Environmental disclosure and financial performance: an analysis of carbonex indexed companies in India

With the increasing rate of global warming and climate change, firms' approach toward a better environment is a recent topic of research. The present study analyses firm's environmental disclosure by preparing an index of five dimensions followed by examining their causal relationship with firms' financial performance. The study adopts content analysis to measure the environmental performance reporting of firms listed in the Indian Bombay Stock Exchange (BSE) carbonex index. The study contributes to the existing environmental performance and financial performance literature in multi-fold. The results provide the extent to which the specified dimensions are disclosed in the reports and demonstrate that firms' environmental disclosure among identified dimensions is not balanced. The results also indicate a significant association between environmental and financial performance. The findings provide new insights to managers, policymakers, and regulators as a rationale for firms' comprehensive environmental disclosure reporting standards and go beyond the limits of sustainability reporting.