Assessing the Green Securities Policy in China: An Examination of Environmental Disclosure by Chinese Listed Companies in Highly Polluting Industries

Abstract

In 2008, China released a new green initiative, the Green Securities Policy, to increase the sustainability of Chinese capital markets. One of the integral components of the policy is the new environmental disclosure regulation which prescribes Chinese listed companies in the 14 highly polluting industries to report required environmental information. This research seeks to explore the regulation from two dimensions. First, the research evaluates the levels of environmental disclosure by Chinese listed companies regulated under the Green Securities Policy from the years 2008 to 2010. The findings suggest that the levels of environmental disclosure by the sample companies increased but remained low from 2008 to 2010. Second, the research examines the dynamics underlying environmental disclosure by Chinese listed companies through the lens of Ecological Modernization Theory. While China’s ecological modernization has created a positive environment for environmental disclosure regulation in general, the research highlights the current problems in China’s political, social and market arena that have impeded the progress of environmental disclosure by Chinese listed companies.