Impact of environmental award and financial performance on environmental disclosure quality: a case study of listed companies in Pakistan

As global environmental concerns have grown, so too have calls for more corporate environmental transparency and responsibility. Businesses are participating in programs such as earning environmental awards and improving their financial performance to promote their company image and demonstrate that they are effective environmental stewards. This research examines the nexus between environmental awards, environmental disclosure quality, and the firm performance of non-financial companies listed on Pakistan's Stock Exchange (PSX) from 2016 to 2020. This research aims to determine if environmental disclosure, indicative of accountability and transparency, is affected by awards for environmental success. The study incorporated quantitative information from 300 non-financial firms. The findings suggest a connection between environmental disclosures' quality and environmental awards' attainment, as the analysis shows their p-values are less than 0.05. As a result, we discovered a strong positive correlation between winning environmental awards and the quality of environmental disclosure. Similarly, financial performance does not affect environmental disclosure quality as the p-values of ROA, ROE, and Profit Margin are more than 0.05. As a result, we discover a weak/no correlation between financial performance and environmental disclosure quality. The conclusions of this study stimulate more accountable and responsible business practices, which would enhance our collective efforts to create a more sustainable and environmentally friendly future. The study's findings on the impact of environmental awards and financial performance on environmental disclosure quality indicate many avenues to improve sustainability practices and disclosure.