Study On The Correlation Of Environmental Information Disclosure Of Listed Companies And Debt

The global economy develops rapidly, meanwhile the environment is polluted and ecological environment is deteriorating. It has caused severe damage to the social environment which human relies on, and prevented the society from developing sustainably. As a very important component of social economy development, enterprise has not only created enormous wealth, but also brought serious environmental pollution. Environmental protection organizations and governance institutions are all proposing the Low-Carbon Economy as a model of the social economy to break restriction of resources for developing clean energy so that economy development and ecological environment can reach harmony and unity. Environment protection is in their duty bound because enterprises are the main makers of environment pollution. Environmental accounting try to reflect enterprises’ environmental behavior by affirming and measuring their business activities which related to the environment. It is convenient to assess environmental behavior for the enterprise, at the same time, and could be helpful for the external investors to make a decision. Enterprises’ environmental information disclosure has gradually become the main channel for stakeholders to assess their environmental activities. Meanwhile, enterprises have to raise money for developing which will bring the financing cost that could make effect on the economic benefits. According to the Pecking Order Theory, debt financing ranks only second to the internal financing for enterprise. Bank and other financial institutions is the main platform for enterprise to finance in China’s capital market. Whether environmental information disclosure’s level has correlations with the debt financing? If the high level of environment information disclosure would reduce the debt financing cost, it will encourage enterprise to enhance environment information disclosure’s level.In2007, the Chinese government released three green policies named "Green Credit","Green Insurance" and "Green Securities". Based on this background, this paper selects the sample of A-share listed companies in Shanghai with heavy pollution industry from2011to2012to analyze the correlation between the level of corporate environmental information disclosure and debt financing. The paper try to explain research background and significance at first, and then state the structure. After that, the author reads and summarizes literature which includes environmental information disclosure, debt financing and their correlations. We could find that the foreign theory and demonstration research is far ahead of ours because of the early start and paying much more attention to the environmental issues. Domestic scholars mainly carry on the existing theoretical models to make demonstration by the sample of China’s listed companies. In addition, as a branch of traditional accounting, environmental accounting gradually become the trend in recent years. The study of environmental information disclosure is far from mature and has mainly focused on the influencing factor. Other research about environmental information disclosure is very few. The research of environmental information disclosure and debt financing is almost blank.After reviewing the relevant literature, the paper analyses the theory of environmental information disclosure and debt financing respectively. The sustainable development theory mainly reveals the necessity of environmental information disclosure from a macro perspective and the stakeholder theory elaborates the importance to stakeholders. Social responsibility theory points out that environmental information disclosure is necessary to protect the environment when enterprises make profit from the business activities. Debt financing theory can be divided into two parts:one part reveals the motivation from the angle of administrator. It includes Agency Cost Theory, Signaling Theory and Incentive theory; the other part focused on the correlation between the information disclosure and corporate financing, including Liquidation Risk Theory and Interest Rate Risk Theory. On the basis of relevant theories, the author also analyses the current system and disclosure situation of environmental information. Considering the related policies, the author makes research on the item of environmental information disclosures by the samples, and then point out the strength and weakness.The author established the environmental information disclosure item and made marks by studying the environmental reports and annual reports refers to the GRI guidelines and the Chinese government’s relevant regulations system to get the environmental information disclosure index. Then this paper study the correlation between environmental information disclosure level and debt financing by choosing the costs of debt financing and bank debt rate as the explained variables. Combined with our country’s system background on the basis of literature review and theoretical analysis, the author made analysis about descriptive statistics, correlation coefficients of the variables and regression. The research results show that the environmental information disclosure level and debt financing have significant correlation.Finally, the author proposed suggestions to the government and enterprises according to the theoretical foundation and empirical assessment results. The government should continue to improve the construction of environmental information disclosure system and define disclosure content. Last but not least, strengthening regulation and penalty is very necessary. In order to obtain the lower cost of debt financing, enterprises should improve the level of environmental information disclosure.