Environment, Development and Sustainability (2021) 23:12192–12216

https://doi.org/10.1007/s10668-020-01164-4

Trend and relationship between environmental accounting

disclosure and environmental performance for mining
companies listed in China

Andrew Osei Agyemang1   · Kong Yusheng1 · Angelina Kissiwaa Twum1 ·

Emmanuel Caesar Ayamba1 · Maxwell Kongkuah1 · Mohammed Musah1

Received: 6 July 2020 / Accepted: 15 December 2020 / Published online: 4 January 2021
© The Author(s), under exclusive licence to Springer Nature B.V. part of Springer Nature 2021

Abstract
We examined the effect of environmental disclosure on environmental performance for
listed mining companies in China. Our analysis used China’s Environmental Information
Disclosure Degree (EIDD) and the Chinese Securities Regulatory Commission’s disclo-
sure guidelines to propose the Environmental Information Disclosure Index.  Majority of
previous studies on environmental disclosures focused on a particular company or city or
province. Few studies considered a whole sector of a country. Among the few studies that
considered a whole industry, none of such studies considered the mining industry. In addi-
tion, our study employed a recent environmental disclosure index and modified a recent
index for environmental performance for the empirical analysis making our study unique.
We also employed vigorous reliability and robustness test to ensure that our findings are
valid and can be used by policy-makers. Using panel data for thirty-four mining companies
from both Shanghai and Shenzhen Stock Exchange for the period 2000–2018, our cointe-
gration estimation analysis concluded that corporate environmental performance and envi-
ronmental information disclosure has a positive and significant relationship at a 1% level.
Trend analysis revealed that mining companies comply with environmental information
disclosure in China. This was seen from the great improvement in the environmental dis-
closure for mining companies between 2008 and 2010 after the enforcement of EIDD. Our
results contribute to the previous literature and open the way for further studies on industry
level in other countries.

Keywords  China · Environmental disclosure · Environmental performance · Mining

1 Introduction

Since the implementation of economic reform and opening-up policy in China, China has
sacrificed nature while pursuing the economy’s fast-growth. Although the economy has
proliferated, the degree of damage to the ecological environment is also severe (Ebenstein

* Andrew Osei Agyemang

5102160202@stmail.ujs.edu.cn
Extended author information available on the last page of the article

1 Vol:.(1234567890)
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et  al. 2015). The economic activities of enterprises have created substantial economic
profits and social value. However, these achievements have also generated some degree of
harm to the natural environment.
Just like international agencies and countries, China attaches great importance to
resource conservation and building an environment-friendly society. The concept of green
development in China appeared for the first time in the 12th Five-Year Plan and was for-
mulated as the goal of China’s long-term sustainable development (Mol et al. 2011). As a
tool for enterprises to provide information to information users, accounting has the respon-
sibility of providing corporate environmental information. Using existing financial reports
to supplement corporate environmental information disclosure is currently the most com-
mon way of environmental accounting information disclosure (Lu and Li 2020; Pien 2020;
Tzouvanas et  al. 2020). It increases how supplementary information is disclosed in the
company’s annual report (Iatridis 2013), listing announcement (Tang et al. 2020), prospec-
tus (Pan et al. 2020), and information disclosure in interim reports (Goron 2018).
As China continues to lead the world with production (Wijsman et  al. 2019; Taplin
and Winterton 2019), production’s side effect remains a significant problem (Chen et  al.
2019; Sarkodie and Strezov 2019). In 2003, China issued the first environmental informa-
tion guidelines (Mol et al. 2011). Three years later, the central government issued a public
participation impact assessment on environmental disclosure (Hu and Karbhari 2015). In
May 2008, enterprises were required to proactively disclose their environmental informa-
tion (Zeng et al. 2010). Disclosure of environmental accounting information enables users
to understand the environmental impact of corporate behavior.
Traditional accounting ignores the scarcity of natural environmental resources (Mather
and Chapman 2018). But with the severe depletion of natural resources, environmental
problems are becoming more prominent (Fondevila et  al. 2019; Odoemelam and Okafor
2018), and traditional accounting can no longer meet the needs of information users. The
extreme waste of natural environmental resources and the consequences of pollution has
resulted in much attention to environmental protection (Acar and Temiz 2020; Odoemelam
and Okafor 2018). Mining companies are facing unprecedented pressure due to innovative
accounting methods of environmental cost (Jaskoski 2014; Martinico-Perez et  al. 2018).
As environmental problems continue to be a major concern of the globe (Lu and Li 2020;
Tang et al. 2020; Chen et al. 2019), enterprises are facing pressure from the outside world
in terms of minimizing production, which in turn will reduce pollution especially in heav-
ily polluting industries such as mining. Environmental issues severely restrict the develop-
ment of enterprises. Investors mostly pay attention to the company’s financial situation,
while little or less attention is paid on its corporate environmental performance (Deswanto
and Siregar 2018; Newig et al. 2018). This has led to the need for the mining companies
to strengthen environmental accounting so as to achieve coordinated development of eco-
nomic and environmental benefits.
X. Meng et al. (2014a) compared corporate environmental information disclosure con-
tent ratings with environmental performance ratings. Through comparative analysis, it
was found that changes in environmental performance would not affect the disclosure of
environmental information. Later, Hassan and Romilly (2018) used Canadian companies
as samples and found that companies’ public decisions are positively correlated with pollu-
tion tendency. That is, corporate environmental information disclosure is negatively corre-
lated with environmental performance. Tadros and Magnan (2019) found a significant and
positive relationship between environmental performance and quality environmental dis-
closure. The mixed findings from the relationship between environmental information dis-
closure and environmental performance have resulted in a literature gap in this study area.

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Taking into account the health impacts of environmental pollution, it is essential for
companies that, through their activities, pollute the environment to take some actions to
protect the environment. This study, therefore, seeks to (1) examine the compliance of
environmental accounting reporting for listed mining companies and (2) explore the rela-
tionship that exists between environmental accounting information disclosure and environ-
mental performance for mining companies listed in China.
The study adopted a quantitative research approach. Panel data extracted from a sec-
ondary source from the period 2000–2018 for listed mining companies of the two stock
exchanges in China mainland were used for the empirical studies. Using Stata version 15
statistical package, Common Correlated Effects Mean Group (CCEMG) and Augmented
Mean Group (AMG) estimators were used for the long-run relationship analysis. Our coin-
tegration estimation analysis concluded that corporate environmental performance and
environmental information disclosure has a positive and significant relationship at a 1%
level. Trend analysis revealed that mining companies comply with environmental informa-
tion disclosure in China.
Most of the previous studies on environmental accounting information disclosure
focused on a particular company or city or province (Murdifin et al. 2019; Leung and Snell
2019). Few of the studies were able to take a whole industry of a country into consideration
(Yao and Liang 2019; Tkachenko et al. 2019). Among the few studies, none of the studies
considered the mining industry. Therefore, this study tries to fill the literature gap by taking
the mining industry in China as the sample size. This makes the research unique and new.
Hence, the findings will add up to the existing literature and open way for other industry
studies. The study also used a recent content analysis index for environmental accounting
information disclosure (Agyemang et al. 2020). Our study also modified existing environ-
mental performance index (H. Li and Qi 2008). The modification of the model makes our
study unique and original.
The study is divided into five sections. The second section reviewed literature related to
environmental accounting disclosure and environmental performance. The methodology is
presented in the third section of the study. In Sect. 4, the findings and results are discussed
in detail. The fourth section also explained the discussion from the results. The final sec-
tion presented the conclusion and recommendation as well as limitations and future studies
for the study.

2 Literature review

2.1 Definition of concepts

2.1.1 Environmental accounting information

Environmental accounting, which is sometimes referred to as ‘green accounting’ (Cho and

Patten 2013; Marissa Matsler 2019) or ‘environmental management accounting (Qian et al.
2018; Asiri et  al. 2020) is an integral part of the accounting frontier since it combines
the traditional accounting reporting with ecological reporting (Lu and Li 2020; Tzouvanas
et  al. 2020). The high rate of pollution has resulted in more studies in this field (G. Li
et al. 2018; Kostka and Zhang 2018; Sun et al. 2019). Green accounting mainly uses cur-
rency or other non-monetary units to record information related to natural resources and
the environment (Cho and Patten 2013). According to Asiri et  al. (2020), environmental

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management accounting records the interaction between corporate activities and environ-
mental issues. In the study of Pearce et al. (2013b), environmental accounting’s main task
is to show the amount of environmental resource wealth, such as the storage of environ-
mental resources, the quantity, and market price. Therefore, environmental accounting
information is the provision of information related to both traditional and environmental
related issues to stakeholders of accounting information (Vogt et  al. 2017; Mather and
Chapman 2018; Deswanto and Siregar 2018).

2.1.2 Environmental performance

Hahn (2013) defines environmental performance as “the measurable results of an organiza-

tion’s management of its environmental aspects.” According to Pien (2020), the minimiz-
ing of environmental impact from economic activities measures the environmental perfor-
mance of a firm.

2.2 Determinants of environmental information disclosure

Factors that determine environmental information disclosure can be categorized into inter-
nal and external factors (Macagnan and Fontana 2013; Giannarakis et al. 2019; Welbeck
et  al. 2017). On external factors, the media (Odoemelam and Okafor 2018), government
(Welbeck et al. 2017), and consumer (X. Liu and Anbumozhi 2009) all contribute to the
disclosure of environmental accounting information. The government can impose laws and
fines on companies, thereby compelling companies to disclose the impact of their activi-
ties on the environment to information users. External factors, such as regulative pressure
(Qian et  al. 2018), competitive mechanism (Giannarakis et  al. 2019), and pressure from
non-government organizations (Welbeck et  al. 2017), influence companies’ disclosure of
environmental information. According to Malafronte et al. (2016), the effects of environ-
mental management’s organizational ability from an enterprise’s concrete characteristics
such as the institutional structure and learning capacity influenced the disclosure of envi-
ronmental reporting. X. Liu and Anbumozhi (2009) identified external factors such as the
media and government as the external determinants of environmental accounting informa-
tion. In the French context, Y. Wang et al. (2019) suggest that leverage and profitability are
determinants of a firm’s environmental disclosure.
In terms of internal factors, the company’s size is seen to have an effect on the dis-
closure of environmental information (Passetti et al. 2018; Brooks and Oikonomou 2018).
Equally, the debt to equity ratio (Kılıç and Kuzey 2018) and the profitability of the com-
pany (Brooks and Oikonomou 2018) influence the company in disclosing environmental
accounting information to the stakeholders. Board characteristics cannot be underscored
when it comes to internal factors that influence environmental accounting information dis-
closure (Osazuwa et al. 2016; Passetti et al. 2018). Board characteristics that are identified
as determinants of environmental information disclosure in the mining companies are the
size of the board (Vogt et  al. 2017; Osazuwa et  al. 2016; García‐Sánchez and Martínez‐
Ferrero 2018), the proportion of independent directors (García‐Sánchez and Martínez‐Fer-
rero 2018; Cucari et al. 2018), establishment of professional committees (Osazuwa et al.
2016), the female representation of the board (Elmagrhi et al. 2019) CEO duality (Cucari
et al. 2018), and age range of board members (Fernandes et al. 2019).

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2.3 Theoretical literature

2.3.1 Environmental economic theory

Environmental economic theory emphasizes the economy as a subsystem of the ecosys-

tem with its focus upon preserving natural capital (Mol and Sonnenfeld 2014). Environ-
mental economics is an interdisciplinary study of economics and environmental science
(Turner et al. 2000). As the industrialization process continues to accelerate, the envi-
ronment is threatened and destroyed as never before. This has led to an increase aware-
ness of environmental protection. The idea of environmental economics theory helps
companies to find a balance between corporate development and environmental pro-
tection. That is, to minimize the environmental impact of economic activities and also
ensure sustainable development (Fondevila et al. 2019; Taplin and Winterton 2019).

2.3.2 Theory of sustainable development

Sustainable development means meeting the present’s needs without prejudice to the
ability of future generations to meet their own needs (Giangrande et al. 2019). That is,
the protection of natural resources and the development of environmental sustainability
(Ghai and Vivian 2014). This idea can be traced back to the Silent Spring, published
in 1962 (Sikdar 2003). Sustainable development is a scientific and economic growth
model that requires development to be closely related to the environment (Giangrande
et  al. 2019; Elmagrhi et  al. 2019). To ensure the synchronization of environmental
development and economic development, China has put forward a sustainable develop-
ment strategy, emphasizing that it can be adopted in the environment to create material
wealth within the scope of the acceptance (Pearce et al. 2013a).

2.4 Environmental accounting disclosure and compliance

Based on the theory of environmental economics, which states that, as economic activi-
ties continue, the environment is affected in one way or another. Hence, companies must
put adequate measures in protecting the environment from destruction so that future
generations can also benefit from natural resources, as indicated by the theory of sus-
tainable development. Qian and Chen (2020) believes that the overall assessment of
environmental accounting information disclosure refers to the degree of the information
disclosed, satisfying all stakeholders’ demand.
Environmental compliance measures how companies conform to environmental laws
(McGuire 2014), regulations (Zeng et  al. 2010), standards (Goron 2018), and other
requirements such as site permits to operate. Due to the recent environmental concerns,
there has been a need to measure companies’ activities to verify if companies com-
ply with environmental regulations. Prior studies on environmental compliance have a
mixed conclusion. In the study of Sun et  al. (2019), the study realized that less than
half of the sample companies complied with environmental reporting. On the contrary,
Odoemelam and Okafor (2018) concluded that more than seventy percent (70%) of the
sample companies complied with the environmental disclosures. The above literature
eventually leads to the first hypothesis, which states that:

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H1  Listed mining companies comply with environmental accounting information.

2.4.1 Environmental performance and environmental disclosures

Researchers began to pay attention to the relationship between environmental performance

and environmental accounting information disclosure in the past two decades (Tang et  al.
2020; Y. Wang et al. 2019; Welbeck et al. 2017). The conclusions of the relationship between
the two are not conclusive. Some researchers found an inverse or insignificant relationship
between environmental performance and environmental accounting information (Clarkson
et al. 2008; Belhaj and Damak-Ayadi 2011; Al-Tuwaijri et al. 2004; Acar and Temiz 2020).
Mathuva and Kiweu (2016) compared content analysis ratings of environmental disclosures
that appeared in corporate annual reports to environmental performance ratings. The study did
not find a significant association between environmental disclosure and environmental perfor-
mance. Using a GMM method to evaluate environmental disclosures in annual reports, Seles
et al. (2019) found an insignificant relationship between environmental disclosure and Indian
listed companies’ environmental performance.
X. H. Meng et al. (2014a) based on China’s 97 heavily polluting listed companies’ empiri-
cal analysis of short-panel data from 2011 to 2015 and found that environmental performance
is positively correlated with environmental information disclosure. Z. Liu (2020) found that
energy efficiency and technology innovation resulted in a significant increase in environmen-
tal performance levels and improved environmental disclosure index level. Using voluntary
disclosure theory, Tadros and Magnan (2019) empirical study found a positive and statisti-
cally significant relationship between environmental accounting information disclosure and
environmental performance for oil and gas companies in the USA. Zhang and Xie (2020)
through the establishment of an environmental information disclosure index evaluation sys-
tem, employed a comprehensive analysis of the relationship between environmental infor-
mation disclosure and environmental performance of listed companies in the light-polluting
industry using GMM estimation technique. The authors found that the quality of industrial
environmental performance and environmental information changes are in the same direction,
that is, the better the environmental performance, the higher the quality of environmental dis-
closure. Esty and Karpilow (2019) compiled the Federal Government Toxic Substances Inven-
tory (TRI) using environmental information disclosure indicators to test the effectiveness of
information disclosure in realizing the actual improvement of corporate environmental perfor-
mance effectiveness. The authors of the study found that over time, environmental informa-
tion disclosure has a positive and statistically significant impact on the environmental per-
formance. Basing on the above positive relationship between environmental information and
disclosure, this study also assumes that:

H2  There exists a positive correlation between environmental performance and environ-
mental accounting information disclosure for Chinese listed mining companies.

3 Methodology

3.1 Research design

The study used secondary data extracted from annual reports, financial statements,
and environmental reports from the Environmental Protection Agency of the sample

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companies. The research covered 19 financial years from January 1, 2000, to December 31,
2018. This period was selected because of the availability of data. Due to the global pan-
demic of new coronavirus, data for the year 2019 were not released on time. Hence, 2019
was excluded from the study. Critical consideration was also used in selecting the vari-
ables. Most researchers in economics and accounting use Stata statistical tool for empirical
analysis (Longest 2019; Fondevila et al. 2019; Deswanto and Siregar 2018). Our study also
utilized Stata version 15 for the empirical analysis since this kind of statistical software
performs a series of statistical analysis on the sample data, and explores the statistical val-
ues and related relations of the variables in the model (Longest 2019).

3.2 Population and sampling

In considering the study population, the authors considered the country that leads the
world in terms of carbon emissions for the year 2019. China was then selected since it con-
tributed to 30% of carbon emissions for 2019 (Chen et al. 2019), thereby toping the world
in terms of carbon emissions (Tadros and Magnan 2019). This was due to the enormous
export market as a result of high manufacturing companies situated in China (Lu and Li
2020; Taplin and Winterton 2019). Since pollution is a side effect of manufacturing, coun-
tries leading in manufacturing contribute significantly to pollution (Moutinho et al. 2020;
Haibo et al. 2019; Ayamba et al. 2020).
In order to select the sample size, the authors explored the various sectors and indus-
tries to ascertain the level of direct air pollution. In effect, the mining industry was the
number one major contributor of direct air pollution. Hence, the mining industry in China
was selected for the study. The mining industry is defined as including exploration for, and
extraction and primary processing of, minerals, including processing up to the first pour-
ing of the refined metals (Fan et al. 2017). In China, the mining industry is divided into
five main subsectors, namely mining of coal, petroleum and natural gas extraction, ferrous
metal mining, nonferrous metal mining and non-metal ores mining.
In order to get reliable data, the study considered only listed mining companies. As at
December 31, 2019, there were 45 and 21 listed mining companies on the Shanghai Stock
Exchange and Shenzhen Stock Exchange respectively. However, due to missing data for
some companies for some years, the final sample had 22 and 12 mining companies from
the Shanghai and Shenzhen stock exchanges.

3.3 Model specification

In testing the relationship between environmental performance and environmental account-

ing information disclosure, the study adopts and modify (Patten 2002) econometric model,
which is given in (Eq. 1)
EADIit = 𝛽0 + 𝛽1 EPIit + 𝛽2 SIZEit + 𝛽3 LEVit + 𝛽4 ROEit + 𝜀 (1)
where EADI represents Environmental Accounting Disclosure Index, EPI represents Envi-
ronmental Performance Index, SIZE denotes size of the company measured by total assets,
LEV representing the degree of debt measured by total liabilities, and ROE, which denotes
return on equity of the mining companies. In the model, β0 represents the constant, ε
denotes the error term, i is the sample company, and t is the year.

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3.4 Variables

3.4.1 Environmental accounting disclosure index (EADI)

In the empirical research on information disclosure, content analysis is the most widely
used and most important analytical method (Manes-Rossi et  al. 2018; Osei et  al. 2019;
Tang et al. 2018; Leopizzi et al. 2020). Our study also used the content analysis method
to evaluate the level of corporate environmental accounting information disclosure. In
estimating EADI, our study adopted an index proposed by Agyemang et al. (2020) where
scores are recorded and summed. This index was used because it is the most recent devel-
oped index for measuring environmental information disclosure in China’s mining indus-
try. Considering the unique nature of the environmental information disclosure degree,
the EADI proposed by (Agyemang et  al. 2020) measurement are based on the rules and
regulations of the accounting standards and disclosure guidelines formulated by the China
Securities Regulatory Commission, the environmental information disclosure measures,
environmental information disclosure degree, and the characteristics of China’s mining
industry. The environmental disclosure index proposed by (Agyemang et al. 2020) is cat-
egorized into two themes, namely environmental financial information and environmen-
tal non-financial information. According to the adopted index, three points was scored for
detailed description or disclosure. One point was scored for fairly disclosure, while for no
disclosure, 0 point was scored. EADI is obtained by dividing the score of the sample com-
pany by the total score of 54. The calculation formula is given as:
EADIi = ΣEADIi∕ΣMEADIi

, where ∑EADIi and ∑MEADIi represent environmental accounting information of the

sample company and the highest score of all disclosures, respectively.

3.4.2 Environmental performance index

Environmental performance is a construct that has received significant attention from

researchers in the past three decades (Hsu and Zomer 2014; Ağan et al. 2016; Singh et al.
2020; Index 2018). However, its complexity and multidimensional character have pre-
vented researchers and regulators from reaching a consensus on how to measure this vari-
able. In measuring corporate environmental performance, some research used the database
of Toxic Release Inventory (TRI) (Esty and Karpilow 2019; Index 2018), and the database
of the Council on Economic Priorities (CEP) (Haibo et al. 2019; Newig et al. 2018). These
two databases provided data for developed countries only. The unavailability of data still
restrains studies on Chinese corporate environmental performance. L. Wang et al. (2018)
established a framework to comprehensively evaluate Chinese firms’ corporate environ-
mental performance, based on the following criteria:

1. The firm was not involved in “The Report on Punishment for Environmental Pollution.”
2. The firm adopted ISO 14,001 or other relevant environmental management systems.
3. The firm was awarded the honor of “National Environmentally Friendly Enterprise” by
the Municipal Environmental Protection (MEP) at provincial levels.
4. The firm was awarded the honor of “National Environmentally Friendly Enterprise” by
the Municipal Environmental Protection (MEP) at national levels.

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This study modified the way previous studies evaluated the environmental performance
index and proposed a new way of measuring corporate environmental performance index
for Chinese companies. The research estimates corporate environmental performance as
Yes and No.
Scores were then assigned to the four (4) items and aggregated as a ratio to the total
score—three (3) points for the Yes indicator and Zero (0) point for No indicator. Corporate
environmental performance is then obtained by dividing the sample company’s score by
a total score of 12. The higher the score, the higher the environmental performance of the
company. The calculation formula is given as
EPIi = ΣEPIi∕ΣTEPIi,

where ∑EPIi and ∑TEPIi represent the environmental performance and the highest score
of environmental performance, respectively.

3.4.3 Control variables

3.4.3.1  Company size  Company size has featured as an essential variable or determinant of
disclosure levels (Iatridis 2013). In general, there are three leading indicators for measuring
the size of a company: market value (D’Amico et al. 2016), operating income (Giannarakis
et al. 2019), and total assets (Welbeck et al. 2017). The market value is greatly affected by
market fluctuations and has more significant uncertainty (X. Liu and Anbumozhi 2009).
Operating income is affected by external influences (Z. Liu 2020). Hence, total assets are
mostly used to measure the size of the company (Giannarakis et al. 2019; Welbeck et al.
2017; Fonseka et al. 2019). Therefore, this study uses the logarithm of total assets at the end
of the year to measure the size of the company.

3.4.3.2  Leverage D’Amico et  al. (2016) believe that the company’s voluntary informa-
tion is positively related to leverage. Fonseka et al. (2019) also found that environmental
information disclosure is positively affected by the level of corporate debt. Macagnan and
Fontana (2013) conducted an empirical study of relevant data from large UK companies
and found enterprises with low debt levels have high environmental information disclosure.
Total debt is used to measure the leverage of the company.

3.4.3.3  Profitability  The Return on Equity (ROE) measures the company’s net income in
contrast to each unit of shareholder equity (Tripathi et al. 2018). By comparing the com-
pany’s net income to its overall wealth, the ROE indicates whether the net income is appro-
priate for its size.

3.5 Data processing and presentation

The data were divided into three panels for the analysis. Panel A was made up of only
state-owned mining companies listed on both the Shanghai and Shenzhen Stock Exchange.
Panel B comprised only privately owned mining companies listed in China, and Panel C
was a combination of both state-owned and private companies in China. The data were
made up of twenty-two state-owned companies and twelve private mining companies.
We first performed descriptive statistics to determine the nature of the data set. The
Pearson correlation matrix was then performed to know how the pair of variables are

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related. To enable the authors to select appropriate estimation techniques, we then carried a
cross-sectional dependency test and unit root test. The findings from these tests influenced
our selection of CCEMG and AMG cointegration estimators for the regression analysis.
To determine the causalities among the study variables, the pairwise Granger causality
was performed. Finally, trend analysis was carried out to help in ascertaining the trend of
compliance of environmental accounting information disclosure and environmental perfor-
mance for listed mining companies in China.

4 Findings and analysis

4.1 Descriptive statistics and correlation analysis

Table 1 shows that the average EADI score is 0.6024, 0.5894, and 0.5993 for state-owned
companies, privately owned companies, and a combination of state-owned and private-
owned companies, respectively, with a minimum score of 0.3200, 0.3900, and 0.3200 for
Panel A, B, and C, respectively. The findings revealed that the EADI is above average for
all three panels, indicating that most mining companies disclose adequate environmental
information to their stakeholders.
In terms of the independent variable, the standard deviation and mean of EPI for Panel
C are 0.1063 and 0.5904, respectively, indicating that environmental performance is also
above average and that majority of the sample companies have high (above average) envi-
ronmental performance. Similarly, taking state-owned and private companies individually,
the EPI is still above average. However, the average EPI for state-owned was slightly higher
than that of the private companies.
The VIF analysis findings revealed relatively small values for all three panels indicat-
ing that multicollinearity does not exist among the study variables. The Pearson correla-
tion analysis findings further affirm that multicollinearity does not exist since all the coef-
ficients from the correlation matrix were below 0.8.
The dependent and explanatory variables in the three panels recorded a negative skewed
value. However, the values were not more than  − 0.5. This indicated that they are relatively
symmetrical. All three panels recorded a kurtosis value of less than 3 for the dependent
and the explanatory variables, indicating fewer and less extreme outliers than the normal
distribution.
From the Pearson correlation analysis results in Table 2, there was a mixture of medium
and weak correlations among the study variables. All the variables except ROE recorded a
medium correlation with the predicted variable for the three panels. The findings show that
the environmental performance index (EPI), the company size (SIZE), and debt ratio meas-
ured by leverage are statistically significantly positively correlated with the listed mining
company’s environmental information disclosure level (EADI) at the level of 1% for all the
three panels, while ROE was found to be negatively correlated with EADI for all the three
panels.

4.2 Cross‑sectional dependency analysis

The cross-sectional dependence test in  Table  3  shows that all the variables for Panel A
(state-owned companies) and Panel C (state-owned and private companies combined)
recorded a 1% significant level. Similarly, all variables in Panel B (private companies)

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Table 1  Descriptive statistics
Variables Obs Mean Median SD Variance Min Max Skewness Kurtosis VIF

Panel A EADI 494 0.6024 0.6680 0.136 0.0185 0.32 0.82  − 0.2854 1.4519
EPI 494 0.5908 0.6472 0.107 0.0114 0.425 0.76  − 0.1911 1.5655 1.54
SIZE 494 1.30E + 10 5.00E + 09 2.34E + 10 5.46E + 20 5.30E + 07 2.00E + 11 4.1061 25.5725 1.61
LEV 494 7.51E + 09 1.92E + 09 1.57E + 10 2.47E + 20 1.90E + 07 1.20E + 11 3.9745 21.1232 1.58
ROE 494 13 9.2900 12.7936 163.6759 0.01 97.43 2.2971 11.5177 1.03
Panel B EADI 152 0.5894 0.6590 0.1331 0.0177 0.39 0.76  − 0.2771 1.3877
EPI 152 0.589 0.6422 0.1044 0.0109 0.425 0.74  − 0.1777 1.5730 1.75
SIZE 152 9.75E + 09 2.93E + 09 1.90E + 10 3.59E + 20 5.90E + 07 1.10E + 11 3.4935 15.8897 1.83
LEV 152 6.17E + 09 1.25E + 09 1.33E + 10 1.78E + 20 5.00E + 07 7.80E + 10 3.6588 17.3863 1.77
ROE 152 9.7453 6.0000 10.9626 120.1778 0.27 75.39 2.8606 14.3514 1
Panel C EADI 646 0.5993 0.6680 0.1353 0.0183 0.32 0.82  − 0.2805 1.4415
EPI 646 0.5904 0.6472 0.1063 0.0113 0.425 0.76  − 0.1877 1.5678 1.58
SIZE 646 1.22E + 10 4.05E + 09 2.24E + 10 5.03E + 20 5.30E + 07 2.00E + 11 4.0659 25.3160 1.75
LEV 646 7.19E + 09 1.71E + 09 1.52E + 10 2.31E + 20 1.90E + 07 1.20E + 11 3.9562 20.9958 1.61
ROE 646 12.2342 8.6500 12.4558 155.1479 0.01 97.43 2.3958 11.9650 1.02
A. O. Agyemang et al.
Trend and relationship between environmental accounting… 12203

Table 2  Pearson correlation analysis

Variables EADI EPI SIZE LEV ROE

Panel A EADI 1.0000

EPI 0.5533*** 1.0000
SIZE 0.5893*** 0.5791*** 1.0000
LEV 0.5558*** 0.5475*** 0.5556*** 1.0000
ROE  − 0.109**  − 0.1431***  − 0.0206 0.0038 1.0000
Panel B EADI 1.0000
EPI 0.6580*** 1.0000
SIZE 0.6359*** 0.6537*** 1.0000
LEV 0.6003*** 0.6185*** 0.6354*** 1.0000
ROE  − 0.0569**  − 0.0583  − 0.0208  − 0.0144 1.0000
Panel C EADI 1.0000
EPI 0.6538*** 1.0000
SIZE 0.6004*** 0.5932*** 1.0000
LEV 0.5664*** 0.5624*** 0.6497*** 1.0000
ROE  − 0.0934**  − 0.1241***  − 0.0097 0.0054 1.0000
***
 1% significant level, **5% significant level, *10% significant level

Table 3  Cross-sectional dependency test

Variables Breusch–Pagan LM Pesaran scaled LM Bias-corrected Pesaran CD
scaled LM

Panel A EADI 6043.10*** 224.28*** 223.56*** 77.74***

EPI 6121.93*** 227.37*** 226.65*** 78.24***
SIZE 3657.91*** 130.73*** 130.01*** 56.90***
LEV 2936.50*** 102.43*** 101.71*** 39.02***
ROE 684.90*** 14.12*** 13.39*** 8.02***
Panel B EADI 527.76*** 66.78*** 66.56*** 22.97***
EPI 528.65*** 66.90*** 66.68*** 22.99***
SIZE 320.09*** 39.03*** 38.81*** 17.64***
LEV 235.47*** 27.72*** 27.50*** 14.73***
ROE 48.84*** 2.78 2.56* 1.24
Panel C EADI 10,466.00*** 295.70*** 294.76*** 102.30***
EPI 10,573.55*** 298.92*** 297.97*** 102.83***
SIZE 6377.46*** 173.64*** 172.70*** 75.96***
LEV 5058.83*** 134.28*** 133.33*** 55.15***
ROE 1016.75*** 13.61*** 12.66*** 7.88***

***,**,*denote 1%, 5% and 10% significant level respectively

except for ROE also recorded a 1% significant level. In Panel B, ROE recorded insignifi-
cant cross-section dependence for both Pesaran scaled LM and Pesaran CD test. Since most
of the variables recorded significant relationships among the study variables, we conclude
the existence of cross-sectional dependency among the study variables. This implies that

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 12204 A. O. Agyemang et al.

by virtue of the study variables’ social characteristics, the variables are interrelated and
not dependent on individual mining companies. Hence, we accept Ho and reject Ha. This
indicates that the n variables in the sample are no longer independently drawn observations
but affect each other’s outcomes.

4.3 Unit root

From Table 4, the CIPS unit root test results show that SIZE and LEV for the three panels
are not stationary at level I (0) since they recorded values which were lower than the criti-
cal value of  − 1.47 for constant, and -2.58 for constant and trend. After differencing at first
level, the null hypothesis (Ho) is rejected, indicating that the study variables are integrated
at order one, I (1) because all the values were above the critical values.

4.4 Cointegration estimation

The study used the Common Correlated Effects Mean Group estimator (CCEMG) in Model
1. In the CCEMG estimator, the unobservable common factor is treated as a nuisance. That
is, something to be accounted for that is not of particular interest in the empirical analysis
(Cucari et al. 2018). In Model 2, the Augmented Mean Group estimator (AMG), which was
developed in (Eberhardt 2011) was used to analyze the robustness of results. Table 5 pro-
vides the results of the cointegration estimation analysis.
Table  5  shows that the Probability > chi2 value and the F statistic for Model 1 and
Model 2 of the three panels are less than 0.01, implying a 1% statistically significant coin-
tegration model. Therefore, the cointegration estimation model is considered excellent, and
estimation analysis can be performed for state-owned companies, private companies, and

Table 4  CIPS unit root

Panels Variables Level 1st difference
Constant Constant and trend Constant Constant and trend

Panel A EADI  − 2.863  − 3.159  − 4.639  − 4.684

EPI  − 2.727  − 2.751  − 4.179  − 4.414
SIZE  − 1.308  − 1.857  − 3.494  − 3.654
LEV  − 1.26  − 1.788  − 3.723  − 3.883
ROE  − 3.044  − 3.967  − 5.18  − 5.084
Panel B EADI  − 2.366  − 3.015  − 4.582  − 4.559
EPI  − 2.475  − 2.229  − 3.846  − 4.752
SIZE  − 0.687  − 1.789  − 3.47  − 3.889
LEV  − 0.996  − 1.733  − 3.236  − 3.814
ROE  − 2.435  − 2.577  − 4.582  − 4.662
Panel C EADI  − 2.74  − 3.149  − 4.69  − 4.74
EPI  − 2.673  − 2.636  − 4.095  − 4.442
SIZE  − 1.193  − 1.87  − 3.51  − 3.692
LEV  − 1.335  − 1.795  − 3.772  − 3.939
ROE  − 2.883  − 3.512  − 5.079  − 5.027

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Trend and relationship between environmental accounting… 12205

Table 5  Cointegration estimation analysis

Variables Panel A Panel B Panel C
Model 1 Model 2 Model 1 Model 2 Model 1 Model 2

EPI 1.2389*** 1.2229*** 0.7811*** 0.9325*** 1.1417*** 1.1565***

SIZE 0.0003  − 0.0022 0.0058 0.0178 0.0118 0.0000
LEV  − 0.0035  − 0.0008  − 0.0011  − 0.0079  − 0.0055  − 0.0001
ROE  − 0.0010  − 0.0006  − 0.0030  − 0.0013  − 0.0015  − 0.0009
EADI 0.9673*** 1.0066*** 0.9738***
EPI  − 1.1800***  − 0.8244***  − 1.0972***
SIZE 0.0049 0.0028 0.0050
LEV  − 0.0081  − 0.0005  − 0.0164
ROE  − 0.0002 0.0069 0.0007
Prob > chi2 0.0001 0.0000 0.0000 0.0000 0.0000 0.0000

***,**,*denote 1%, 5% and 10% significant level respectively

the combination of state-owned companies and private companies in Panel A, Panel B, and
Panel C, respectively.
Table 5 shows that the EPI and EADI are significantly positively correlated at the level
of 1% for both Model 1 and Model 2. This indicates that a one-unit increase in environ-
mental performance index results in 1.2389, 0.7811, and 1.1417 changes in the environ-
mental information disclosure for state-owned mining companies, private mining com-
panies, and a combination of state-owned and private-owned companies, respectively, in
Model 1. Similarly, using cross-section averaged regressors for state-owned in Panel A,
private-owned in Panel B, and a combination of state-owned and private-owned mining
companies in Panel C for Model 1, EADI recorded a significant and positive correlation at
1% level for Model 1. In contrast, EPI recorded significant and negative correlations. Also,
for every unit change in EPI, it resulted in 1.2229, 0.9325, and 1.1565 change in EADI
and vice versa for Panel A, B, and C, respectively, in Model 2. The positive and significant
relationship shows that as environmental performance increases, it results in the increase in
environmental information disclosure for the listed mining companies.
Using model 1, hypothesis 2 is confirmed. That is, the is a positive relationship between
EADI and EPI for listed mining companies in China. The robust model (Model 2) also
affirms the hypothesis.

4.5 Granger causality test

The pairwise Granger causality test found a bidirectional, no causality, and uni-directional
causality among the three panels. Table 6 provides the details of the causality among the
variables, which was displayed at a lag of 2.
The results revealed a mixture of bi-directional causality for EADI and EPI in all three
panels. Similarly, bi-directional causality was seen in only state-owned companies (Panel
A) for ROE on EPI. This implies that EADI causes EPI and vice versa. That is, an increase
in EADI will increase EPI. That is, a long-run correlation was found between the two.
For the three panels, the study revealed that no causality exists between ROE and EADI,
SIZE and EPI, LEV and EPI, ROE and SIZE, ROE and LEV. Similarly, ROE and EPI have

13
 12206 A. O. Agyemang et al.

Table 6  Pairwise Granger Null hypothesis: Panel A Panel B Panel C

causality test
EPI ≠ EADI 28.9365*** 5.7291*** 33.9183***
EADI ≠ EPI 235.6920*** 82.3675*** 317.0450***
SIZE ≠ EADI 0.7463 1.4927 1.3663
EADI ≠ SIZE 1.8644 0.6287 2.2255
LEV ≠ EADI 0.5452 0.3397 0.8058
EADI ≠ LEV 1.5703 0.7702 1.9704
ROE ≠ EADI 1.9611 1.4311 2.9890
EADI ≠ ROE 3.6729 1.6652 2.0216
SIZE ≠ EPI 1.1715 1.0291 2.0928
EPI ≠ SIZE 1.3415 1.1387 2.3094
LEV ≠ EPI 0.674 1.7523 1.3634
EPI ≠ LEV 1.4858 1.1792 1.4169
ROE ≠ EPI 5.9124*** 0.6427 3.9385**
EPI ≠ ROE 3.1148** 1.3909 1.1808
LEV ≠ SIZE 0.3126 0.2535 0.3517
SIZE ≠ LEV 3.2252** 16.8408*** 14.5151***
ROE ≠ SIZE 0.3705 0.2814 0.3397
SIZE ≠ ROE 1.048 0.6667 0.4389
ROE ≠ LEV 0.2676 0.0059 0.2780
LEV ≠ ROE 0.5733 0.3122 0.1833

***,**,*denote 1%, 5% and 10% significant level, respectively

 ≠ denote does not granger cause

shown no causality for private-owned companies in Panel B. That is, the above variables
cannot cause the other.
Uni-directional causality was seen in the three panels for SIZE and LEV. Also, ROE
and EPI for Panel C revealed a uni-directional causality. This implies that the mining com-
pany’s size causes leverage, but leverage does not cause the mining company’s size. Simi-
larly, profitability measured by ROE can cause EPI, but EPI cannot cause ROE.

4.6 Trend of environmental disclosure and environmental performance

4.6.1 Environmental disclosure trend

Figures 1 and 2.

4.6.2 Environmental performance trend

The study used trend analysis to show environmental disclosure and environmental per-
formance for state-owned mining companies and private mining companies in China. The
trend analysis revealed a common slope for both Environmental Disclosure and Environ-
mental Performance for all the sample companies. Per the outcome for the trend analysis,
from 2008, there was a swift increase in the environmental information disclosure, which
subsequently increased the sample companies’ environmental performance. After the swift

13
Trend and relationship between environmental accounting… 12207

1 3 4 5 7 8

.8
.6
.4
10 11 13 14 15 17
.8
.6
.4

18 19 20 21 22 23
.8
EADI
.6
.4

24 26 27 28 29 32
.8
.6
.4

2000 2005 2010 2015 2020 2000 2005 2010 2015 2020 2000 2005 2010 2015 2020 2000 2005 2010 2015 2020

33 34
.8
.6
.4

2000 2005 2010 2015 2020 2000 2005 2010 2015 2020

Year
Graphs by ID

Fig. 1  State-owned companies

2 6 9
.4 .5 .6 .7 .8

12 16 25
.4 .5 .6 .7 .8
EADI

2000 2005 2010 2015 2020

30 31
.4 .5 .6 .7 .8

2000 2005 2010 2015 20202000 2005 2010 2015 2020

Year
Graphs by ID

Fig. 2  Private companies

increase in 2008, the increase continued creepily till 2017. There was little change in the
environmental information disclosure for 2017 and 2018. Generally, environmental infor-
mation disclosure saw a massive improvement after the Environmental Information Disclo-
sure Degree (EIDD) in May 2008.
The trend analysis confirms the CCEMG and AMG cointegration estimation results. As
environmental information disclosure increases, it results in an increase in environmental
performance for all the sample companies.

13
 12208 A. O. Agyemang et al.

4.7 Discussion

Due to the national and local governments’ environmental information regulations and
policies, most of the sample companies comply with the regulations and hence disclose
environmental-related information caused by their economic activities. This eventually
resulted in a high disclosure score for both environmental disclosure and environmental
performance. Contrary, Decker and Pope (2005) revealed that less than half of the sam-
ple companies complied to environmental reporting, the findings from the descriptive
analysis for the three panes of the study indicates that, more than half of the sample
comply to environmental disclosures as stipulated by the EIDD in China.
From the perspective of disclosure quality, companies are more inclined to quali-
tative and quantitative disclosure. Majority of the companies chose to disclose infor-
mation related to environmental accounting in their annual reports such as “Financial
Statements and Notes”, “Report of the Board of Directors” and “Management Discus-
sion and Analysis” Some companies also reported their environmental activities in
their Social Responsibility Report similar to the findings of (Pedersen et al. 2013). The
mining companies listed in China made a good effort in disclosing their environmental
activities to all shareholders.
Basing on environmental economic theory and the theory of sustainable develop-
ment, our study assumed a positive relationship between environmental accounting
information disclosure and environmental performance. The correlation analysis and
the cointegration estimation for both models for the three panel confirmed the study’s
second assumption. That is, EPI and EADI are significantly positively correlated at the
level of 1%, which indicates that a unit increase in EADI, will result in the EPI and vice
versa. The cointegration estimation analysis findings are similar to the findings of (Acar
and Temiz 2020; Hassan and Romilly 2018; Tadros and Magnan 2019).
Hassan and Romilly (2018) found a significant and positive relationship between
environmental performance and quality environmental disclosure. That is, companies
with good environmental performance can distinguish themselves from companies with
poor environmental performance with sufficient and high-quality environmental infor-
mation. Similarly, Acar and Temiz (2020) urges companies to pay attention to improve
environmental performance in the production and operation process, and actively dis-
close environmental Information. Based on the above literature, it can be found that
from a long-term perspective, enterprises are encouraged to improve environmental
information disclosure as well as environmental protection. This will inevitably improve
environmental performance. Environmental performance is beneficial to the enterprise,
society, and government. Under a sound environmental management system, the market
mechanism is fully functional (Tadros and Magnan 2019). In this regard, information
disclosure plays an important role in promoting the improvement of corporate environ-
mental performance. Based on the above literature, our study assumed a positive and
statistically significant relationship between environmental information disclosure and
environmental performance. (Fig. 3).
Due to the lack of effective supervision, the environmental accidents that have been
caused have spread to a wide range, and the consequences are serious (Giannarakis et al.
2019; Welbeck et  al. 2017). This has raised concerns for environmental compliance.
Several countries have paid attention to the importance of environmental information
disclosure (Artene et al. 2020; Belhaj and Damak-Ayadi 2011; Chen et al. 2019; Mur-
difin et  al. 2019). After years of exploration and attempts, the information disclosure

13
Trend and relationship between environmental accounting… 12209

1 3 4 5 7 8

.8
.6
.4
10 11 13 14 15 17
.8
.6
.4

18 19 20 21 22 23
.8
EPI
.6
.4

24 26 27 28 29 32
.8
.6
.4

2000 2005 2010 2015 2020 2000 2005 2010 2015 2020 2000 2005 2010 2015 2020 2000 2005 2010 2015 2020

33 34
.8
.6
.4

2000 2005 2010 2015 2020 2000 2005 2010 2015 2020

Year
Graphs by ID

Fig. 3  State-owned companies

system has been revised and improved significantly. Considering high rate of produc-
tion, pollution has been one of the major concerns in China. This eventually led to the
implementation of environmental information disclosure degree in May 2008. After the
promulgation of the EIDD, measuring compliance has been of great concerns. (Fig. 4).

2 6 9
.4 .5 .6 .7

12 16 25
.4 .5 .6 .7
EPI

2000 2005 2010 2015 2020

30 31
.4 .5 .6 .7

2000 2005 2010 2015 20202000 2005 2010 2015 2020

Year
Graphs by ID

Fig. 4  Private companies

13
 12210 A. O. Agyemang et al.

After China’s effort on the legislation of information disclosure in 2008, the develop-
ment of an environmental auditing system, and the start of web-based pollutant emission
and transfer register was put in place. This eventually compelled all companies in China
to report on their environmental information about economic activities. Hence, there was
a significant improvement in the environmental disclosure for mining companies between
2008 and 2010. The increase continued gradually till 2018. Per the way EADI increased
from 2008 to 2018, as compared to how EADI was creeping from 2000 to 20,007, it can
be seen that the enforcement of the Environmental Information Disclosure Degree worked
effectively. The trend analysis affirms hypothesis 1, which says mining companies comply
with environmental information disclosure in China.  The findings from our study are in
line with the findings of Artene et al. 2020; Giannarakis et al. 2019; and Pan et al. 2020.
Artene et al. (2020) using a sample of 65 Romanian listed companies from 2011 to 2013
found that the environmental information disclosure trends have seen a major improvement
over the past decade. Similarly, Giannarakis et al. (2019) show that companies which have
established environmental management systems has made the greatest contribution to its
environmental protection awards, and in effect have improved the trends of environmental
disclosures. Our findings are consistent with our theoretical foundation. That is, after the
environmental information disclosure degree was implemented in May 2008, the trend of
environmental information disclosure has improved.

5 Conclusion and implications

5.1 Conclusion

Using panel data from 2000 to 2018, this study explores the relationship that exists between
environmental information disclosure and environmental performance for mining compa-
nies listed in China. Also, we analyzed how mining companies comply with environmental
information disclosure promulgated by the Environmental Information Disclosure Degree
in China. In order to ensure that the findings from the study are reliable and valid, the study
employed a more proficient panel estimation method in the analysis. The findings from the
study revealed the existence of cross-sectional dependency among the variables. Also, the
findings from the CIPS test revealed the variables are integrated at first difference level.
The empirical study’s cointegration estimation analysis concluded that corporate envi-
ronmental performance and environmental information disclosure have a positive and sig-
nificant relationship at a 1% level, which is consistent with the original assumptions of this
study (hypothesis 2). In addition to the above, return on equity and leverage had a nega-
tive and insignificant correlation with environmental disclosure and environmental perfor-
mance. That is, as the profitability of the mining company and debt funding ratio increases,
it reduces environmental disclosure for mining companies.
Using the Pairwise Granger test to analyze the causalities, the study recorded bi-direc-
tional, uni-directional and no causality among the variables.
Trend analysis confirmed the first hypothesis that mining companies comply with envi-
ronmental information disclosure in China. This was seen from the great improvement
in the environmental disclosure for mining companies between 2008 and 2010 after the
enforcement of EIDD. The increase continued gradually till 2018.
Based on these findings, the study recommends the provision of environmental subsi-
dies which will bring considerable economic and social benefits to enterprises. This will

13
Trend and relationship between environmental accounting… 12211

encourage companies to pursue green production actively by introduces advanced energy-

saving and emission-reduction equipment. Also, the reward and punishment system should
be enforced. This will ensure compliance with environmental reporting and in the long-
run, improve environmental performance. Lastly, sensitizing the public to keep an eye on
environmental-related issues will help in reducing environmental destruction and instead,
promote environmental performance.

5.2 Implications

The findings from our studies affirm the fact that increase in environmental information
disclosure reflects in an increase in environmental performance of mining companies. With
the growing concern of sustainable development, different countries are implementing dif-
ferent strategies to promote both economic and environmental development. Since China
leads the world with global manufacturing, side effect of production such as pollution con-
tinues to be of major concerns. This therefore calls for the improvement in environmen-
tal information disclosure for companies in China so as to enhance environmental perfor-
mance and reduce carbon emissions as production still continues. Strict policies such as
the usage of environmentally friendly plants should be put in place to reduce carbon emis-
sions. In terms of academic implications, since China leads the world with highest carbon
emission, the attention by researchers in conducting empirical and theoretical studies on
environmental related issues in China is on the rise now. This study will add to the existing
literature.

Funding  National Natural Science Foundation of China (No. 71973054).

Code availability  Not applicable.

Data availability Available.

Compliance with ethical standards 

Conflicts of interest  The author(s) declare that they have no competing interests.

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Affiliations

Andrew Osei Agyemang1   · Kong Yusheng1 · Angelina Kissiwaa Twum1 ·

Emmanuel Caesar Ayamba1 · Maxwell Kongkuah1 · Mohammed Musah1
Kong Yusheng
yshkong@ujs.edu.cn
Angelina Kissiwaa Twum
5102191206@stmail.ujs.edu.cn

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Emmanuel Caesar Ayamba

eaayamba@bpoly.edu.gh
Maxwell Kongkuah
MaxwellKongkuah@outlook.com
Mohammed Musah
prophe2013@yahoo.com
1
School of Finance & Economics, Jiangsu University, 301 Xuefu Road, Zhenjiang City 212013,
People’s Republic of China

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