Corporate Environmental Disclosure Practices of Oil and Gas Industry of India An Empirical Analysis

Abstract

Global environmental sustainability issues have gained greater significance leading to socio- political pressure on companies to mitigate and prevent adverse impact of their activities on the environment. The demand of higher disclosure for stakeholders and the significance of effective corporate governance systems have actuated the need for further research on the value addition of corporate environmental disclosure (CED) practices for stakeholders. The current study aims at empirically investigating the CED practices in annual reports by Indian oil and gas industry. This study attempted to analyse the sample companies order of preference for disclosing the environmental aspects in the annual reports. Strength and direction of correlations between CED scores and corporate governance variables were also verified in this study. Finally, relationship between CED and each of the seven corporate governance mechanisms was empirically examined, while controlling three corporate characteristics. newlineA checklist for environmental indicators from GRI environmental reporting framework was used to compute CED scores for sample firms. Content analysis of the 29 listed and unlisted Indian oil and gas companies annual reports for the financial year 2019-2020 was undertaken to compute the level of CED practices. Dichotomous coding system was adopted to assess the environmental disclosure indicators. newlineThis study revealed a low level of CED practices by the oil and gas industry in India, however large companies demonstrated increased environmental concerns through higher CED level in their annual reports. Value chain analysis for the oil and gas firms in India documented a statically significant higher CED practice by downstream companies than upstream firms confirming influence of complexity of refining process on environment. This observation filled in a knowledge gap of CED by oil and gas industry that requires policy intervention to improve upon environmental monitoring of the upstream companies.