The Impact Mechanism Of Environmental Information Disclosure On Listed Companies’ Enterprise Value

With a continuously increase of the worldwide population and a constantly enhancement of economic scale, the global warming and air pollution have become much more overwhelmingly significant issue, which can be contributed to the rapid development of economy and the consumption of fossil fuel. Currently, it is necessary and primary to reduce the energy consumption and to encourage sustainable strategy for both the government and enterprises, it is not mandatory to disclose the environmental information in China. Furthermore, the awareness and willingness of enterprises to take responsibilities of the corresponding environment are still weak. Meanwhile, there are few theoretical studies focusing on the correlation between the environmental information disclosure and the enterprise’s value in Chinese academy.Firstly, this study was based on the motivation factors to demonstrate the correlation between environmental information disclosure and enterprise value. It was also proved that, according to the valuation model of a company, the enterprise value was affected by environmental information disclosure via cost of capital and expected cash flow respectively. Secondly, this study established an index of environmental information disclosure.79 A-share Chinese listed companies in energy industry were selected as samples to investigate the relationship of environmental information disclosure, cost of capital and expected cash flow. The conclusions indicated that the environmental information disclosure was negatively related to the capital cost in Chinese listed companies, while its relationship with the expected cash flow was positive. Meantime, the practice of environmental information disclosure of Chinese listed companies showed an increasing trend, although there is still a considerable amount of room of improvement. Environmental information disclosure levels of different energy industry were significantly different. Industry of petroleum and natural gas had a higher environmental information disclosure level than coal industry and power industry.At last, based on the conclusions of this study, some associated recommendations of environmental information disclosure were provided to the companies’managers, governmental and supervisory departments.