Sustainability Disclosure on Environmental Reporting : A Review of Literature in Developing Countries

In recent decades, environmental issues have emerged as a topic of increasing importance in the accounting literature. Environmental matters associated with industrial activities have increased public concerns about both financial and non-financial performance of firms leading to arising pressure for the disclosure and studies of environmental reporting, especially in developed countries. In the developing countries, however, relatively limited research in this area has been published, particularly in the Arab region. The main objective of this article is to present a review of recent literature on the sustainability accounting disclosure in developing countries. A number of theoretical frameworks have been developed to provide a further understanding of the concept of accounting for the disclosure. The literature reveals that the stakeholder theory is utilized in most studies. According to this theory, firms have to provide sustainability and environmental disclosure due to the pressures from all types of stakeholders and communities. Other theories which have been advanced to explain the disclosure practice include political economy, legitimacy, and institutional theory. In general, no specific theory is complete on its own or superior to another. The focus of this review is on identifying the determinants of the environmental disclosures and the current gap in those studies. These determinants can be divided into four groups. The first group examines the national contextual factors, the second group investigates the ownership structure, the third group evaluates companies' characteristics, and final group investigates governance attributes as the determinants of the environmental disclosure practice. The review reveals a large variation related to environmental disclosure level in developing countries. The article contributes to the literature by providing a further understanding of environmental disclosure practices in countries where published studies are still very limited. This study also provides recommendations and direction for future research on sustainability environmental disclosure