Climate Change Reporting In Malaysia: Application Of Institutional Theory And Resource-Based View
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Date
2016-05
Authors
Ooi, Say Keat
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Abstract
This research examines the extent and determinants of voluntary corporate climate change reporting of the largest 100 companies by market capitalisation listed on Bursa Malaysia. This research applies a quantitative approach to accomplish the objectives. An integrated framework was developed based on institutional theory and resource-based view to explain the variability of climate change reporting among business organisations. The main idea of this theoretical framework is based on institutional pressures and organisational resources towards businesses concerning their corporate social responsibility strategically. Partial least squares regression was then applied to assess the relationship between explanatory factors and climate change reporting. The findings reveal an increasing trend of climate change reporting from during the Kyoto Protocol to post-Kyoto Protocol period, suggesting the positive impact of the Malaysian government’s efforts and initiatives on climate change reporting. Generally, there is more reporting of the qualitative information, especially the business strategies on climate change rather than the quantitative GHGs emission data. Besides, businesses have not been proactive in reporting their climate change related risks and opportunities. The findings also indicate that government ownership, foreign ownership, sustainable business network membership, corporate diversification, organisation international experience and CEO international experience influence climate change reporting positively. Meanwhile, no support for climate sensitive industry membership on climate change reporting, whereas
organisational slack had a significant inverse relationship with such corporate reporting. These imply that climate change is too costly to be ignored, regardless of industry, and businesses are looking forward to eco-efficiency operations, which secure economic prosperity while reducing environmental impact and resource intensity. Moreover, the presence of strategic CSR is crucial in this research. Strategic CSR significantly mediates the relationships between institutional pressures, organisational slack and climate change reporting. It suggests that business organisations internalise CSR strategically in response to institutional pressures and organisational slack, which subsequently lead to corporate climate change reporting. Therefore, this research advocates the need to internalise CSR strategically, in order to demonstrate business commitment towards climate change concern. Overall, this research contributes knowledge in corporate climate change reporting. It enriches the literature by empirically examining the reporting determinants, and introduce the role of strategic CSR as a mediator. To conclude, it is not only the strong influence of institutions, the internal resources also help in explaining the voluntary corporate climate change reporting practices in Malaysia.
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Climate change reporting of the largest 100 companies , by market capitalisation listed on Bursa Malaysia.