosures. This study provides valuable insight which would be useful for organizations and regulatory bodies. Such an understanding is crucial for specifying necessary policies that will provide emission reduction practices and policies for entities.