IMPACT OF SOCIAL RESPONSIBILITY DISCLOSURE ON THE INTEGRATION OF GREEN ACCOUNTING AND CORPORATE GOVERNANCE ON HIGHLY POLLUTED INDUSTRIES IN INDIA
Keywords:
Green Accounting, Corporate Governance, Corporate Social Responsibility, Environmental Sustainability.
Abstract
Fulfilment of environmental and social obligations is required for sustainable development. Green accounting integrates all environmental consequences into corporate accounting accounts. Disclosure of Corporate social responsibility is a component of accounting performance tied to the social, economic, and environmental aspects of a company's programme that can be vital in cultivating stakeholders. The current research aims to investigate the effect of social responsibility disclosure on integrating green accounting and corporate governance of highly polluting industries in India. The study employed a descriptive study design and qualitative research methods in accordance with the interpretative research philosophy and collected the sample data from 52 highly polluted industries from Central Pollution Board in India. The study employs a structural model, descriptive statistics, and F-test analysis. The result reveals that green accounting and firm characteristics significantly enhance the selected firms' social responsibility disclosure. Furthermore, it was discovered that corporate governance and social responsibility disclosure impact the chosen firms' performance and value. However, it has been determined that green accounting does not affect the profitability or market value of the selected firms. Also, this work concludes that a good firm gives its surroundings and surrounding community enough consideration in addition to its pursuit of profit. As the research is based on 52 industries, the generalized result can not bed determined. The knowledge of the respondent also impacts the research.
JEL Classification Codes: M49, M14, G30, Q56.
References
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Rodriguez-Fernandez, M. (2016). Social responsibility and financial performance: The role of good corporate governance. BRQ Business Research Quarterly, 19(2), 137–151. https://doi.org/10.1016/j.brq.2015.08.001
Sun, Y., Xu, C., Li, H., & Cao, Y. (2022). What drives the innovation in corporate social responsibility (CSR) disclosures? An integrated reporting perspective from China. Journal of Innovation and Knowledge, 7(4), 1–12. https://doi.org/10.1016/j.jik.2022.100267
Sutantoputra, A. W., Lindorff, M., & Prior Johnson, E. (2012). The relationship between environmental performance and environmental disclosure. Australasian Journal of Environmental Management, 19(1), 51–65. https://doi.org/10.1080/14486563.2011.646752
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Ting, P. H. (2020). Do large firms just talk corporate social responsibility? - The evidence from CSR report disclosure. Finance Research Letters, pp. 38, 1–8. https://doi.org/10.1016/j.frl.2020.101476
Tsalis, T. A., Malamateniou, K. E., Koulouriotis, D., & Nikolaou, I. E. (2020). New challenges for corporate sustainability reporting: United Nations’ 2030 Agenda for sustainable development and the sustainable development goals. Corporate Social Responsibility and Environmental Management, 27(4), 1617–1629. https://doi.org/10.1002/csr.1910
Wallace, R. S. O., & Naser, K. (1995). Firm-specific determinants of the comprehensiveness of mandatory disclosure in the corporate annual reports of firms listed on the stock exchange of Hong Kong. Journal of Accounting and Public Policy, 14(4), 311–368. https://doi.org/10.1016/0278-4254(95)00042-9
Wu, M. L. (2006). Corporate social performance, corporate financial performance, and firm size: A meta-analysis. Journal of American Academy of Business, 8(1), 163–171.
Andrikopoulos, A., & Kriklani, N. (2013). Environmental Disclosure and Financial Characteristics of the Firm: The Case of Denmark. Corporate Social Responsibility and Environmental Management, 20(1), 55–64. https://doi.org/10.1002/csr.1281
Arafat, M. Y., Warokka, A., & Dewi, S. (2012). Does Environmental Performance Really Matter? A Lesson from the Debate of Environmental Disclosure and Firm Performance. Journal of Organizational Management Studies, 2012, 1–15. https://doi.org/10.5171/2012.213910
Bolourian, S., Angus, A., & Alinaghian, L. (2021). The impact of corporate governance on corporate social responsibility at the board-level: A critical assessment. Journal of Cleaner Production, 291, 125752. https://doi.org/10.1016/j.jclepro.2020.125752
Branco, M. C., & Rodrigues, L. L. (2006). Corporate social responsibility and resource-based perspectives. Journal of Business Ethics, 69(2), 111–132. https://doi.org/10.1007/s10551-006-9071-z
Campanella, F., Serino, L., Crisci, A., & D’Ambra, A. (2021). The role of corporate governance in environmental policy disclosure and sustainable development. Corporate Social Responsibility and Environmental Management, 28(1), 474–484. https://doi.org/10.1002/csr.2062
Chotaliya, M. (2022). Green Accounting in India as a measure of attaining sustainable development goals. In Future of Work and Business in Covid-19 Era : Proceedings of IMC-2021 (Issue July). https://doi.org/10.1007/978-981-19-0357-1
Cuadrado-Ballesteros, B., Frías-Aceituno, J., & Martínez-Ferrero, J. (2014). The role of media pressure on the disclosure of sustainability information by local governments. Online Information Review, 38(1), 114–135. https://doi.org/10.1108/OIR-12-2012-0232
Deegan, C., & Rankin, M. (1996). Do Australian companies report environmental news objectively? An analysis of environmental disclosures by firms prosecuted successfully by the Environmental Protection Authority. Accounting, Auditing & Accountability Journal, 9(2), 50–67. Retrieved from https://doi.org/10.1108/09513579610116358
Dhar, B. K., Sarkar, S. M., & Ayittey, F. K. (2022). Impact of social responsibility disclosure between implementation of green accounting and sustainable development: A study on heavily polluting companies in Bangladesh. Corporate Social Responsibility and Environmental Management, 29(1), 71–78. https://doi.org/10.1002/csr.2174
Dura, J., & Suharsono, R. S. (2022). Application Green Accounting To Sustainable Development Improve Financial Performance Study In Green Industry. Jurnal Akuntansi, 26(2), 192–212. https://doi.org/10.24912/ja.v26i2.893
Dutta, T. K., Raju, V., & Kassim, R. N. M. (2020). Green accounting in achieving higher corporate profitability and sustainability in the ready-made garment industry in Bangladesh: A conceptual analysis. International Journal of Innovation, Creativity and Change, 10(10), 178–187.
Ezhilarasi, G., & Kabra, K. C. (2017). The impact of corporate governance attributes on environmental disclosures: Evidence from India. Indian Journal of Corporate Governance, 10(1), 1–20. https://doi.org/10.1177/0974686217701464
Gololo, I. A. (2019). Corporate Social Responsibility Disclosure and Financial Performance of Quoted Nigerian Cement Companies. International Business and Accounting Research Journal, 3(2), 89–106. https://doi.org/10.15294/ibarj.v3i2.60
Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modelling. Journal of the Academy of Marketing Science, 43(1), 115–135. https://doi.org/10.1007/s11747-014-0403-8
Lopez, B., Rangel, C., & Fernández, M. (2022). The impact of corporate social responsibility strategy on the management and governance axis for sustainable growth. Journal of Business Research, 150(July), 690–698. https://doi.org/10.1016/j.jbusres.2022.06.025
Made, E. I. D., Dicriyani, N. L. G. M., Adiyadnya, M. S. P., & Putra, I. P. M. J. S. (2020). The Effect of Green Accounting on Corporate Sustainability and Financial Performance. Journal of Asian Finance, Economics and Business, 7(12), 731–738. https://doi.org/10.13106/jafeb.2020.vol7.no12.731
Nair, R., Muttakin, M., Khan, A., Subramaniam, N., & Somanath, V. S. (2019). Corporate social responsibility disclosure and financial transparency: Evidence from India. Pacific Basin Finance Journal, 56, 330–351. https://doi.org/10.1016/j.pacfin.2019.06.015
Nguyen, T. H. N., Ha, H. T. V., & Loan, N. T. T. (2019). Green Accounting and Sustainable Development of Listed Vietnamese Enterprises. Journal of Asian Review of Public Affairs and Policy, 4(1), 26–42.
Nguyen, T. H., Vu, Q. T., Nguyen, D. M., & Le, H. L. (2021). Factors influencing corporate social responsibility disclosure and its impact on financial performance: the case of Vietnam. Sustainability, 13(8197), 1–16. https://doi.org/10.3390/su13158197
Orlitzky, M., Schmidt, F. L., & Rynes, S. L. (2003). Corporate social and financial performance: A meta-analysis. Organization Studies, 24(3), 403–441. https://doi.org/10.1177/0170840603024003910
Riyadh, H. A., Sukoharsono, E. G., & Alfaiza, S. A. (2019). The impact of corporate social responsibility disclosure and board characteristics on corporate performance. Cogent Business and Management, 6(1), 1–18. https://doi.org/10.1080/23311975.2019.1647917
Rockness, J. W. (1985). An Assessment of the Relationship Between US Corporate Environmental Performance and Disclosure. Journal of Business Finance & Accounting, 12(3), 339–354. https://doi.org/10.1111/j.1468-5957.1985.tb00838.x
Rodriguez-Fernandez, M. (2016). Social responsibility and financial performance: The role of good corporate governance. BRQ Business Research Quarterly, 19(2), 137–151. https://doi.org/10.1016/j.brq.2015.08.001
Sun, Y., Xu, C., Li, H., & Cao, Y. (2022). What drives the innovation in corporate social responsibility (CSR) disclosures? An integrated reporting perspective from China. Journal of Innovation and Knowledge, 7(4), 1–12. https://doi.org/10.1016/j.jik.2022.100267
Sutantoputra, A. W., Lindorff, M., & Prior Johnson, E. (2012). The relationship between environmental performance and environmental disclosure. Australasian Journal of Environmental Management, 19(1), 51–65. https://doi.org/10.1080/14486563.2011.646752
Tanwar, J., Vaish, A. K., & Rao, N. V. . (2018). Contribution of Corporate Social Responsibility Towards India in Achieving Inclusive Growth. IASSI Quarterly: Contributions to Indian Social Science, 37(3 & 4), 509–521. Retrieved from https://www.businessnewsdaily.com/4679-corporate-social-responsibility.html
Ting, P. H. (2020). Do large firms just talk corporate social responsibility? - The evidence from CSR report disclosure. Finance Research Letters, pp. 38, 1–8. https://doi.org/10.1016/j.frl.2020.101476
Tsalis, T. A., Malamateniou, K. E., Koulouriotis, D., & Nikolaou, I. E. (2020). New challenges for corporate sustainability reporting: United Nations’ 2030 Agenda for sustainable development and the sustainable development goals. Corporate Social Responsibility and Environmental Management, 27(4), 1617–1629. https://doi.org/10.1002/csr.1910
Wallace, R. S. O., & Naser, K. (1995). Firm-specific determinants of the comprehensiveness of mandatory disclosure in the corporate annual reports of firms listed on the stock exchange of Hong Kong. Journal of Accounting and Public Policy, 14(4), 311–368. https://doi.org/10.1016/0278-4254(95)00042-9
Wu, M. L. (2006). Corporate social performance, corporate financial performance, and firm size: A meta-analysis. Journal of American Academy of Business, 8(1), 163–171.
Published
2023-06-21
How to Cite
Tanwar, J., & Rao, N. (2023). IMPACT OF SOCIAL RESPONSIBILITY DISCLOSURE ON THE INTEGRATION OF GREEN ACCOUNTING AND CORPORATE GOVERNANCE ON HIGHLY POLLUTED INDUSTRIES IN INDIA. International Journal of Accounting & Finance Review, 14(2), 13-24. https://doi.org/10.46281/ijafr.v14i2.2027
Section
Regular Research Article/ Short Communication Article
Copyright (c) 2023 Jyoti Tanwar, NVM Rao
This work is licensed under a Creative Commons Attribution 4.0 International License.
