Green or unseen? A study of corporate environmental transparency in Serbia

Amid accelerating climate change and rising global pollution levels, the transition to green and circular business models has become an urgent necessity. Corporate environmental transparency is central to this shift, serving both as a tool of accountability and a response to increasing regulatory and societal demands. This study examines the quality and determinants of environmental disclosures in the Annual Business Reports of companies operating in Serbia's most polluting industries, within a broader context of ecological transition. Using a manually collected dataset and a disclosure scoring framework, we assess variations in the substance and length of environmental reporting across firm characteristics, including size, legal form, ownership structure, industry, and international presence. The findings indicate that larger firms and those audited by Big 4 companies exhibit somewhat better environmental reporting, though overall transparency remains modest. Neither ISO 14001 certification nor inclusion in the Pollutant Release and Transfer Register (PRTR) is associated with significantly higher disclosure quality. A positive association is observed between unqualified auditor opinions and disclosure scores, yet auditors rarely address environmental omissions, even when companies fail to meet minimum legal requirements. These results suggest that environmental disclosures often serve symbolic functions rather than reflect genuine accountability - seeming rather than being green. Enabled by weak enforcement and limited public pressure, companies' environmental impact frequently remains unseen in the shadows of opacity. The findings underscore the need for stronger regulatory mechanisms and credible assurance practices to support a meaningful transition to sustainable corporate behavior.