The Correlation Study On Public Pressure, Corporate Governance And Environmental Cost

We have made great achievements on economic construction since the beginning of reform and opening up.But these achievements are at the expense of the environmental pollution.Lack of resources and serious pollution problems make the environmental condition increasingly serious. Air pollution, soil pollution and water pollution threaten people’s health all the time.So it is urgent to actively protect and control environment.At present, the contradiction between economic development and environmental pollution is particularly prominent in our country.The relationship between economic development and environmental protection is the relationship between human and nature in the final analysis.We should set up the ecological civilization concept of respecting nature, conforming to nature and protecting nature, striving to build a beautiful China and realizing the sustainable development of our nation.As an important subject of society,what the enterprise should do is create social wealth as well as undertake environmental responsibility.In the process of production and business operation,enterprise not only pursue maximal profit but also should balance social and economic benefits,which is the key of sustainable development. Listed companies are standardized operation representatives in people’s mind and have the duty to timely disclose the environmental information to the society.Once a serious environmental pollution accident happened to a company,it will be quickly exposed by the media and the public.What the company should do is issuing a temporary environment report in first time and disclosing the environmental information to the public factually, rather than in the way of suppressing and shuffling to solve the problems.As the public environmental awareness is growing,companies are facing increasing public pressure.Performing environmental responsibility and increasing environmental investments are the main job when companies participate in environmental governance.Good corporate governance structure is beneficial for management to make right investment decisions which is good for companies’long-term development, especially the environmental protection investment decisions.At present,the research on environmental accounting in our country is not mature.especially the study of environmental cost is still at the stage of exploration.Most domestic and foreign scholars focus on environmental cost with standard research method and the research on factors of environmental cost is rare.Listed companies mainly disclose non-monetary environmental information and pay little attention to the monetary form of environment information such as the disclosure of the environmental cost.Therefore, actively developing the study of environmental cost factors have become an important part of environmental accounting research.This paper focuses on environmental cost and proposes two hypotheses based on the theory of public pressure and corporate governance theories:first,the greater the public pressure faced by one company,the higher the environmental cost is;second.the higher the level of corporate governance,the higher the environmental cost is.This paper selects iron and steel, chemical,petrochemical,metallurgy and paper making heavy pollution industries of 181 listed companies as samples.Through manually collecting the environmental costs in the annual reports and social responsibility reports and carrying out analysis of regression,we come to conclusions as follows.The pressure from governmental supervision and public supervision as well as corporate social reputation can significantly increase the enterprise environmental cost.In addition,the ownership concentration,the scale of board of directors and the supervisory board,significantly positively relating to the environmental cost.The results show that enterprise will actively perform environmental protection responsibilities and increasing the cost of environment under the influence of the external pressure and internal governance.According to the empirical results.this paper puts forward the following suggestions:first,relevant departments should formulate corporate environmental accounting standards and set up an environmental accounting system;second,government departments should strengthen supervision function and environmental penalties;third,we should regulate media environment to make use of the supervisory role of media;forth,enterprise should optimize the corporate governance structure and improve the internal supervision mechanisms,mainly includes establishing the supervision mechanism to the big shareholders, improving the system of independent directors and expanding the scale of the board of supervisors.This paper consists of six parts in total:The first part is introduction.This part mainly introduces the research background,theoretical and practical significance, research ideas and content as well as the innovation.The second part is literature review.This part mainly describes the content of environmental cost, the measurement method of environmental cost,the relationship between public pressure and environmental cost and the relationship between corporate governance and environmental cost.The third part is the analysis of environmental cost theories. First of all,this part introduces the concepts of public pressure,corporate governance and environmental cost.Then analyzing the theories of environmental cost from the external and internal motives.The external motivation theories include legitimacy theory,public pressure theory, externality theory and sustainable development theory; The internal motivation theories include principal-agent theory and asymmetric information theory.The fourth part is the empirical research design.lt introduces the research hypothesis, the variables design, the model design,the selection of sample as well as the data sources.The fifth part is the empirical study and analysis.It uses multiple regression method to test the effect that public pressure and corporate governance have on the environmental cost,and then makes correlation analysis and robustness testing.The sixth part is the conclusions and recommendations, it mainly explains the conclusions of empirical analysis and puts forward several policy suggestions.