Enhancing sustainable development through effective disclosure: Corporate environmental performance and readability

Kuo Zhou, Xianghui Jin, Xinru Li and Yunqing Tao

Corporate Social Responsibility and Environmental Management, 2024, vol. 31, issue 1, 274-291

Abstract: Although previous studies have explored the effect of corporate environmental performance on the content of environmental disclosure, little research has investigated its impact on the textual characteristics of environmental disclosure, particularly readability. This study constructs three measures of corporate environmental disclosure (CED) readability and examines the effect of corporate environmental performance on it. Using panel data from Chinese listed firms in heavy pollution industries during the period from 2008 to 2019, we find a robust positive association between corporate environmental performance and CED readability. Furthermore, we find that this association is stronger in firms with worse earning performance, stricter regional environmental regulation, or more media attention. Our analyses also reveal a positive association between CED readability and stock price crash risk. Overall, our study contributes to the research on corporate environmental performance and environmental disclosure readability and has important implications for optimizing the regulations of environmental disclosure. Our study contributes to the literature on corporate environmental performance and environmental disclosure and also provides important theoretical and practical implications for improving corporate environmental disclosure regulation.

Date: 2024
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https://doi.org/10.1002/csr.2569

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Persistent link: https://EconPapers.repec.org/RePEc:wly:corsem:v:31:y:2024:i:1:p:274-291

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