Corporate Governance and Sustainability Disclosure: An Empirical Analysis of Environmental Reporting Practices

Harris Javed, Marc Audi and Amjad Ali

MPRA Paper from University Library of Munich, Germany

Abstract: The rising worldwide concerns about climate change, environmental degradation, and sustainability issues have made environmental reporting more vital for corporate reporting systems. The study investigates how firm size and profitability, and corporate governance practices, impact the sustainability accounting and environmental reporting of listed companies. Panel data has been collected from 40 listed PSX companies from 2018 to 2025. The study applies panel regression to estimate the impact of independent variables on the dependent variable. The results show that organizational size hurts environmental reporting, because organizational size does not significantly determine sustainability disclosure practices. Environmental reporting shows a positive relationship with profitability, which remains statistically unproven because financial performance does not account for all differences in environmental disclosure. Environmental reporting shows a positive relationship with corporate governance, which holds statistical significance because governance structures play a vital role in promoting transparency and accountability, as well as sustainability disclosure. The study found that corporate governance stands as the primary element that determines environmental reporting for all companies in the selected sample. The findings show that strong governance mechanisms serve as a foundation that enables organizations to achieve higher levels of environmental transparency while maintaining their corporate accountability standards. The study expands the existing literature on sustainability accounting by delivering empirical results that explain the factors that determine environmental reporting while giving policymakers, regulators, and corporate executives valuable information about how to enhance sustainability disclosure practices.

Keywords: Environmental Reporting; Corporate Governance; Sustainability Accounting; Firm Performance (search for similar items in EconPapers)
JEL-codes: M14 M41 Q56 (search for similar items in EconPapers)
Date: 2026
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