Determinants of Climate Change Disclosure by Developed and Emerging Countries in Asia Pacific

ABSTRACT This research aims to examine some of the generic determinants of company attributes and corporate governance variables and whether there is any relationship to the reporting of climate change strategy. For that purpose, this study investigated firms in 10 industries, across 13 countries. This study is based on climate change disclosures made in the sustainability and annual reports by firms domiciled in developed and emerging countries in Asia Pacific. The study uses content analysis to construct weighted and unweighted disclosure indices. Based on the extant literature, several variables, namely, firm size, industrial membership, country of domicile, environment certification, board size, independent non‐executives, the CEO duality structure and gender were selected and their influence on the level of climate change disclosure was tested empirically. As for agency theory, this study offers both confirmatory and contradictory results regarding board independence. The results reveal that in spite of the fact that the level of climate change disclosure in some emerging countries in Asia Pacific is still low, by increasing the proportion of independent non‐executives on the board of directors, encouragement of firms' practice to separate the CEO‐board chair role, and firm practices in obtaining and maintaining environment certification would directly increase the climate change disclosure in their sustainability reports. Furthermore, firms that demonstrate a lack of gender diversity on the board would increase the climate change reporting system practices. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.