The path to sustainability: Understanding organisations’ environmental initiatives and climate change in an emerging economy

Abstract

Purpose: Climate change has become an increasingly important issue globally, and organisations are being urged to be more carbon friendly by taking initiatives to reduce carbon emissions in their business operations. The purpose of this paper is to examine the extent to which climate change has been addressed and the influence of financial strength and corporate governance structure on the disclosure of carbon information. Design/methodology/approach: The research process consists of an investigation via content analysis of the annual and sustainability reports of the top 100 public-listed companies in Malaysia for the year 2017. Findings: The results of the study revealed that carbon information on carbon emissions accounting had the highest disclosure and that climate change risks and opportunities had the lowest disclosure. The results of the multiple regression analysis revealed that profitability is positively significant with carbon disclosure while leverage is negatively significant. However, the governance structure does not seem to have any influence on the disclosure of carbon information. Research limitations/implications: The conclusions drawn from the study must be interpreted with caution as the sample companies only comprise of the top 100 public-listed companies in Malaysia to provide an initial insight into the situation in Malaysia. Furthermore, the interpretations and conclusions drawn from this study are based solely on a cross-sectional analysis of the data for only one year. Practical implications: This finding is a significant contribution to regulatory bodies and policymakers regarding the drivers of climate change initiatives in an emerging economy such as Malaysia. This finding suggests that in the Malaysian setting, financial structure influence decisions on climate change initiatives. Social implications: The commitment by business leaders of the impact on climate from the production processes would contribute towards a low carbon economy and subsequently improve the quality of life of the community. Originality/value: The findings of the study provide insight of the business attitude towards climate change in an emerging economy such as Malaysia.