Environmental disclosure and performance reporting in Malaysia
Emerald Group Publishing Limited
Faculty of Business and Law
School of Accounting, Finance and Economics
Purpose: The purpose of this paper is to examine the extent to which the environmental disclosures in annual reports of companies listed on the Kuala Lumpur Stock Exchange are associated with corporate characteristics. Design/methodology/approach: A rating system for environmental disclosures was developed, based on a review of previous studies, embracing industry membership, financial performance, share price fluctuations, political cost proxies, dependence on debt and the capital market. Findings: The findings suggested that environmental disclosure is negatively associated with company financial performance. A significant inverse relationship between disclosure score and return on assets is apparent, suggesting that environmental disclosure in Malaysia has different priorities from disclosures elsewhere. Originality/value: This study is the first of its kind to be conducted in Malaysia, and its empirical findings complement the expectations of prior studies.