Green Corporate Governance and Environmental Disclosure

Strong governance frameworks are essential for effective environmental reporting, especially green corporate governance, which integrates environmental factors into decision-making. By bringing operations into line with sustainability objectives, this strategy enhances stakeholder confidence, risk management, and transparency. Government programs in Malaysia encourage green governance by pushing businesses to use sustainable practices and improve environmental disclosure, which benefits both the environment and business. Agency theory supports the idea that a green corporate governance framework reduces agency costs by aligning shareholders' and managers' interests, fostering greater environmental transparency. Establishing environmental management systems and committees can improve disclosure and reduce conflicts of interest. Green governance research, still emerging, emphasizes its role as a strategy for sustainable resource management and its commitment to long-term ecological, economic, and social sustainability. Studies show that companies adopting green technologies, Environmental, Social, and Governance (ESG) policies, and environmental management systems are more likely to disclose environmental impacts. Furthermore, stakeholder engagement, director compensation linked to environmental performance, and financial factors like leverage and company size also influence environmental disclosure practices.