The Impact Of Environmental Supervision And Verification On The Listed Companies’ Environmental Responsibility

It is highlighted in the nineteenth report that the economy in China has shifted from a high speed growth stage to a high quality development stage.It is in the critical period of changing the way of development,optimizing the economic structure and changing the power of growth.The traditional economical development with high investment and high pollution is unsustainable.We must adhere to the concept of innovation,coordination,green,open and sharing,and take the road of sustainable development.The principles of economic sustainability,ecological sustainability and social sustainability require enterprises to undertake environmental responsibilities.In February 2008,the State Environmental Protection Department(SEPD)announced a regulation-"the guidance on the strengthening of environmental supervision and management work of listed companies".It consists of four,that are to further improve and strengthen environmental verification system of listed companies,to actively explore the establishment of environmental disclosure of the listed companies,to research and pilot environmental performance of experimental arears and to intensify the environmental supervision and inspection of governments.This paper first summarizes related theories of corporate environmental responsibility(CER),which are institutional theory and game theory,and analyzes the influence of governmental supervision and environmental inspection on corporate environmental responsibility.The institutional theory analyzes the problem form two aspects:coercion and motivation.On the one hand,environmental supervision and regulation compel enterprises to comply with environmental laws and regulations,discharge within the standards and reduce the consumption of resources.The game theory analyzes the mutual game among stakeholders,such as the enterprise and the government,the enterprise and consumers.Enterprises finally decide whether to fulfill the environmental responsibility according to the payment matrix of the game.The paper also designs the index of corporate environmental responsibility to quantitatively measure the current the list companies’ the level of the enterprise environmental performance in China.The index system consists of 3 first and 28 second level indicators:pollution reduction contribution,resource saving contribution,and other contributions which include environmental pollution investment and green credit etc..The index system measures the contribution on environmental protection made by the 642 listed companies that released environmental information in the past 2008-2014 years.It can help the public objectively evaluate the contribution of the list companies in terms of the protection the environment.In addition,in order to know the real role of 31 provinces in China in environmental supervision,the paper also designs the quantitative index to quantify the level of government supervision.In this paper,We research on the listed companies in China,and establish the non-equilibrium panel data to test the impact of environmental inspection system and government supervision on the CER with the Tobit model,fixed effect model(FE)and random effect model(RE).The study found that 1)environmental verification can promote the listed companies to perform environmental responsibility;(2)the influence of government supervision on the CER is affected by the executives’education level and the age of enterprises.Without these two factors,the government supervision can promote the enterprise to fulfill the environmental responsibility,and the effect is bigger with the higher level of government supervision;3)the scale of enterprise can promote the enterprise to fill the environmental responsibility;4)compared with cleaning industries,the polluted listed companies shoulder more environmental responsibility;5)the older enterprises take less environmental responsibility.However,we did not find that the executives’ education level and independent directors have a significant impact on environmental responsibility of listed companies.Finally,according to the empirical results,this paper gives corresponding suggestions.In order to truly implement environmental supervision work,the following should be done:strengthen the listed company’s status,implement the third party verification mechanism and accountability mechanism,strengthen the public participation mechanism,strengthen the level of the local environmental supervision and inspection,enhance the disclosure of the governmental environmental information s,increase the environmental pollution cost of the corporates.In addition,the enterprises themselves are someone who should fulfill the CER-Firstly,them should abide by those laws and regulations issued by government departments.Secondly,it is necessary to strengthen the environmental awareness of enterprises especially executives,making the CER become the motivator of enterprises.Last but not least,enterprises should increase the environmental investment and promote the sustainable development.