Determinants of Corporate Environmental Reporting: Evidence from Sri Lanka

The study aims to examine the level of Corporate Environmental Reporting (CER) in relation to corporate characteristics and to identify differences in CER across industry sectors on the Colombo Stock Exchange (CSE). Despite many previous studies on CER practices in developed countries, there is a knowledge gap in less developed countries with low CER status. The study uses descriptive analysis and the Random-Effect Model (REM) for data analysis and hypothesis testing, based on annual reports from 143 listed companies on the CSE from 2017 to 2021. The findings reveal that Sri Lanka has an average level of CER, with the highest level in the Consumer Goods Sector and the lowest in Possession Processing Services. Further, the study identifies that firm size, the use of global standards, and industry sector are determinants of CER, whereas multinational ownership, profitability, and leverage are not associated with CER. The paper has implications for practitioners and policymakers for improving sustainability reporting in developing countries by identifying characteristics that drive CER. This paper is one of the few attempts to use a significantly larger sample to analyse differences in CER in various sectors of CSE.