Social responsibility amongst various components of the society has started imposing pressure on organizations in reducing their industrial activities which impact the nature adversely. The business entities have started taking care of the nature, which is their primary source of production. In order to attain public interest, the companies have started disclosing information regarding environment-related costs and benefits in their periodic report. The purpose of the present study is to determine the factors that influence environmental disclosures of companies doing business in India. First, the paper talks about the status of environmental disclosure practices by framing Environmental Disclosure Index (EDI) based on Global Reporting Initiative (GRI) guidelines. The descriptive analysis shows a low level disclosure of environmental information, but the year-wise performance shows an increasing trend suggesting that firms in India have realized the importance of environmental reporting. Using panel data regression model, it is found that company size, board size, foreign ownership and environmental certification are important factors in explaining environmental disclosure practices. Developing countries like India should make it mandatory for companies to disclose information on environmental issues in their periodic reports for better sustainable development.

Over the past four-and-a-half decades, there has been a growing realization among the organizations to look after the environment which is their primary source of production. Environmentally aware stakeholders have started counting on companies’ environmental performance to make sound investment decision (Cormier et al., 2005; and Ortas et al., 2014). In order to meet the growing demands of the stakeholders and NGOs, corporates are instigated to perform on these issues and disclosing the same, after measuring them voluntarily, in their periodic reports. At the same time, the companies are facing challenges in determining sustainable true profits as measuring all environmental costs and benefits in monetary term is a difficult task (Chauhan, 2005). The reason behind this is that till today there are no accounting standards specifically designed to deal with environmental issues. As a result of this, many study groups have shown interest in developing guidelines on reporting environmental issues1.


Developed countries like Australia, Belgium, Denmark, European Union, Norway, the Netherlands, Spain, Sweden, US and UK have made it mandatory for companies to disclose environmental issues in their periodic reports. Besides, many developing countries like Bulgaria, Bangladesh, Italy, Korea, Malaysia, Poland, South Africa and Sri Lanka have also started taking initiatives regarding their economic entities of certain stature to report on environmental and social issues (KPMG, 2002). In India, for the purpose of standardizing environmental reporting, the Government of India (GOI) has undertaken a number of measures; like (i) Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 19882, (ii) Business Responsibility Report3, and (iii) Corporate Social Responsibility (CSR) Rules, 2014 under the Companies Act, 20134.

Accounting Research and Audit Practices, Factors Influencing Environmental.