The aim of this research is to investigate the disclosures and factors influencing
of corporate environmental responsibility (CER) in the annual reports of
Shariah-compliant companies listed in the Main Market of Bursa Malaysia. A
total of 254 company annual reports for the year 2010 were analyzed.
Regression analysis was used to examine the relationship between corporate
environmental responsibility disclosure (CERD) and independent variables
consisting of independent non-executive directors, Muslim chairman/president
of the board, Muslim ownership structure, profitability, auditor types, company
size and industry profile. Study findings suggest that there is a fair amount of
CER disclosure amongst Shariah-compliant companies listed with Bursa
Malaysia. The study revealed that the presence of a Muslim chairman/president,
the type of auditors employed and a company’s size have a significant
relationship with CER disclosure. In contrast, the extent of CER disclosure is
insignificant with regard to the proportion of independent non-executive
directors on company boards, the level of Muslim ownership, profitability and
industry profile. The research shows that the level of CER disclosures is
different across sectors and is relatively low. This study provides evidence for
regulatory bodies such as Shariah Advisory Council (SAC) of the Securities
Commission Malaysia to look further at Shariah-compliance guidelines and to
enforce new policies on environmental reporting.
