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Environmental practices of governance of companies in emerging markets: An analysis of structural relationships
Author(s) -
Rezende Amaury José,
Dalmácio Flávia Zóboli,
Souza Ribeiro Maisa
Publication year - 2019
Publication title -
environmental quality management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.249
H-Index - 27
eISSN - 1520-6483
pISSN - 1088-1913
DOI - 10.1002/tqem.21637
Subject(s) - corporate governance , business , proxy (statistics) , environmental governance , structural equation modeling , politics , accounting , industrial organization , environmental resource management , environmental economics , economics , finance , political science , statistics , mathematics , machine learning , computer science , law
The aim of this study is to analyze the structural relationships between strategy, environmental performance, and disclosure in view of the lack of research on these endogenous activities. To analyze these relationships, an environmental governance proxy consisting of five dimensions was developed for Brazilian companies. Hence, from an economic perspective, a trend is expected of companies disclosing more information and maintaining an environmental governance structure to avoid or reduce potential political costs. Using the structural equation technique, 573 Brazilian companies were analyzed. According to the results, the Brazilian companies’ mean compliance level with environmental governance practices is 49.2%. There is evidence of a positive association between the governance structure and the environmental management system (GSEM) as well as environmental performance (EP) and environmental disclosure levels (DISC). In addition, the level of environmental conflicts of interest a sector faces increased the need for environmental disclosure. Furthermore, the results demonstrate that the latent variables, GSEM and EP, exert direct and indirect positive effects on DISC. In other words, companies with more structured environmental management systems have obtained better performance indicators, and consequently, are more likely to feel encouraged to disseminate environmental information and to reduce political costs than is the case with other companies.