Research on the Influencing Factors of Environmental Information Disclosure in Thermal Power Enterprises *

Transcription

1 Economic Management Journal June 2016, Volume 5, Issue 1, PP Research on the Influencing Factors of Environmental Information Disclosure in Thermal Power Enterprises * Liping Yan School of Economy and Management, North China Electric Power University, Baoding, Hebei Province , P.R.China zfyfylzzkj@163.com Abstract Based on the data of 2014 annual report, this paper takes 46 thermal power listing corporations as the sample, uses multiple linear regression analysis to analyze the influencing factors of environmental information disclosure in the thermal power corporations in China. Study found that Chinese thermal power listed companies' environmental information disclosure level disparity, overall disclosure level is not high at the present stage. Company size, asset liability ratio, government compensation and social responsibility report preparation have a positive correlation with environmental information disclosure index and have a significant effect on it. Keywords: Thermal Power Enterprise; Environmental Information; Information Disclosure 1 INTRODUCTION The disclosure of environmental information refers to the company overt the impact that all kinds of activities on environment to the public. This is a manifestation of corporate social responsibility. After 1990s, with the enhancement of environmental protection awareness of the government and the public, companies have expanded their environmental information in the annual report, and even the prepared separate environmental reports. Western scholars have carried out a thorough study on the environmental information disclosure by using the standard analysis and empirical analysis. Chinese scholars researches are mainly based on the normative analysis, the empirical analysis is less and the strength is not enough. Therefore, this paper takes thermal power enterprises as the research sample, analyzes the factors that influence the environmental information disclosure, and puts forward the countermeasures and suggestions of improving the environmental information disclosure of listing Corporation. 2 VARIABLE SETTING AND RESEARCH HYPOTHESIS 2.1 Dependent Variable Setting This paper takes environmental information disclosure level index(edi) as independent variable, scores and sums 46 listed companies environmental information disclosure item by item in 2014 annual report using international popular aggregating method, and obtains sample companies' environmental information disclosure index, namely dependent variable Y. Specific items are shown in table Independent Variable Setting This paper chooses 11 variables as the independent variables of environmental information disclosure level, and puts forward the corresponding hypothesis combined with the characteristics of thermal power industry. Specific * Project supported by the Fundamental Research Funds for the Central Universities (13MS114) and Hebei province research project on people's livelihood ( )

2 variables description is shown in table 2. TABLE 1 ENVIRONMENTAL INFORMATION DISCLOSURE RATING SCALE Disclosure Items Optimal Value Scoring Criteria Environmental protection ideas, guidelines and objectives 2 Waste disposal measures 2 Qualitative Description Quantitative Description Settings of environmental protection department and system 2 Impact that national environmental protection policies, industry characteristics on the company ISO14000 environmental system certification 2 Implementation of environmental regulations 2 Energy saving effect 3 Pollutant reduction effect 3 Environmental protection investment (equipment, personnel, etc.) Environmental litigation fines, compensation and reward 3 Significant impact or public complaints to the surrounding environment Green fees, sewage charges, resource tax and other environmental costs Environmental Grants, subsidies and tax relief Detail description 2 Simple description 1 No description 0 Detail description 3 Simple description 2 Qualitative Simple description 1 No description 0 TABLE 2 INDEPENDENT VARIABLES DESCRIPTION Variable Symbol Description Company Size X 1 X 1 =LN(Total ending assets) Asset Liability Ratio X 2 X 2 =(Total liability/total assets) 100% Net Asset Profit Ratio X 3 X 3 =(Net profit /Total assets) 100% Outstanding Shares Proportion X 4 X 4 =(Outstanding shares/total shares) 100% Foreign Shares Proportion X 5 X 5 =(Foreign shares/total shares)) 100% Independent Director Ratio X 6 X 6 =Number of independent directors/ Number of directors Government environmental protection Grant and Award X 7 Regional Differences X 8 ISO14000 Environmental System Certification X 9 Social Responsibility Report X Research Hypothesis Listing Exchange X The value is 1 if obtained the environmental award in the period of annual report, otherwise it is 0. The value is 0 in the eastern region, the value is 1 in the middle region; and the value is 2 in the western region. The value is 1 gained the ISO14000 environment system certification in the period of annual report, otherwise it is 0. The value is 1 published the 2014 annual social responsibility report, otherwise it is 0. The value is 1 listed in Shanghai Stock Exchange, otherwise it is 0. H1: The greater the listing corporation, the higher the level of environmental information disclosure. Larger companies tend to attract a large number of investors, suppliers, customers, investment analysts, etc., it is bound to be required to disclose its information. In order to improve the company's image, the larger company has the power and the ability to disclose more environmental information. The author uses the natural logarithm of total

3 assets amount as an index to measure the level of environmental information disclosure. H 2: The higher the Asset Liability Ratio, the higher the level of environmental information disclosure. From the perspective of creditors, the higher the company's Asset Liability Ratio, the lower the safety factor of the loan. The creditor may require companies to disclose more information (including information on environmental factors, environmental system certification, compliance with environmental regulations, etc.) in order to ensure their own interests. From the perspective of company, it will be willing to disclose more environmental information to get the trust of creditors. H3: The higher the profitability, the higher the level of environmental information disclosure. The stronger the company's profitability, the more disclosure of information, that not only can get the trust of investors and stakeholders, but also convey the positive information of corporate social responsibility. The author chooses the Net Asset Profit Ratio as the indicator of the company's profitability. H4: The higher the Outstanding Shares Proportion, the higher the level of environmental information disclosure. The company with Large Outstanding Shares Proportion will be more willing to disclose more environmental information in order to obtain the trust and support of shareholders. H5: The greater the Foreign Shares Proportion, the higher the level of environmental information disclosure. Economic globalization has intensified the international competition of enterprises. Many enterprises need to enhance the international competitiveness, so they have to disclose more environmental information to attract foreign investment. H6: The greater the Independent Director Ratio, the higher the level of environmental information disclosure. Independent director is a director who is independent of the company's shareholders, not in the company, and has no significant business or professional contacts with the company or company's management. Independent director's background and academic degree make them more likely to represent the interests of investors, which are more conducive to the disclosure of environmental information. H7: The more the government environmental protection grants or award, the higher the level of environmental information disclosure. Only enterprises are more proactive to disclose environmental information, they can obtain government grants or award. The author assumes that the variable is a dummy variable, if the listing corporation got the government environmental grants or award in the period of annual report, the value of the variable is 1, otherwise is 0. H8: The more developed areas of the listing corporation, the higher the level of environmental information disclosure. Based on the registered address of the listing corporation, the author assumes that the variable is a dummy variable. If the listing corporation registered in the eastern region, the value is 0. If the listing corporation registered in the middle region, the value is 1. If the listing corporation registered in the western region, the value is 2. H9: Listing corporation passed the ISO14000 environmental management system certification, the level of environmental information disclosure is more higher. ISO14000 environmental management system is to regulate the enterprise and social organizations environmental behavior in order to achieve the purpose of saving resources, reducing environmental pollution, improving environmental quality, promoting economic sustainable and healthy development. The author assumes that the variable is a dummy variable, if the listing Corporation passed the ISO14000 environmental system certification in the period of annual report, the value of the variable is 1, otherwise the value is 0. H10: Listed corporation prepares social responsibility report, the level of environmental information disclosure is more higher

4 The preparation of social responsibility report is an important means to enhance the corporate image. The variable is a dummy variable, if the listing corporation released the 2014 annual social responsibility report, the value is 1, otherwise it is 0. H 11: The company listed in the Shanghai stock exchange, the level of environmental disclosure is more higher. Shanghai stock exchange s system is more perfect, the listing corporation will have more constraints, including the system of environmental information disclosure. The variable is a dummy variable, if the corporation listed in the Shanghai stock exchange, the value is 1, otherwise it is 0. 3 SAMPLE SELECTION AND MODEL CONSTRUCTION 3.1 Sample Selection The disclosure of environmental information in heavy pollution industry listing corporation can be analyzed, which can represent the overall level of environmental information disclosure in China's listing corporation. This paper selects 46 thermal power listing corporations as research sample, including 24 corporations in the Shanghai Stock Exchange, 22 corporations in Shenzhen Stock Exchange. The sample is shown in Table 3. Serial Number Stock Code Corporate Name TABLE 3 RESEARCH SAMPLES Serial Number Stock Code Corporate Name HNP WSDL SEP BAOLIHUA NEW ENERGY ZZEPC TJBE HDPI CYDL GDG DONGFANG ENERGY MXEP GEPIC GDEP JCGNCL JINSHAN ENERGY HEGC FULING POWER HUNAN DEVELOPMENT XCEP HUITIAN THERMAL POWER TIANFU ENERGY JPSC BJP JOINTO ENERGY SCTE MDEP DTPC SHAONENG GROUP HDECL NANSHAN POWER DHEP SHENZHEN ENERGY HYNY WENERGY TEC XN&TS GDPD YNHC NMHD GED SDIC POWER ZHANGZE POWER CHENDIAN INTERNATIONAL HENGYUN NBTP QYDL Note: The sample data comes from

5 3.2 Construction of Multiple Regression Model This paper studies on the significant factors that impact behavior of environmental information disclosure by using the method of multiple linear regression analysis and SPSS software to carry out regression analysis. Multiple regression model is established as follows: Y=β 0 + β 1 X 1 + β 2 X 2 + β 3 X 3 + β 4 X 4 + β 5 X 5 + β 6 X 6 + β 7 X 7 + β 8 X 8 + β 9 X 9 + β 10 X 10 + β 11 X 11 +ε β0 is a constant which is independent of all the factors. β1~β11 are regression coefficients, which means the change amount of dependent variable when the independent variables change in each unit. ε is a random disturbance. 4 EMPIRICAL ANALYSIS 4.1 Descriptive Statistical Analysis 1) Descriptive Statistical Analysis of Continuous Independent Variables TABLE 4 DESCRIPTIVE STATISTICAL ANALYSIS OF CONTINUOUS INDEPENDENT VARIABLES Variable Maximum Value Minimum Value Mean Standard Deviation Company Size Asset Liability Ratio Net Asset Profit Ratio Outstanding Shares Proportion Foreign Shares Proportion Independent Director Proportion According to the results shown in Table 4, the maximum value of Net Asset Profit Ratio is , the minimum value is , the mean is , the standard deviation is This shows that there is big difference in the profitability. The mean of outstanding shares proportion is only , which indicates that there are still a part of non-outstanding shares in the listing corporation. Non-outstanding shares cannot make equity share, therefore, the governance structure of the listing corporation needs to be further improved in China. The maximum value of foreign shares proportion is , the minimum value is 0, the mean is This shows that the proportion of foreign investment is low in China's thermal power listed companies. The mean of proportion of independent directors is , which means that the proportion of the independent directors meets the requirements of China Securities Regulatory Commission(CSRC). However, the minimum value is , which indicates that the system of the independent director of some enterprises needs to be further improved. 2) Descriptive Statistical Analysis of Dummy Independent Variables TABLE 5 DESCRIPTIVE STATISTICAL ANALYSIS OF DUMMY INDEPENDENT VARIABLES Variable Maximum Value Minimum Value Mean Standard Deviation Government environmental protection Grant and Award Regional Differences ISO14000 Certification Social Responsibility Report Listing Exchange

6 The mean of government environmental protection grant and award is 0.83, which means 83% of enterprises have obtained the government's grand and award. It reflects the Chinese government attaches great importance to environmental protection of the thermal power industry. The mean of ISO14000 certification is 0.02, which shows that only 2% of enterprises have achieved ISO14000 series certification. It means that it is almost blank in ISO14000 series certification in the thermal power industry in China, and far from the international advanced level. The mean of the social responsibility report is 0.46, which shows that 46% of the enterprises have prepared a separate social responsibility report, there are still more than 50% of the enterprises that do not compile. This shows that thermal power enterprises management has relatively poor initiative to disclose the environmental information and doesn t not pay full attention to the social responsibility report. 3) Descriptive Statistical Analysis of Dependent Variable TABLE 6 DESCRIPTIVE STATISTICAL ANALYSIS OF DEPENDENT VARIABLE Variable Maximum Value Minimum Value Mean Standard Deviation EDI TABLE 7 EDI DISTRIBUTION STATISTICS Distribution Interval EDI EDI <30 0 EDI <15 Statistics % From table 1, we can see that the optimal value of EDI is 33. According to table 6, the maximum value of EDI is 31, the minimum value is 1, the mean value is According to table 7, that 25 enterprises value are below the mean value, accounting for 54.35% of the total samples. This data shows that the whole level of environmental information disclosure of the thermal power is not high, and there is obvious difference among thermal power enterprises. 4.2 Significance Test on Model According to table 10, R=0.756, which shows that there is a relatively good correlation between independent variables and dependent variables. The adjusted R2 can better reflect the model's Goodness of Fit, and the adjusted R2=0.531 in the model shows that the independent variables have a large effect on the dependent variable, that is to say, 53.1% of the variation of dependent variable is caused by the independent variables. It also shows that there are other independent variables that have not been considered. In the analysis of variance, F-measure is , which passes the hypothesis test of the significance level is Furthermore, the SIG value is 0, which rejects the hypothesis that the regression coefficient is zero. Hence the regression equation is meaningful. 4.3 Correlation Analysis In order to eliminate the influence of the correlation between the independent variables on the regression results, it is necessary to test the correlation between the independent variables before regression analysis. The Pearson correlation coefficient between the variables is shown in table 8. As shown in Table 8, it is significantly positively related between EDI and company size, Asset Liability Ratio, social responsibility report in the level of 1%, and the government environmental protection grants in the level of 0.5%, which provides a basis for multiple regression analysis. However, the correlation between the other independent variables and EDI is not significant. Meanwhile, there is a significant correlation between some independent variables, such as Asset Liability Ratio and Net Asset Profit Ratio, government environmental protection grants and independent director proportion or regional differences, social responsibility report and the listed exchange. So we can not rule out the possibility of multiple collinear

7 TABLE 8 CORRELATION MATRIX X 1 X 2 X 3 X 4 X 5 X 6 X 7 X 8 X 9 X 10 X 11 Y X ** X ** ** X ** X X X * X * * * X * X X **.423** X ** Y.463**.444** * ** In general, the criterion for the multiple collinear is that when the independent variable is regressed, the correlation coefficient between the independent variables is greater than (including) 0.5. As shown in Table 8, the correlation coefficients of the independent variables in this paper are less than 0.5, the maximum coefficient is Therefore, it can be preliminarily judged that the possibility of multiple linear is small. However, in order to ensure that the results of multiple regressions have significant economic significance, this paper further examines whether there is a multiple collinear between the variables. 4.4 Multiple Collinear Test TABLE 9 MULTIPLE COLLINEAR DIAGNOSIS RESULTS Variable Tolerance VIF X X X X It is usually considered that it has serious multiple collinear between the independent variables and the others when Tolerance of an independent variable is less than 0.1, or VIF is over 10. When VIF approaches to 1, and Tolerance is more than 0.5, it can be considered the effect of the multiple collinear among the variables is very small. As shown in Table 9, VIF of the model is greater than 0 and less than 10, the maximum is Tolerance is more than 0.5, and the lowest tolerance level is In addition, the Std. Error is relatively small. Lower VIF, Std. Error and higher Tolerance indicate that the sample number is consistent with the basic hypothesis and requirement of multiple regression. So there is no multiple linear problem between the independent variables. The data can be used for multiple linear regression analysis

8 4.5 Regression Results Analysis TABLE 10 REGRESSION RESULTS Model Unstandardized Coefficients Standardized Coefficients B Std. Error Beta t SIG. 4 (Constant) X X X X F= SIG=0.00 R=0.756 Adjusted R2=0.531 B represents the regression coefficient, T value is the result of t test of regression coefficient, SIG value represents the significance of t test in table 10. From the last column of table 10, the SIG value is less than 0.05, which indicates that the regression coefficient of each independent variable passes the significance test, the independent variables X 1, X 2, X 7, and X 10 can effectively predict the change of Y. Other variables affect the EDI, but they do not pass the significance test, which indicates that these factors have no significant effect on the EDI, can not effectively explain the change of Y. Therefore, the final regression equation is: Y=1.285X X X X Namely: the company size increases per unit, the level of environmental information disclosure will increase units; asset liability rate increases per unit, the level of environmental information disclosure will be increased by 0.2 units; the enterprises environmental information disclosure level that obtain governmental environmental protection grand will be improved by units; the enterprises; environmental information disclosure level that release social responsibility report will be improved by units. 5 CONCLUSION This paper takes China's thermal power listing corporation as the research object, uses the regress analysis method to analyze the influence factors on environmental information disclosure. Through the research, the author draws up the following conclusions: The overall environmental information disclosure level is low. Research data shows that the average value of EDI of thermal power listing corporation in 2014 is 14.61, the highest value is 31, but the lowest value is only 1. The difference is relatively large, which shows that the level of environmental information disclosure of the thermal power listing corporation in China is different, the overall disclosure level is not high. Environmental information disclosure level is affected by company size, asset liability ratio, government compensation and social responsibility report obviously. According to the empirical research, it has a positive and significant correlation between company size, Asset Liability Ratio, government compensation and social responsibility report preparation and EDI. These factors, such as enterprise scale, the concern of creditors, the government's encouragement, the promotion of industry associations and other factors can promote the listing corporation to disclose environmental information. REFERENCES [1] Shixing Zhang. Corporate Environmental Information Disclosure Research Based on Environmental Performance Evaluation

9 PhD diss., Ocean University of China, [2] Yunling Tian. Peiwei Hong.Empirical Research on Environmental Information Disclosure in Listed Companies. Friends of Accounting 1(2010) : [3] Yan an Dong. Comparison and Revelation of Environmental Accounting Information Disclosure in the Developed Countries. Friends of Accounting 9(2011): [4] Qunli Qiang. An Empirical Study on the Influencing Factors of Corporate Environmental Information Disclosure. East China Economics Management Vol.29,5(2015): [5] Meijuan Liu,Yongqiang Li, Yifei Wu, Changjiang Zhang. Environmental Accounting Information Disclosure in Chinese forestry listed Companies. Issues in Agricultural Economy 1(2015): [6] Zhengyong Zhang. Research on the Determinants of CSR Report Information Quality in Chinese listed Companies. PhD diss., Southwestern University of Finance And Economics,2011. [7] Mei Yin. Study on the Influencing Factors of Corporate Environmental Information Disclosure in Chinese listed Companies. PhD diss., Xiangtan University, [8] Jianfeng Wu, Chengang Ye, Meng Liu. Environmental Performance, Political Connections and Environmental Information Disclosure. Journal of Shanxi University of Finance and Economics Vol.37,7(2015) : [9] Latridis G E. Environmental Disclosure Quality: Evidence on Environmental Performance, Corporate Govemance and Value Relevance. Emerging Markets Review 14 (2013): [10] Albertini E. A. Descriptive Analysis of Environmental Disclosure: A Longitudinal Study of French Companies. Journal of Business Ethics Vol.121,2(2014): AUTHORS Liping Yan was born in March 1980, obtained a master's degree in management from Agricultural University of Hebei in 2005.The author s major field of study is Accounting and Financial Management. She is now working in North China Electric Power University in China