On the Determinants of Environmental Information Disclosure: Evidences from Industrial Saudi Listed Firms

Abstract

This paper discusses the determinants of corporate environmental disclosure by industrial Saudi listed firms. Using a sample of 63 industrial firms listed in Saudi Arabia between 2016 and 2018 and a fixed effect panel data, we test the effect of corporate governance variables, firms' characteristics and CEOs’ financial education on the level of environmental information disclosure. Two measures of corporate environmental disclosure are used based on Global Reporting Initiative and the content analysis technique. Our results show that the presence of environmental committee and the firm’s age are the most relevant factors that can influence the corporate environmental disclosure in annual reports in the Saudi context. In order to urge Saudi firms to pay more attention to the environment and adopt strategies to conserve it as well as disclose environmental information, it is suggested that decision makers change the nature of the environmental committee from an optional committee to a mandatory committee.

Keywords: corporate environmental disclosure; corporate governance; financial education, firm characteristics, environmental committee; Saudi listed firms

JEL Classification: G32