Paulo Henrique Leal
Universidade Federal de Pernambuco, Brasil
E-mail: pa.henriqueleal@gmail.com
Raimundo
Nonato Rodrigues
Universidade Federal de Pernambuco, Brasil
E-mail: rnrdg@uol.com.br
Maurício
Assuero Lima de Freitas
Universidade Federal de Pernambuco, Brasil
E-mail: massuero@ig.com.br
Umbelina Cravo Teixeira Lagioia
Universidade Federal de Pernambuco, Brasil
E-mail: umbelinalagioia@gmail.com
Submission: 22/10/2018
Revision: 21/11/2018
Accept: 28/11/2018
ABSTRACT
This
study aimed to identify the determinant factors of Greenhouse Gases (GHG)
emissions disclosure in Brazilian companies. Therefore, a documental research
was conducted, in which we analyzed sustainability reports, provided by Global
Reporting Initiative (GRI) data and accounting statements of listed on stock
exchange Brazilian companies that published sustainability reports and
accounting statements for the year 2016. This is a descriptive research with
quantitative approach. Preliminarily, we identified information about
greenhouse gases emissions disclosed by
the sample companies by using a check-list developed from GRI guidelines about
emissions. Then, we applied the multiple linear regression analysis technique
to identify the disclosure determinant factors. Results showed that the
companies researched presented, in average, a low level of emissions
information disclosure. The regression
analysis showed that the variables participation in potentially polluting
sectors, participation in the GHG protocol, New Market governance level and
sustainability report publication in the GRI model were positively associated
with greenhouse gases emissions disclosure, while the company size variable
did not show association with statistical significance. Therefore, the results
allow us to infer that these variables can be considered determinant factors of
greenhouse gases emissions disclosure. In function of research limitations
related to sample size, shortage of other variables influencing the disclosure
of greenhouse gas emissions, as well as research over the years, it is
suggested future research considering a sample with companies from other
countries, including other variables and a longitudinal study to compare
disclosure in different institutional contexts over the years.
Keywords: Greenhouse Gases; Emissions; Brazilian Companies
1. INTRODUCTION
The raising awareness about the
impact of businesses gives support for the increase of the growing concern with
environmental questions regarding business actions. This concern revolves
around factors that demonstrate the adverse effects in the environment.
Greenhouse Gases (GHG) emissions indicate a substantial contribution to global
warming (FEARNSIDE,
2000).
In
this perspective, GHG emissions gain importance when related to the business
context. This way, companies are pressured to produce and disclose to their
stakeholders information about the impacts caused by their actions in the
environment.
According
to He et al. (2013), companies intensify the information
disclosure about emission in response to the challenges of climate changes and
their respective environmental impact. For Griffin,
Lont and Sun (2017), investors
consider emissions as a negative component of the business equity. Thus, the
disclosure of such information must be performed so that the stakeholders make
decisions with due knowledge of the impacts of that activity on the
environment.
Information
about greenhouse gases emissions are usually disclosed in the companies’
sustainability reports, and, in Brazil, the Global Reporting Initiative (GRI)
report model presents guidelines about which greenhouse gases emissions
information should be evidenced by the companies.
Among
the GRI environmental category guidelines, there are specific disclosure
demands of gases emissions for companies who opt to elaborate their reports
according to this report model.
According
to De Klerk and Villiers (2012), GRI guidelines form the structure more broadly
used for non-financial reports. Furthermore, the GRI model gives standardized
guidelines for company reports in the sense of disclose both positive and
negative aspects of the environmental performance (HAHN; LULFS, 2014). This
way, the present study will use GRI guidelines as parameter for information
disclosure about gases emissions.
Luo
and Tang (2014) claim that emissions disclosures have become increasingly
important as information for the stakeholders decision-making process.
Furthermore, emissions disclosures gain importance even to investors (LEE
et al., 2013; BLANCO et al., 2017; GRIFFIN et al., 2017) and creditors, since they can
evaluate the environmental risks of the companies with which they negotiate (KLEIMEIER; VIEHS, 2018). This way, we can demonstrate the relevance of studying
greenhouse gases emissions disclosure in the Brazilian context.
The Prado-Lorenzo
et al. (2009) study approached emissions disclosure according to GRI
guidelines, but, because of the year the study was conducted, the authors used
old GRI guidelines (G3). In the old GRI guidelines (G3) there were few
indicators regarding gases emissions and they were put together with effluents
and residues indicators.
From 2013 on,
with the emission of new GRI guidelines (G4), new indicators were added and
adapted to better represent the companies’ gases emissions before their
stakeholders. In this study, the greenhouse gases emissions disclosure vision
is presented under the GRI guidelines perspective (G4) using companies with high
polluting level and low polluting level listed in Brasil, Bolsa, Balcão (B3).
Grauel and
Gotthardt (2016) consider that environmental regulations and legal mechanisms
in the country’s institutional context are relevant instruments in emissions
disclosure. In Brazil, beyond the GHG program, which is a tool used to
understand, quantify and manage emissions, the Law 10.165/2000 differentiates companies
according to their polluting potential, dividing them in small, medium and
large polluting potential sectors. This legal instrument differentiates Brazil
from other countries that do not adopt this division of sectors with an
instrument with legal force. For this reason, based on Jaggi et al.
(2017), and Grauel and Gotthardt (2016), the most polluting Brazilian companies
are more exposed and can be forced to be more transparent about environmental
issues.
Various
studies have investigated this topic from the perspective of the accounting and
reduction of emissions (HASLAM et al., 2014;
CORDEIRO et al., 2016; AKAN et al., 2017; IMONIANA et al., 2017; LIN et al.,
2018; MARTIRE et al., 2018), as well as gases emissions disclosure by companies
(TAURINGANA; CHITHAMBO, 2015; BORGHEI et al., 2016; VOGT et al., 2016; BECKER; BAUER, 2017; PENCLE, 2017; BORGHEI et al., 2018;
BROADSTOCK et al., 2018).
In
Brazil, however, there are no studies about emissions disclosure according to
GRI guidelines (G4) that identify if companies of the most polluting sectors
are more transparent that those of less aggressive sectors regarding their
emissions. Therefore, the study is justified because it is different from the
contributions of existing studies, because of the country’s differentiated
institutional environment due to its legislation regarding companies in more
polluting sectors and less polluting sectors.
In face of this,
we formulated the following research question: Which are the determinant factors of information disclosure about
Brazilian companies’ greenhouse gases emissions? Thus, the research
objective was: To identify the determinant
factors of information disclosure about Brazilian companies’ GHG emissions.
To reach such
goal, we observed if the disclosure of greenhouse gases emissions information
is associated with factors such as company size, participation in potentially
polluting areas, participation in the GHG Protocol, governance level, and
sustainability report publication in the GRI model.
2. LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT
2.1.
Greenhouse
Gases Emissions Disclosure
The pollution caused by emissions represents the greatest environmental
risk to human health. This can result from adverse reactions at birth to
respiratory diseases in older people due to exposure to various emissions such
as particulate matter and other gases (WHO, 2016).
According to Hansen et al. (2000), accelerated global warming is driven
primarily by large amounts of GHG emissions and a scenery with emission
reductions could lead to a possible decline in global warming rates, reducing
the dangers of climate change in countries.
Samimi and Zarinabadi (2012) define GHG as a set of gases that maintain
the amount of solar energy in the atmosphere and causes it to get warmer, such
as Nitrogen Dioxide (NO2), Carbon Dioxide (CO2) and Methane (CH4). The
disclosure and transparency of such gases become important in the business
context in that they directly impact global warming.
In Brazil, the Greenhouse Gas Emission Estimate System (SEEG) shows the
evolution of emissions from all business sectors and shows that from 1990 to
2005 there was a considerable increase in the number of emissions, decreasing
from 2006 and increasing in 2013 to 2016 (SEEG, 2018). Thus, it is perceived
that the disclosure of such emissions is now considered as important in the
various sectors of the economy.
The term
disclosure means to spread or publicize information that might be useful to
reduce the information asymmetry, and one of its strands is called
discretionary-based disclosure, which is the base for the voluntary disclosure
theory (VERRECCHIA, 2001).
From
the perspective of accounting, Borghei et al. (2016) add that, in the absence
of norms and regulations, and considering the increasing demand for important
information to their stakeholders, some organizations have opted to evidence
additional items via voluntary disclosure, such as information about carbon and
gases emissions.
In
this perspective, Lee et al. (2013) assert that voluntary disclosures of carbon
emissions are considered rational companies’ choices aiming to attend the
stakeholders’ pressures as threats to the organization’s legitimacy.
Blanco
et al. (2017) revealed that the main factor in gases emissions disclosure
refers to the investors’ demands, illustrating the pressure of this stakeholder
for such information. Furthermore, the disclosure was also motivated, but less
so, by regulation, environmental concern, better business patterns,
transparency and reputation. Thus, the evidencing of information by companies
goes beyond eminently financial items, and also includes aspects concerning
environment such as gases emissions.
The
Peters and Romi (2014) study connects environmental corporate governance, by
means of the presence of an environmental committee in the company, with gases
emissions disclosures. For the authors, the presence of an environmental committee
and a sustainability director is positively associated with more emissions
disclosures. Furthermore, the authors claim that, despite they are
non-financial information, emissions disclosures express the exposition to
environmental risks and are related to the company’s future rentability.
Similarly,
for Jaggi et al. (2017), establishing environmental committees in the companies
encourages administrators to implement and adopt higher levels of information
disclosure about carbon emissions in the atmosphere. Besides, the authors
consider that the participation of institutional investors that usually have
long-term interest in the company force the administrators to adopt a more
transparent posture regarding information disclosure of carbon emissions due to
the demand for such information by the investors.
Regarding
the institutional environment of countries signatory of the emissions reduction
deal, Freedman and Jaggi (2011) demonstrated that companies of countries
belonging to the emissions reduction agreement of the Kyoto Protocol presented
information disclosures about emissions with higher frequency. The authors
consider that, in the absence of accession to the pact by the country, it might
be necessary obligatory mechanisms to enforce the companies to improve their
disclosures about emissions and pollution.
And
regarding the costs of companies’ loans, Kleimeier and Viehs (2018) claim that voluntary disclosures of carbon
emissions can generate a reduction of bank loans spreads, indicating that the
corporate financing costs are lower for companies that give voluntary
disclosures about carbon emissions due to the information provision about the
companies’ environmental risks.
In a vision that puts
emissions disclosure as a negative response catalyzer for the market, Lee et al. (2013) conclude that it might be possible
that the market responds negatively to the carbon emissions disclosures
considered bad news. In this sense, the authors’ study also grants relevance to
the emissions disclosure, since it demonstrates the utility of carbon emissions
information to the point of causing investors to react.
In the Brazilian context,
Vogt et al. (2016) explored how Brazilian companies showcase information about
environmental emissions. The authors claimed that most Brazilian companies’
emissions disclosures are descriptive and quantitative information, and they
verified that Brazilian companies do not tend to disclose information about
reducing emissions, i.e., positive information about emissions.
In Brazil, the GRI
standard sustainability report model prevails, which, according to Hahn and Lulfs (2014), provides global guidelines for
voluntary disclosure of sustainability-related aspects.
GRI guidelines for voluntary
disclosure cover the emissions aspect within the environmental category. This
aspect includes the disclosure of greenhouse gases emissions, substances that
destroy the ozone layer, and other atmospheric emissions, sorted as: Direct emissions, which come from their own operations; Indirect
emissions, those who come from power acquisition; and Other indirect emissions,
which are related to emissions that occur outside the organization, but are
linked to the company (GRI, 2013).
Although GRI guidelines do not have
legal force to oblige companies to follow theirs standards, in opting for this
model, the organization must follow its guidelines in order to offer standard
information to the stakeholders.
2.2.
Empirical
Studies and Hypotheses Development
Prado-Lorenzo et
al. (2009) conducted a study to identify the determinant factors of GHG
emissions disclosure using a sample with reports from the year 2005 of
companies all around the world using GRI G3 guidelines. The authors found out
that the size of the company positively influences the GHG emissions disclosures.
Blanco et al. (2017) used the content analysis of annual reports to
evaluate voluntary disclosure of gases emissions in registered Australian
companies (with more intensive levels) and non-registered in the NGER (National
Greenhouse and Energy Reporting) of the years 2009 and 2011. The study results
showed that the disclosure level in 2011 was significantly higher than in 2009.
Besides, they found out that non-registered companies had a significantly
higher disclosure than registered ones, which is consistent with the voluntary
disclosure theory, since non-registered companies disclosed more because they
had less negative information and more positive ones.
In 2015, the 21st Conference of the Parties (COP-21) took place, which
was a global agreement on climate change adopted in Paris focused on the
reduction of GHG emissions, where too took place the 11th Meeting of the
Parties to the Kyoto Protocol (MOP-11) about climate changes. With a sample of
the largest companies in the chemical products, oil and gas, energy, motor
vehicles and accident insurance, Freedman and Jaggi (2005) investigated the
disclosure of companies from countries that ratified the Kyoto Protocol in
comparison with other companies. The authors showed that companies from
countries that adhered the Kyoto Protocol have higher levels of pollution and
greenhouse gases emission disclosure, and also that larger companies tend to be
more transparent about such information.
In this same context, Liu and Yang (2018) investigated if companies more
sensible to greenhouse gases emissions disclosed more information of such
nature in their annual reports and independent reports, and how they respond to
legal and mandatory mechanisms of greenhouse gases reduction such as The
Climate Change Act in the United Kingdom. The authors identified that emissions
disclosures increased along the years, as a response to the United Kingdom’s
legal mechanisms.
Hahn and Lulfs (2014) study presents GRI guidelines for making
sustainability reports as a standard that pressures the company into disclosing
environmental information, emissions and other aspects regarding environmental,
social and economic aspects, either they are positive or negative
(GALLEGO-ÁLVAREZ et al., 2018). Therefore, GRI-modeled reports tend to present
information disclosure about greenhouse gases emissions because of the
guidelines’ pressure for environmental information transparency.
Grauel and Gotthardt (2016) studied the relevance of the national
context when there is normalization and environmental regulations in carbon
emissions disclosure. Results showed that environmental regulations are
explanatory factors and very relevant in the carbon emissions disclosures by
the companies. For the authors, voluntary disclosure is more evident in
emerging countries with stronger environmental regulations.
More recently, Borghei et al. (2018) conducted a study to demonstrate
the cost-benefit ratio of emissions disclosure, examining the impact of
greenhouse gases voluntary disclosure over the company’s accounting
performance. Using a sample with Australian companies, the authors confirmed
that greenhouse gases emissions disclosure is positively related to the
accounting performance, which is consistent with the cost-benefit structure of
the voluntary disclosure, since companies support the costs of the disclosure
to obtain the benefits of being more transparent companies regarding emissions.
De Abreu, Albuquerque and Oliveira
(2016) examined the influence of institutional pressures in the carbon
emissions controls disclosure in oil and gas companies. A sample of 35
sustainability reports of American, European and Asian companies was used. It
found out that companies are mainly exposed to pressures from the normative
cornerstone, pointing to the adoption of a high-level disclosure with a proper
internalized behavior as a code of conduct to be observed. Besides, results
also presented evidence to support that companies are subject to low coercive
pressures due to the lack of legislation and inspection about carbon emissions
disclosure.
With a sample of Australian
companies, Elsayih et al. (2018) conducted a study aiming to identify the
association between corporative governance mechanisms and carbon emissions
voluntary disclosure from 2009 to 2012. The authors found out that some
corporative governance mechanisms positively associated with information
disclosure and transparency about carbon emissions.
In the same line, Kılıç and Kuzey
(2018) also investigated corporative governance impacts on the carbon emissions
voluntary disclosures in annual and sustainability reposts of Turkish companies
listed in the Istanbul stock market. The study results showed that companies
with corporative governance mechanisms such as board independence are more
likely to disclose carbon emissions. Besides, the authors evidenced that the
existence of a sustainability committee positively influences carbon emissions
disclosure and its length.
Faisal et al. (2018) noticed that some factors such as profitability,
leverage and company size were positively associated with greenhouse gases
emissions disclosure. For the authors, this emissions disclosure is used by
companies as a way of reducing the many stakeholders’ pressures.
Regarding feminine participation in the board, Hollindale et al. (2016)
investigated if the participation of women in administration boards of
Australian companies was related to the disclosure and quality of reports about
greenhouse gases emissions. The study results indicated that companies with
feminine participation in administration boards conducted more disclosures
regarding greenhouse gases emissions, as well as higher quality disclosures.
Companies
belonging to more polluting sectors covered by emissions regulation programs
present higher carbon emissions disclosures (RANKIN et al., 2011), at the same
time meeting the expectations of investors interested in environmental impact
information, specifically about emissions.
In the Jaggi et al. (2017) study, the authors claimed that companies of
high-polluting sectors and sectors that are more sensible to carbon emission
are under greater pressure to disclose information about carbon emissions when
compared with others. Besides, the authors confirmed that that companies of
high-polluting sectors and sectors that are more sensible to carbon emission
are more encouraged to be more transparent and try to become legitime before
their stakeholders.
Thus, the present study formulated
five research hypotheses, considering that previous studies pointed to many
factors associated with carbon and greenhouse gases emissions disclosure, such
as: sectors with higher levels of pollution and legal environmental regulation instruments,
the company’s register and participation in environmental efficiency programs,
corporative governance mechanisms and diversity inclusion in administration
boards, adoption of an environmental report standard with pressure to disclose,
performance and company size. Therefore, we present five study hypotheses:
Figure 1 synthetizes the study’s framework, whose description and
theoretical and empirical justifications were previously presented to build the
research hypotheses.
Figure 1: Study framework
Source: Elaborated by the authors
The proposed hypotheses are considered factors that influence the GHG
emissions disclosure, considering B3-listed companies of the Brazilian
institutional environment.
3. METHODOLOGY
The present study is characterized as a bibliographical, descriptive and
documental research, considering that bibliographical analyses were conducted,
as well as documental analyses in reports of the sample companies. The nature
of the research is qualified as quantitative, since it was used the multiple
linear regression statistical technique to test the determinant factors in the
greenhouse gases emissions disclosure.
To compose the sample, we used every B3-listed companies
with sustainability report publication for the year 2016. We observed Law
10.165/2000, that regulates the National Environmental Policy. This law
classifies economic activities of various sectors acting in Brazil as of low,
medium or high polluting potential, and, in this study, we used the companies
listed in sectors considered of high polluting potential, in comparison to the
medium and low polluting potential companies.
According to Law
10.165/2000, 16 segments considered of high polluting potential listed in B3
were enumerated: Metallic minerals; Copper and steel
artefacts; Steel industry; Cleaning products; Personal use products; Paper and
cellulose; Fertilizers and pesticides; Petrochemicals; Various chemicals;
Exploration and/or refinery; Medication and other products; Air transportation;
Railway transportation; Water transportation; Road transportation. The
remaining sectors of the B3 list were considered of medium and low polluting
potential.
According to the data collected from GRI in July 2018, 104 B3-listed
companies with sustainability reports in the GRI model or not for the year of
the research were initially identified. Of these, 27 were excluded for not
presenting all the necessary information for analysis regarding the year of
2016, resulting in a final sample of 77 companies.
The data collect was conducted using the Bardin (2011) content analysis
technique, using key-words research in the sustainability reports of the
researched companies to compose the dependent variable of the study, greenhouse
gases emissions disclosure. To collect the independent variables data, we
accessed the companies’ websites, the Gases Emissions Public Registry, the B3,
as well as GRI information and accounting statements of the sample companies.
The collect was conducted during July and September 2018 about the analysis
period of the 2016 social exercise.
In the variable dependent data collect, the search
for key-words was conducted to build a greenhouse gases emissions disclosure
level (DIVGEE) according to a check-list built following GRI guidelines about
the emissions aspect. This way, a check-list consisting of 26 disclosure items
was elaborated, according to Frame 1.
Frame 1: Information
items to be disclosed about emissions according to GRI guidelines
GRI Indicators Group |
Disclosure items |
Greenhouse Gases (GHG) Direct Emissions |
1. Direct brut emissions of GHG
in tons of CO2 (Scope 1) 2. Gases included in the direct
brut emissions calculation 3. Norms, methodologies and
premises adopted for the direct brut emissions |
Greenhouse Gases (GHG) Indirect Emissions From Power Acquisition |
4. Indirect GHG emissions from
power acquisition in tons of CO2 (Scope 2) 5. Gases included in the
indirect emissions calculation 6. Norms, methodologies and
premises adopted for the indirect emissions |
Other Greenhouse Gases (GHG) Indirect Emissions |
7. Other indirect emissions of
GHG in tons of CO2 (Scope 3) 8. Gases included in the other
indirect emissions calculation 9. Norms, methodologies and
premises adopted for the other indirect emissions |
Greenhouse Gases (GHG) Emissions Intensity |
10. GHG emissions intensity rate 11. Types of GHG emissions
included in the intensity level: direct (Scope 1), indirect (Scope 2) or
other indirect emissions (Scope 3) 12. Gases included in the
intensity rate calculation of the GHG emissions |
Greenhouse Gases (GHG) Emissions Reduction |
13. GHG emissions
reductions volume obtained as a direct result of emissions reduction
initiatives, in equivalent CO2 tons 14. Gases included in
the GHG emissions reductions volume calculation 15. Norms,
methodologies and premises adopted for the GHG emissions reductions 16. If the GHG
emissions reductions were obtained for direct emissions (Scope 1), indirect
emissions (Scope 2) or other emissions (Scope 3) |
Emissions of Substances that Destroy the Ozone Layer (SDO) |
17. Production, importations and exportations of SDO
in equivalent CFC-11 tons 18. Substances included in the production,
importations and exportations of SDO calculation 19. Norms, methodologies and premises adopted for
the production, importations and exportations of SDO |
Emissions of NOX, SOX and
Other Significant Atmospheric Emissions |
20. Volume of
atmospheric emissions for the NOx category 21. Volume of
atmospheric emissions for the Sox category 22. Volume of
atmospheric emissions for the Persistent organic pollutants (POP) category 23. Volume of
atmospheric emissions for the Volatile organic composts (VOC) category 24. Volume of
atmospheric emissions for the Dangerous atmospheric pollutants (DAP) category 25. Volume of
atmospheric emissions for the Particulate matter (PM) category 26. Norms,
methodologies and premises adopted for the atmospheric emissions volume |
Source:
Adapted from the GRI G4 guidelines model (2013)
Dichotomous information about items to be disclosed by the sample
companies were considered, with the attribution of score “1” in the case of the
company that disclosed such item according to the check-list, and “0” for when
the company did not disclose such item.
In face of this, the study’s dependent variable
(DIVGEE) was built from the sum of the greenhouse gases emissions information
disclosures. As for the independent variables, the proxies and calculations of
Frame 2 were used.
Frame 2: Definition
and operationalization of the independent variables
Independent/control
variable |
Proxy
used |
Calculation
formula |
Theoretical
substantiation |
Participation in potentially polluting
sectors (Pol Dummy) |
Dummy
variable according to the list of high polluting potential sectors |
“1” when the company is listed in the
high polluting potential sectors, and “0” if it is not |
Rankin et al. (2011), Jaggi et al. (2017), Liu and
Yang (2018) |
Participation in the GHG (GHG Dummy) |
Dummy
according to the participation in the GHG protocol |
“1” when the company is part of the GHG
protocol program, and “0” if it is not |
Blanco et al. (2017), Liu and Yang (2018) |
Governance Level 1 (GovN1 Dummy) |
Dummy
variable for the Level 1 of governance according to the B3 |
“1” when the company has corporative
governance Level 1, and “0” if it has not |
Elsayih et al. (2018), Kılıç and Kuzey (2018) |
Governance Level 2 (GovN2 Dummy) |
Dummy
variable for the Level 2 of governance according to the B3 |
“1” when the company has corporative
governance Level 2, and “0” if it has not |
Elsayih et al. (2018), Kılıç and Kuzey (2018) |
New market (GovNM Dummy) |
Dummy
variable for the New Market governance level according to the B3 |
“1” when the company has corporative
governance Level New Market, and “0” if it has not |
Elsayih et al. (2018), Kılıç and Kuzey (2018) |
Report publication in the GRI model (GRI
Dummy) |
Dummy
variable according to the sustainability report publication in the GRI model |
“1” when the company publishes the
sustainability report in the GRI model, and “0” if it does not |
Hahn and Lulfs (2014) and Gallego-Álvarez et al. (2018) |
Company size (TAM) |
Total asset |
Natural logarithm of the Total asset |
Prado-Lorenzo et al. (2009) and Faisal et al. (2018) |
Source: Elaborated by the authors
The dummies variables governance levels (GovN1 Dummy, GovN2 Dummy, GovNM Dummy) had as reference the B3 traditional governance segment GovTrad Dummy
(Dummy excluded from the model to avoid multicollinearity).
Because of the research’s objective, the following model of multiple
linear regression was built, with greenhouse gases emissions disclosure as
dependent variable:
DIVGEE = β0 + β1 Pol Dummy + β2 GHG Dummy + β3 GovN1 Dummy + β4 GovN2 Dummy + β5 GovNM Dummy + β6 GRI Dummy + β7 TAM + ε (1)
For the data analysis, the multiple linear
regression statistical analysis technique was used to verify influencing
factors in the greenhouse gases information disclosure, considering the
confidence level of 90, 95 and 99%. The data were analyzed with the help of “R”
software (R CORE TEAM, 2018) version 3.1.5.
4. RESULTS ANALYSIS
To reach the
objective of this work, 26 disclosure items regarding greenhouse gases emission
were analyzed, according to the check-list elaborated according to GRI
guidelines.
Regarding the disclosed items, we verified that the sample companies
disclosed, in average, 5.52 of a total of 26 items about greenhouse gases emissions,
with a standard deviation of 5.67. this demonstrates a low disclosure average,
since it represents only 21.2% of the total items that should be disclosed. In
face of this, we can assert that companies end up not evidencing important
items for both the stakeholders and the investors, considering the emissions
information is important for investors (BLANCO et al., 2017; GRIFFIN et
al., 2017), and for the decision-making process of the many stakeholders (LUO; TANG, 2014).
We noticed that the company that disclosed the most greenhouse gases
emissions information evidenced 24 of a total of 26 items, which represents
more than 92% of those that should be disclosed; meanwhile, some companies of
the sample disclosed none of the items. This demonstrates that at least one
company presented a high level of disclosure, meeting the expectations of
investors (GRIFFIN et al., 2017) and stakeholders (LUO; TANG, 2014), while others did not present any disclosure. Besides, it was possible
to notice that the items most disclosed by the companies were direct brut
emissions (scope 1), and indirect emissions (scope 2).
Table 1: Shapiro-Wilk normality test
Shapiro-Wilk normality test |
||
W statistic |
P-value |
|
0.975 |
0.136 |
Alternative hypothesis: the residues are abnormal
Source: Elaborated by the authors
The Shapiro-Wilk normality test presented the expected
result, since, as it can be seen in Table 1, it does not reject the null
hypothesis that the residues are normal to the significance level of 5%,
considering that the p-value of the test was higher than 0.05, i.e., the
researched sample comes from a normal population.
Table 2: Breusch-Pagan Test for homoscedasticity
Breusch-Pagan Test for
homoscedasticity |
||
BP Test |
P-value |
|
10.315 |
|
0.171 |
Alternative hypothesis: the variance is not constant
Source: Elaborated by the authors
According to Table 2, there is evidence not to reject
the null hypothesis of constant variance to the significance level of 5%,
considering that the p-value of the test was higher than 0.05, which allows us
to assert the homoscedasticity of the data
Aiming to identify the ratio between the independent
variables and the dependent variable (greenhouse gases emissions disclosure)
the multiple linear regression analysis was applied. Thus, determinant factors
of greenhouse gases emissions disclosure were identified, as can be seen in
Table 3.
Table 3
demonstrates that the regression model is significant to the level of 1%. R²
demonstrates that the independent variables set explains 43.2% of the dependent
variable, greenhouse gases emissions disclosure level (DIVGEE). The R² result
indicates that the model is a good adjustment to explain the greenhouse gases
emissions disclosure.
Regarding the
collinearity statistics, we can see that the ratios between independent
variables (Pol Dummy, GHG Dummy,
GovN1 Dummy, GovN2
Dummy, GovNM Dummy, GRI Dummy and TAM) and the
dependent variable (DIVGEE) did not present problems with multicollinearity,
since the VIF (Variance Inflation Factor) values were low.
Table 3: Regression model
Variable |
Coefficients |
Standard error |
T statistic |
P-value |
Collinearity statistic |
VIF |
|||||
(Constant) |
-3.013 |
5.451 |
-0.553 |
0.582 |
- |
Pol Dummy |
2.950 |
1.286 |
2.293 |
0.024** |
1.089 |
GHG Dummy |
5.409 |
1.246 |
4.340 |
0.000*** |
1.485 |
GovN1 Dummy |
0.321 |
1.878 |
0.171 |
0.864 |
1.525 |
GovN2 Dummy |
2.586 |
1.928 |
1.341 |
0.184 |
1.468 |
GovNM Dummy |
2.548 |
1.328 |
1.918 |
0.059* |
1.686 |
GRI Dummy |
2.939 |
1.487 |
1.976 |
0.052* |
1.188 |
TAM |
0.063 |
0.348 |
0.183 |
0.855 |
1.482 |
R² = 0.432 |
F = 0.000 |
Nº of observations: 77 |
Significance level: *** 0.01; ** 0.05; * 0.1
Dependent variable: DIVGEE
Source: Elaborated by the authors
The regression
analysis indicated that greenhouse gases emissions disclosure (DIVGEE)
positively associates with the Participation in potentially polluting sectors
variable (Pol Dummy) to the
significance level of 5%, as it can be seen in the positive beta coefficient
and p-value lower than 0.05, respectively. This association demonstrates that
companies present in sectors considered to be potentially polluting tend to
present higher levels of greenhouse gases emissions disclosure if compared to
companies that do not belong to these sectors. This result corroborates the
results of the Jaggi et al. (2017) and Rankin et al. (2011) studies.
The companies’
participation in more polluting sectors might generate a larger exposure of the
company and propitiate a higher transparency level about environmental issues
and greenhouse gases emissions (JAGGI et al. 2017), and, in Brazil, such
exposure might be propelled because of the pressure put on by the legislation
that puts companies in sectors considered high pollutant, and can also refer to
the meeting of investors’ expectations regarding environmental information and
GHG emissions disclosure from companies of more polluting sectors (RANKIN et
al., 2011; GRIFFIN et al., 2017), considering that the emissions disclosure is
positively related to the financial performance (BORGHEI et al., 2018),
profitability and company leverage (FAISAL et al., 2018).
Although the
legislation separates business sectors and puts companies in a highly pollutant
rate, it does not demand the disclosing of environmental and emissions
information, but it ends up pressuring companies to be more responsible and
transparent before the society and stakeholders in general. Thus, the
environmental regulation brought by the law that separates companies between
high, medium and low polluting potential becomes relevant in the Brazilian
institutional context regarding emissions and pollution reduction information
disclosure (GRAUEL; GOTTHARDT, 2016).
Therefore,
results suggest the acceptance of the study’s hypothesis , confirming
that companies listed in potentially polluting sectors tend to present higher
levels of greenhouse gases emissions disclosure, thus this being considered a
determinant factor for the information disclosure of such nature.
Regarding the
participation in the GHG protocol (GHG Dummy),
it was also found a positive association with the significance level of 1%,
considering the positive beta coefficient and p-value lower than 0.01. This
indicates that companies that take part of the Brazilian GHG Protocol Program
have the tendency to disclose more information about greenhouse gases emissions
in relation to companies that are not part of the program.
Results
corroborate the studies of Rankin et al. (2011) and Liu e Yang (2018),
considering that, despite not having legal force, environmental programs such
as GHG and others generate higher visibility for the company, that tends to
increase its disclosure by joining these programs. The higher level of
disclosure by companies that are part of the GHG program might also be related
to pressures for a proper behavior as code of conduct (DE ABREU et al., 2016)
to be followed by the companies that take part of the GHG protocol program.
This way,
results provide evidence to support the study’s hypothesis that companies that are included in
the GHG Protocol Brazilian Program of Emissions Public Registry tend to present
higher levels of information disclosure about greenhouse gases emissions.
Concerning the
corporative governance levels variables, variables Level 1 (GovN1 Dummy),
Level 2 (GovN2 Dummy) and New Market (GovNM Dummy) were tested, in comparison
with the B3 corporative governance Traditional Level. This way, Level 1 (GovN1 Dummy)
and Level 2 (GovN2 Dummy) variables did not present
significant results.
The New Market
variable (GovNM Dummy) presented
positive and significant association only to the 10% level. This way, we can
say that companies of the B3 New Market segment tend to present higher levels
of information disclosure concerning greenhouse gases emissions. The presence
of higher corporative governance standards as a positive influence in the carbon
and greenhouse gas emissions disclosure was also evidenced by Kılıç and Kuzey
(2018), with Turkish companies, and by Elsayih et al. (2018) in Australia,
corroborating the results of this study.
Results
demonstrate that companies with higher governance standards are motivated to
adopt a more transparent posture before their investors and other stakeholders,
in order to reduce asymmetry of information according to the discretionary
disclosure proposed by Verrecchia (2001), since the New Market governance segment
demands a higher level of transparency from the companies. Thus, the higher
governance level can also be considered a determinant factor, alongside
financial information disclosure, in the environmental and greenhouse gases
emissions information disclosure, supporting the study’s hypothesis.
When testing the
ratio with the sustainability report publication in the GRI model variable (GRI Dummy), we found positive and significant
association to the level of 10%.
This
result allows to infer that companies that publish their reports according to
the GRI standard tend to present higher levels of GHG emissions information disclosure, corroborating Hahn
and Lulfs (2014), who consider GRI guidelines a standard that pressures the
companies that adopt it to disclose environmental and emissions information.
This result allows to support the acceptance of the study’s hypothesis.
Concerning the
company size variable (TAM), the regression did not present significant ration.
This way, it is not possible to deduce that larger companies tend to present a
lower level of GHG emissions information disclosure. This result does not allow
to support the acceptance of the study’s hypothesis that larger companies tend to
present higher levels of GHG emissions information disclosure.
5. CONCLUSIONS
The present
study aimed to identify the determinant factors of B3-listed Brazilian
companies’ GHG emissions information disclosure, using a sample of 77 companies
that had their accounting information and sustainability reports made publicly
available. For such, a bibliographical and documental research was conducted
with secondary data of accounting statements and sustainability reports of the
sample’s companies.
Based on the
research data, it was verified that the
companies researched presented, in average, a low level of GHG emissions
information disclosure according to the check-list
made, failing to provide relevant information to the investors and
stakeholders.
The study’s
starting point was the proposition of hypotheses , , , and , developed
according to the theory and previous studies about the association between GHG
emissions information disclosure and participation in potentially polluting
sectors, participation in the GHG Protocol Program, governance level,
compliance to GRI guidelines for sustainability reports, and company size,
respectively.
It was found,
using the regression analysis, that the participation in potentially polluting
sectors (Pol Dummy), participation in the GHG Protocol (GHG Dummy),
New Market governance level (GovNM Dummy) and sustainability report in
the GRI model (GRI Dummy) variables associated positively with
greenhouse gases emissions information disclosure, considering the researched
companies. This result allows to deduce that companies of more polluting
sectors, companies that take part of environmental programs such as the GHG
protocol, companies of higher corporate governance levels and companies who
publish sustainability reports in the GRI model tend to present higher levels
of greenhouse gases emissions information disclosure.
The research
results support the acceptance of hypotheses , , and , considering
that positive associations of the variables that can be considered determinant
factors of the B3-listed Brazilian companies’ greenhouse gases emissions
information disclosure. The results found were not consistent with the
acceptance of the study’s hypothesis , since it was
not found any association between greenhouse gases emissions information
disclosure and company size, which does not allow to infer that company size is
a determinant factor in the disclosure of such information.
The
findings can be considered consistent with the greenhouse gases emissions
information disclosure aimed to the compensation of its impact in society, as
well as to meet the concerned public’s expectations in order to gain
legitimacy.
Therefore, companies
from more polluting sectors adopt a posture of higher disclosure as a way to
explain to their stakeholders that, despite being considered more pollutant,
they try to repair damages and be more transparent before the interested
public, as well as being pushed, in Brazil, by the pressure of legislation that
separates companies into sectors according to their polluting potential, since,
the country’s environmental regulation becomes a relevant factor for the
disclosure increase.
Pressures to
adopt a proper behavior and a code of conduct can also be observed by companies
that take part of environmental programs such as the GHG protocol, as well as
factors regarding reduction of informational asymmetry through corporative
governance, as in the case of companies of New Market who presented higher
levels of disclosed in comparison with companies with a lower governance
standard.
Despite the
importance of the results found in the research, some limitations can be
pointed out, such as the study sample size, which limits the generalization of
results for other countries, the lack of other variables that might also be
demonstrated as GHG emissions information disclosure influencers, and lack of a
longitudinal study to investigate the results throughout the years.
As suggestions
for future researches, we recommend the conduction of a longitudinal study
through the years, the conduction of a study with companies from other
countries to compare the disclosure in different environments with different
institutional characteristics of legislation, norms and cultures, as well as
the inclusion of other variables associated with corporate governance that
reveal themselves to influence disclosure such as female board membership, CEO
duality, and board independence.
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