Agency Theory and Carbon Disclosure in Australian Companies

Running Head: AGENCY THEORY AND CARBON DISCLOSURE IN AUSTRALIAN
COMPANIES
Agency Theory and Carbon Disclosure in Australian Companies
Name of the Student
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1AGENCY THEORY AND CARBON DISCLOSURE IN AUSTRALIAN COMPANIES
Acknowledgement
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2AGENCY THEORY AND CARBON DISCLOSURE IN AUSTRALIAN COMPANIES
Table of Contents
Introduction......................................................................................................................................3
Literature Review............................................................................................................................3
Practical Motivation.....................................................................................................................5
Theoretical Motivation................................................................................................................5
Conceptual Model............................................................................................................................6
Hypothesis.......................................................................................................................................6
Data Collection............................................................................................................................7
Data Analysis – Descriptive............................................................................................................7
Data Analysis – Inferential............................................................................................................13
Hypothesis Testing........................................................................................................................14
Discussion......................................................................................................................................17
Limitations and Further Research..................................................................................................18
References......................................................................................................................................20

3AGENCY THEORY AND CARBON DISCLOSURE IN AUSTRALIAN COMPANIES
Introduction
There have been extensive effects of the corporate companies on the environment. This
creates a global crisis. It is extremely important to deal with this crisis. The reason why this
global crisis has occurred is due to the harmful gases that are emitted from the manufacturing
companies (Buniamin et al. 2010). The businesses of the companies are controlled and directed
by the corporate governance and their activities. The companies are provided with a lot of
restrictions and measurements by the corporate governance so that the emission of harmful gases
especially carbon dioxide is minimized. The businesses are also forced to take part in various
environmental activities such as tree plantation (Ioannou and Serafeim 2017).
The main aim of this research will be to emphasize the effects of the companies on the
environment. Thus, the main focus of this research will be towards the influence of the
leadership attributes of the companies on carbon disclosure. A new concept has been introduced
so that the actions can be taken for managing the opportunities and the risks that can be faced by
the company in the future years. Quantitative analysis will be performed to understand the effect
(Saka & Oshika 2014). The data has been collected for this research with the help of a survey.
Statistical analysis tool SPSS version 20 has been used for the analysis of the data. The dataset
contained information about almost 5000 industries but for all the industries, information was not
available completely. 306 industries have been found having valid information which will be
used for the study.
Literature Review
Australia is nowadays facing serious challenges with the rapid advancements of
technology. This has resulted in economic growth and development of the country. There has

4AGENCY THEORY AND CARBON DISCLOSURE IN AUSTRALIAN COMPANIES
been gradual growth of the Australian economy over the years. However, this growth in the
economy is challenged with the fall in the stock prices and the growth in the emission of the
harmful gases in the environment. These environmental issues include emission of solid waste,
air pollution, water pollution as well as water management. According to a research by Chang,
Yeh and Liu (2015), it has been known that the emission of these waste products will increase in
a considerable amount by the year 2020. This has created a challenge to achieve the sustainable
economy. As pointed out by Herold and Lee (2018), the environmental issues that are caused by
the industries are deforestation, dumping of wastes which are hazardous to the environment and
polluting the air and the water as well. Considering all these factors, the government has
considered taking various measures to keep the environment protected from any types of
pollution. Decomposition and trend analysis is usually constructed in order to understand the
relationship between the economic growth of the country and the environmental outcomes.
The corporate governance framework in place in Australia spreads beyond mere
submissions with regulatory requirements with main voluntary elements. More so, an extensive
number of provision throughout the federal and state legislation makes the corporate directors
accountable if the company fails to adhere to the multitude of requirements (Juliet 2015). There
are laws and guidelines that run a corporate which include the non-binding guidelines, soft law
and the hard law, together with the market and agency prospects, form a framework for corporate
governance (Trireksani, T. and Djajadikerta 2016). Satisfying the best practice of commercial
leadership and commentary on the environment are a manifestation to this tow, but
interconnected spheres of presentation. The concept that was introduced in a report in the 1966
tell companies and organization not only to be financially sound but also environmentally
account so as to ensure the rights future generation are taken into consideration. Taking of the

5AGENCY THEORY AND CARBON DISCLOSURE IN AUSTRALIAN COMPANIES
right measurements to ensure the protection of the environment will reduce already caused
damage and therefore reduce the long-term effects to the next generation.
Practical Motivation
The most important crisis that is currently of major interest to the world as well as the
industries is the environmental pollution. This pollution supposedly affects the elements of
nature. Thus, the companies are forced to take part in activities to save the environment. It is
believed by several scientists that as environmental pollution increases with the emission of
harmful gases, people are getting more exposed towards environmental dangers. The carbon
release in the environment is increasing each day and this in turn increases the level of carbon
dioxide in the atmosphere. Thus, it is extremely important to reduce these emissions by the
companies. The companies have the potential to reduce the carbon emissions by their companies
by adopting necessary changes. The boards, stakeholders and the managers of the companies can
take the necessary decisions that will be helpful in controlling the amount of pollutant the
company releases in the atmosphere. Significant risks are brought to an organization as a result
of this emissions as well as to the investments of the shareholders. The organization is affected
either directly or indirectly by climatic changes indicated by natural calamities.
Theoretical Motivation
The motivation of the research stands to investigate whether good corporate leadership
practices are important in illustrating environmental responsibility of organizations in Australia.
The corporate governance framework in place in Australia spreads beyond mere submission s
with regulatory requirements with main voluntary elements. More so, an extensive number of
provision throughout the federal and state legislation makes the corporate directors accountable