Audit committee governance and climate change disclosures: regulatory reform and COVID-19 aftermath in emerging economy

Anup Kumar Saha, Nahid Jahan and Imran Khan

Asian Review of Accounting, 2025, vol. 34, issue 5, 1051-1077

Abstract: PurposeThis study examines how audit committee (AC) characteristics influence climate change disclosure (CCD) within an emerging economy context, focusing on Bangladesh during both the pre- and post-COVID-19 periods. It extends prior research by analysing how governance mechanisms perform under crisis conditions and within a regulatory framework shaped by Bangladesh Bank’s Green Banking Guidelines.Design/methodology/approachUsing panel data from 40 listed banks and non-bank financial institutions (NBFIs) over 2015–2022, the study employs industry-fixed effects and two-stage least squares (2SLS) regression models to assess the influence of AC size, expertise, independence and meeting frequency on CCD. The disclosure index is developed following the Bangladesh Bank Green Banking Guidelines (2020).FindingsResults reveal that AC size, expertise and meeting frequency significantly enhance CCD, suggesting that larger, more skilled and active committees strengthen environmental accountability. However, AC independence shows no significant effect, indicating that independent members may have limited influence in emerging markets.Research limitations/implicationsFuture studies could extend this research by including firms across other sectors or comparing results with other emerging economies to validate the findings.Practical implicationsThe findings provide actionable guidance for policymakers and regulators seeking to enhance environmental transparency through stronger AC oversight and expertise requirements.Social implicationsThe study highlights the vital role of AC competence and regulatory pressure in advancing corporate responses to climate risks, supporting sustainability goals in emerging markets.Originality/valueThis study is among the first to evaluate AC governance and environmental disclosure behaviour across pre- and post-pandemic periods in a developing economy. By integrating crisis context, regulatory influence and committee-level dynamics, it offers novel insights into how AC structures drive sustainability reporting under institutional reform and uncertainty.

Keywords: Audit committee; Climate change disclosure; Green banking; COVID-19; Emerging economy; Bank and non-bank financial institutions (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:arapps:ara-06-2025-0202

DOI: 10.1108/ARA-06-2025-0202

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