“The theoretical justifications for corporate environmental disclosure practices: from micro to macro perspective”, Nassr Saleh Mohamad Ahmad and Allam Ahmed
Purpose: This study aims at conducting an examination of a myriad of descriptive and theoretical perspectives (the theories related to agency, stakeholders, legitimacy and political economy) that have been employed while trying to interpret Corporate Environmental Disclosure (CED) practice and non-practice. It also aims at identifying the extent to which they have or do not have to offer an appropriate as well as a comprehensive basis that could be utilised for the explanation of CED in any country.
Methodology/Approach: This study combined a desk-based research method with extensive and critical analysis. It reviewed and discussed in detail the various descriptive and theoretical perspectives of CED. The available literature was used to support this analysis.
Findings: This article has identified that the interaction between internal and external factors related to the environment has a sufficient role in determining to what extent theories have (or have not) offered a comprehensive basis for an explanation of CED in a given country. The current theories do not see the world from a point that involves such an interaction between internal and external factors (Micro Perspective). This gives more support to the Environmental Determinism Theory (EDT) as an appropriate and comprehensive (Macro Perspective) basis for the explanation of CED by looking at the perspectives and competence of accountants and managers of organisations, corporate characteristics, and their contextual factors and not just analysing corporate reports.
Originality/Value: This article adds on to the already existing scarce body of literature dealing with the CED theories and also at identifying the major theoretical perspectives that can be utilized in the CED research. Such a macro perspective of EDT might result in enhancing our understanding of why firms disclose or do not disclose CED. Moreover, research conducted in future can employ this theoretical framework for the purpose of testing it empirically.
Keywords: Corporate Environmental Disclosure; Theories of Agency; Stakeholders; Legitimacy and Political Economy; Environmental Determinism Theory; Micro Perspective; Macro Perspective