1 Introduction

Ecological considerations are mostly overlooked in the financial accounting model, and they are not included in the accounting reporting (Agyemang et al. 2021). Environmental problems have become global issues in recent years, influencing most countries to adopt stringent environmental protection legislation. This has influenced some countries, including China, to adopt “Environmental Accounting Information Disclosure (EAID).” EAID is an essential content of ecological accounting that requires firms to report on both economic gains and environmental sustainability. That is, the income statement should provide relevant environmental information, and the items related to ecological expenses should be disclosed in addition to financial information.

Like many other countries, China places high value on resource conservation and on preserving the environment (X. Xiang et al. 2020). The promulgation of the Environmental Information Disclosure Decree in 2008 shows the practical importance that the Chinese government and other stakeholders, such as the Shanghai Stock Exchange, attach to environmental issues (Agyemang et al. 2021). The decree requires that listed companies and companies that want to be listed must fully disclose their environmental impact. The disclosure enables the public to know the environmental performance of various companies in China. This shows the practical importance that the Chinese attach to sustainable development and, hence, the need for academic studies in this area.

There is a research gap on environmental accounting and performance on a sectoral basis in China. Earlier scholars of ecological disclosures studies have typically evaluated only a handful of corporations, cities, or provinces in their empirical studies (Leung & Snell, 2019; Murdifin et al. 2019; Pavlopoulos et al. 2019). Very few previous research concentrated on investigating an industry’s ecological disclosure and environmental performance (Agyemang et al. 2020). Hence, the authors were motivated to examine the nexus between environmental accounting and performance in the Chinese mining sector.

The board of directors are the organization’s lawful supervisors (Salehi & Zimon, 2021). Earlier studies have shown that board characteristics have an impact on environmental accounting disclosures. Also, previous studies have opined that environmental accounting disclosure significantly influences firms’ environmental performance and financial performance. From this background, this study sets the following objectives. (1) To investigate how ecological disclosures impact EPI. (2) To examine board features’ impact on environmental accounting information disclosure. (3) To explore how environmental accounting disclosures influence firms’ profitability.

Due to China’s high pollution rate in the past decade, there is a need to study industry-specific factors that can help reduce China’s carbon emission rate. Hence, this study will contribute to existing literature and suggest policy implications on how the mining industry can reduce carbon emission rate in China.

Using a sample of fifty-one out of the sixty-six companies in the mining sector, the authors utilized secondary data from 2000 to 2020. The authors utilized the Common Correlated Effects Mean Group (CCEMG) estimation technique for the regression analysis. The CCEMG estimator was employed because it deals with possible cross-sectional dependencies, heteroscedasticity, serial correlation, and endogeneity, thereby freeing the results from these issues (Khan et al. 2021; Ostic et al. 2022).

We found a positive slope connection between EAID and ecological performance. Regarding board attributes, outside directors, board meetings frequency, and the annual remuneration recorded a favorable and significant connection with EAID. In addition, board size recorded an inverse and significant relationship with EAID. The other board attributes revealed a favorable but insignificant link with EAID. Moreover, the findings posit that both EADI and EPI have a positive connection with the profitability of the mining firms.

The research findings bridge the literature gap on environmental accounting and performance in China. These findings offer a detailed understanding for stakeholders. The proposed indexes for measuring environmental disclosure and performance have never been used in any study before. Policymakers can base on the proposed indexes and come out with a standardized EAID and EPI for the various industries within the Chinese economy. The findings from the study can be extended to other mining industries in other countries to provide policymakers on how firms provide quality EAID on time. This will enable all stakeholders to have the needed information for decision-making purposes.

2 Literature review

2.1 Theoretical basis (information asymmetry theory)

In the 1960s, three American economists introduced the notion of information asymmetry (Giannarakis et al. 2019). The information asymmetry hypothesis describes the asymmetry or degree of information among parties in a transaction (Song et al., 2021). If “the party with more information is in a dominating position, while the side with less information is in an inferior one,” information is incomplete and asymmetric (Ayamba et al., 2020a). Moral risk and unfavorable selection risk will arise due to knowledge asymmetry.

There is a difference in knowledge of the real functioning of the firm between internal and external people, resulting in divergent assessments of the organization’s worth by corporate interest groups. In most cases, individuals involved in the transaction will have an advantage, while others who do not have sufficient knowledge of the information will be at a disadvantage. There is an information asymmetry issue in the event of information asymmetry since the board of directors and management have more internal knowledge than the company’s shareholders. At the same time, conflicts of interest will arise due to the operator’s and owner’s divergent pursuit of objectives (Tawiah et al. 2021). Moral hazard issues are expected to arise due to the advent of knowledge asymmetry.

Companies are the stewards of environmental resources in terms of sustainable development. Companies are both consumers and beneficiaries of environmental resources as trustees. As a result, businesses accept the public’s faith in environmental resources. Hence, businesses must disclose public information on environmental resource preservation to their stakeholders (Osei et al. 2017). This information must be made public as soon as possible. The information’s users will be able to comprehend complete and reliable environmental resource data, understand the condition of corporate operations, and eliminate information asymmetry (Shen et al. 2019).

After the Chinese government promulgated the Environmental Information Disclosure Decree in May 2008, listed companies in China are expected to disclose information relating to environmental protection to the public. The directors and management are obliged to disclose ecological information related to their firms so that other stakeholders will be well informed on environmental protection issues to avoid information asymmetry problems.

2.2 Empirical review and hypotheses development

2.2.1 Environmental disclosure and ecological performance

Based on information asymmetry theory, companies must disclose adequate and quality information to all stakeholders regarding their economic and ecological issues. This is because external investors utilize the degree of EAID as a model for corporate ecological administration (Gerged et al., 2021b). Scholars have had mixed conclusions on the connection between EAID and environmental performance, whereas some scholars found an inverse or no connection between the two, a greater part of the studies revealed a positive connection between EAID and ecological performance. Bhattacharyya (2019) found no link between EAID and EP from a sample of 78 US high-polluting corporations when the authors employed pre-selection criteria across four themes. The findings revealed that the firm’s ecological disclosures did not necessarily influence a firm’s EP. On the other hand, Susanto and Meiryani (2019) discovered a negative link between EAID and EP using a sample of 138 firms in the Eurozone from 2000 to 2017. The findings discovered that companies with poor environmental performance proxy by emissions diverged more ecological information than firms with good ecological performance. Contrarily, Gani (2021) found that energy effectiveness and innovation development brought about a huge expansion in green performance levels and enhanced ecological disclosure accuracy, that is, a positive connection between EAID and EPI. Similarly, Artene et al. (2020) revealed that the overall assessment of EAID has a bi-directional relationship with environmental performance. Also, Agyemang et al. (2021) found a positive slope link between EAID and EPI for high-polluting firms in the Jiangsu Province of China from 1995 to 2018, when the authors employed the PMG estimation technique for their panel data. Holding to the positive connection from majority of studies, the study assumes that;

H1

A positive relationship exists between EAID and environmental performance.

2.2.2 Board attributes and environmental information disclosures

The fundamental capacity of the board is its ability to control the operating system effectively. The size of the board influences the effectiveness of dynamic among board individuals and the degree of data disclosure (Jizi, 2017). According to Fernandes et al. (2019), the smaller board size has a high level of disclosure. Good corporate governance practices provide that, except for financial establishments, remaining firms should have a more modest board size to guarantee adequacy and proficiency. Pavlopoulos et al. (2019) tracked down that the more modest size of the board has improved the exhibition of the top managerial staff. The investigation uncovered that if the quantity of board individuals surpasses seven (7), it will decrease the proficiency of the activity and level of information disclosure. Contrarily, Oh et al. (2019) found an inverse relationship between board size and voluntary disclosures. However, Osei et al. (2019a) revealed that the size of the board is not very relevant to information disclosure since their findings concluded no connection between the two. Based on the above, it is hypothesized that

H2

A negative relationship exists between the size of the board and EAID for mining organizations.

Studies have shown that independent directors’ conduct significantly affects the reinforcement of the inner administration instrument of the organization by the outside directors. The results of several studies in recent years indicate that independent directors can be beneficial in terms of data disclosure. The more prominent the extent of outside executives, the greater the organization’s wilful divulgence of data (Oh et al. 2019). The study by Gerged et al. (2021a) showed that the higher the proportion of outside directors had less earnings management oversight and a high level of information disclosures. A study by Liu and Zhang (2017) demonstrates that the more outside directors, the higher details on voluntary reporting are. Notwithstanding the positive slope link between independent directors and information disclosure, some studies found no or inverse link between the two. Osei et al. (2019a) empirical studies found that independent directors on corporate boards have no link with voluntary disclosures using a sample of 218 firms listed in India from 2000 to 2015. Similarly, the findings from Agyemang et al. (2020) revealed no connection between a higher proportion of independent directors and information disclosure, suggesting that independent directors on corporate boards do not influence high and quality information disclosure, including ecological information. Based on the majority of prior studies, we assumed that

H3

A positive relationship exists between the outside board directors and the ecological disclosures for mining firms.

Additionally, rights and interests issues may come up if one person occupies the CEO and board chairman position, which will increase the organization’s cost (Fernandes et al. 2019). The CEO may cover horrible data, including EAID, for his private interest. Earlier studies on CEO duality and information disclosures have shown diverse conclusions. The study by Osei et al. (2019b) found that when the same person occupies the two positions, it reduces voluntary disclosure, especially those adverse to the company. Similarly, Arslan et al. (2022) concluded that having the same person as CEO and board chairman using a sample of 59 manufacturing firms in Russia has no impact on information disclosure level. Contrarily, Osei et al. (2019a) opined that once the CEO is the same person occupying the board chair position, information that may tarnish the image of the firm is not disclosed to other stakeholders, thereby leading to the phenomenon of ‘self-monitoring-self.’ As a good corporate governance principle, the position of the CEO is expected to be different from that of the board chairman to ensure transparency and a high level of disclosure. This position has been affirmed by scholars such as (Ben‐Amar et al. 2022, Ullah & Wu, 2022). Following majority of earlier studies, we hypothesized that

H4

A positive relationship exists between the separation of CEO from a board leadership position and the ecological disclosures for mining firms.

“Board gender diversity is known as the extent of the board of directors that are female” (Agyemang et al. 2021). Some scholars recommend that female directors emphatically affect voluntary divulgence. Gerged (2021) tracked down the extent of female directors and revealed that gender attributes significantly affected the organization’s information revelation. Appointing female directors may carry alternate points of view and thoughts to the firm since gender diversity directly affects the social obligation disclosure of firms (Arslan et al. 2022). Contrarily, Buallay et al. (2022) contended that female directors on the board do not significantly influence quality information disclosure, including ecological information. Based on majority of earlier studies, we assumed that

H5

A positive relationship exists between gender diversity and ecological disclosures for Chinese mining organizations.

As indicated by Jizi (2017), different nationalities improve the boardroom’s nature and dynamics. To guarantee assorted nationals on corporate boards, corporate governance rules empower various nationals’ on the board (Gerged, 2021) . This is because the variety of the board individuals brings diverse attitudes that, when collected, reflect in high productivity and information disclosures. Organizations with foreign directors will, in general, reveal more voluntary information. This is because the arrangement of foreign directors improves the dynamic in the boardroom and increases information disclosure (Fuente et al. 2017). However, the empirical findings from (Ben‐Amar et al. 2022) revealed that there is no connection between foreign nationals and information disclosure for pharmaceutical firms in China. Therefore it is hypothesized that

H6

A positive relationship exists between foreign nationals on the board and environmental disclosures for Chinese mining organizations.

Agyemang et al. (2020) suggest that disclosures of information rise with board committee meetings frequency. Liu and Zhang (2017) study affirmed the position of Agyemang et al. (2020) where the authors found a favorable link between the board meeting frequency and information disclosures. Also, Iredele (2019) observational exploration tracked down that the lesser executive gatherings, the more unfortunate the EAID. Fuente et al. (2017) observational research tracked down that the higher the frequency of board gatherings, the more the data divulgence. Oh et al. (2019) found the number of executive gatherings and the nature of data divulgence are fundamentally positively related. Notwithstanding the positive connection, some studies have found contrary views. For example, Pavlopoulos et al. (2019) found no relationship between the frequency of annual board meetings and accounting fraud. Also, Arslan et al. (2022) research revealed an inverse relationship between the number of yearly board meetings and the company’s quality information disclosures using a sample of 211 companies from Bangladesh from 2000 to 2019.

H7

A positive relationship exists between board meetings frequency and EAID for mining firms.

Some analysts accept that motivating forces can successfully improve the nature of bookkeeping data. Fuente et al. (2017) consider having shown that senior administration possessions can prevent bookkeeping misrepresentation to a limited degree. Jizi (2017) explored the effects of corporate administration on corporate performance using the executives’ incentives as a proxy. The investigation proposed that directors’ annual remuneration fundamentally influences an organization’s performance and information disclosures based on earlier studies by Agyemang et al. (2020). It is therefore hypothesized that

H8

A positive relationship exists between annual remuneration and ecological disclosures for mining organizations in China.

In addition to annual remuneration, some scholars have considered shareholding proportion as a determinant of high performance and information disclosures (X. Xiang et al. 2020). There is a mixture of conclusion from previous studies on shareholding proportion and voluntary disclosures, whereas scholars like Fuente et al. (2017) and Agyemang et al. (2020) found a positive link between the shareholding proportion and voluntary disclosures related to the ecology, Buallay et al. (2022) opined that there is no link between the shareholding ratio and quality information disclosures for listed firms in the Eurozone. Based on the above, the following hypotheses are developed.

H9

There is a positive relationship between shareholding proportion and ecological disclosures for mining organizations in China.

2.2.3 Environmental disclosure, ecological performance and profitability

Reliable with Lin et al. (2021), the authors contend that ecological divulgences are highly esteemed for several reasons. Initially, a solid standing in the social field, as reflected by more broad and target environmental disclosure, aids customers in patronizing products of the firm, thereby increasing profitability. Environmental disclosure and ecological performance possibly give investors primary data that positively influence an organization’s future cash flows and profit. The extensive voluntary disclosure increases the level of trust that clients have in the firm, which eventually increases the cash flow and profitability (Gerged et al., 2021b). Ifada et al. (2021) used 429 observations from Kenya organizations as a sample and reasoned that there is a favorable link between firms’ profitability and information disclosure by employing the FMOLS for the long-run relationship analysis. Based on the above, we assumed that

H10

A positive relationship exists between EAID and returns on equity.

Ecological performance likewise assists a firm with drawing in and retaining employees and improving representative assurance and, consequently, profitability (Shah et al. 2021). Gerged et al. (2021a) reported on the corporate environmental performance with capital business sectors in Western nations and concluded a positive connection exists between ecological performance and corporate financial performance. Similarly, Ding et al. (2022) found a positive connection between environmental performance and profitability of firms, whereas Kongkuah et al. (2021a) found an inverse relationship between the two using a sample of 91 firms from West Africa. Basing on the findings from majority of previous studies, we assumed that

H11

A positive relationship exists between ecological performance and returns on equity.

3 Materials and methods

3.1 Research design

The methodological plan for this investigation takes a gander at the cycles utilized in gathering information to respond to the research objectives. For this examination, the authors embraced secondary data extracted from yearly reports, budget summaries, and open-access data from the Chinese Ministry of Ecological Protection. Most of the data for the empirical analysis were promptly accessible on Ifind and CSMAR databases. The empirical analysis covered 21 years from the period 2000 to 2020 due to data accessibility. The variables selected were considered suitable due to data availability for listed mining enterprises in China. The authors utilized EViews version 10.0 and Stata version 12.0 for the experimental analysis since this software examines the related relations and statistical values of the model’s variables (Jijian et al., 2021; Tawiah et al., 2019, 2021).

3.2 Population and sampling

The authors selected China as the study population since China tops the world with regard to the 2020 global carbon emissions (Andrew, 2020). After selecting the study population, the authors further explored the various industries and sectors to identify the sector that contributes significantly to carbon emission. The mining sector was identified as a major contributor to air pollution (Ayamba et al., 2020b). Hence, the mining sector was selected as the sample size.

In order to obtain strongly balanced panel data, the authors considered listed mining firms that had complete datasets for the 21 year period. In effect, the final sample comprised fifty-one mining firms from the two stock exchanges on China’s mainland.

3.3 Data

To acquire data on environmental disclosures and ecological performance, yearly reports, open-access data, and data from the environmental protection were critically reviewed to distinguish explicit catchphrases that identify with environmental disclosures and ecological performance such as environmental conservation, energy protection, carbon emission decrease, greening expenses, resource utilization, sewage charges, wastewater, and reusing of materials.

With the exception of EAID and EPI, the data were readily accessible on Ifind and CSMAR databases for the other study variables. Hence, the authors extracted the data for the other study variables from these sources.

3.3.1 Environmental accounting disclosure index (EADI)

The authors proposed EADI to assess the transparency of all publicly traded mining businesses in the study. Based on the sample firms’ disclosures, the content analysis approach was used to assign ratings. The EADI topics are separated into financial information (eight items) and non-financial information (eight items). Firms that made a full disclosure received three (5) points, companies that supplied a reasonable disclosure received one (3) point, and companies that did not disclose at all received zero (0) points. EADI was calculated by dividing the sample company’s score by fifty-four (80). Table 1 presents the details of items considered in determining the EADI of the mining firms.

Table 1 Items for EADI
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3.3.2 Environmental performance index (EPI)

The EPI was developed to calculate the environmental performance of the listed mining corporations. As a foundation for measuring EPI, the authors presented four criteria. The four components were then given scores, which were then added together as a ratio to the overall score; the Yes indicator received three (4) points, while the No indication received zero (0) points. The EPI is calculated by dividing the sample company’s score by a total score of 16. The higher the score, the better the company’s environmental performance. Table 2 presents the details of items considered in the EPI.

Table 2 Items for EPI
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3.4 Model specification

In examining the connection between ecological performance and EAID (H1), the authors adopted a modified model by Deswanto and Siregar (2018), which is given as

$${\text{EPI}}_{{{\text{it}}}} = \beta_{0} + \beta_{1} {\text{EADI}}_{it} + \beta_{2} {\text{SIZE}}_{it} + \beta_{3} {\text{LEV}}_{it} + \beta_{4} {\text{ROE}}_{it} + \varepsilon_{it}$$
(1)

where EPI is the Environmental Performance Index, EADI is Environmental Accounting Disclosure Index, SIZE is the company’s size measured by total assets, LEV is the company’s total debt, and ROE (Return on Equity) measured the profitability of the mining company. Also, β0 represented the fixed intercept element, ε represented the error term in the model, i was used to representing the sample company, and t represented year.

In testing board attributes’ impact on ecological disclosures H2 to H9, the authors modified the model proposed by Liu and Zhang (2017). The specific model is given as

$$\begin{aligned} {\text{EADI}}_{{{\text{it}}}} = & \beta_{0} + \beta_{1} {\text{BS}}_{{{\text{it}}}} + \beta_{2} {\text{IND}}_{{{\text{it}}}} + \beta_{3} {\text{CEOD}}_{{{\text{it}}}} \\ & + \beta_{4} {\text{GD}}_{{{\text{it}}}} + \beta_{5} {\text{FN}}_{{{\text{it}}}} + \beta_{6} {\text{BM}}_{{{\text{it}}}} + \beta_{7} {\text{ARN}}_{{{\text{it}}}} + \beta_{8} {\text{SP}}_{{{\text{it}}}} \\ & + \beta_{9} {\text{SIZE}}_{{{\text{it}}}} + \beta_{10} {\text{LEV}}_{{{\text{it}}}} + \beta_{11} {\text{ROE}}_{{{\text{it}}}} + \varepsilon_{{{\text{it}}}} \\ \end{aligned}$$
(2)
$$\begin{aligned} {\text{EPI}}_{{{\text{it}}}} = & \beta_{0} + \beta_{1} {\text{BS}}_{{{\text{it}}}} + \beta_{2} {\text{IND}}_{{{\text{it}}}} + \beta_{3} {\text{CEOD}}_{{{\text{it}}}} + \beta_{4} {\text{GD}}_{{{\text{it}}}} \\ + \beta_{5} {\text{FN}}_{{{\text{it}}}} + \beta_{6} {\text{BM}}_{{{\text{it}}}} + \beta_{7} {\text{ARN}}_{{{\text{it}}}} + \beta_{8} {\text{SP}}_{{{\text{it}}}} + \beta_{9} {\text{SIZE}}_{{{\text{it}}}} \\ + \beta_{10} {\text{LEV}}_{{{\text{it}}}} + \beta_{11} {\text{ROE}}_{{{\text{it}}}} + \varepsilon_{{{\text{it}}}} \\ \end{aligned}$$
(3)
$$\begin{aligned} {\text{ROE}}_{{{\text{it}}}} = & \beta_{0} + \beta_{1} {\text{BS}}_{{{\text{it}}}} + \beta_{2} {\text{IND}}_{{{\text{it}}}} + \beta_{3} {\text{CEOD}}_{{{\text{it}}}} + \beta_{4} {\text{GD}}_{{{\text{it}}}} \\ + \beta_{5} {\text{FN}}_{{{\text{it}}}} + \beta_{6} {\text{BM}}_{{{\text{it}}}} + \beta_{7} {\text{ARN}}_{{{\text{it}}}} + \beta_{8} {\text{SP}}_{{{\text{it}}}} + \beta_{9} {\text{SIZE}}_{{{\text{it}}}} \\ + \beta_{10} {\text{LEV}}_{{{\text{it}}}} + \beta_{11} {\text{ROE}}_{{{\text{it}}}} + \varepsilon_{{{\text{it}}}} \\ \end{aligned}$$
(4)
$$\begin{aligned} {\text{ROE}}_{{{\text{it}}}} = & \beta_{0} + \beta_{1} {\text{EPI}}_{{{\text{it}}}} + \beta_{2} {\text{EADI}}_{{{\text{it}}}} + \beta_{3} {\text{BS}}_{{{\text{it}}}} + \beta_{4} {\text{IND}}_{{{\text{it}}}} + \beta_{5} {\text{CEOD}}_{{{\text{it}}}} \\ + \beta_{6} {\text{GD}}_{{{\text{it}}}} + \beta_{7} {\text{FN}}_{{{\text{it}}}} + \beta_{8} {\text{BM}}_{{{\text{it}}}} + \beta_{9} {\text{ARN}}_{{{\text{it}}}} + \beta_{10} {\text{SP}}_{{{\text{it}}}} \\ + \beta_{11} {\text{SIZE}}_{{{\text{it}}}} + \beta_{12} {\text{LEV}}_{{{\text{it}}}} + \varepsilon_{{{\text{it}}}} \\ \end{aligned}$$
(5)

In the model, the environmental accounting disclosure index is represented by the symbol EADI, whereas environmental performance is represented by EPI. BS denotes Board Size, IND is independent directors on the board, CEOD represents the avoidance of one person occupying the CEO and board chairman position, GD is gender diversity on the board, FN denotes the number of foreign nationals in the boardroom, BM is the number of board meetings, ARN denotes the annual remuneration to board members, and SP represents the shareholding proportion for board members. The firm’s size was represented by SIZE, while LEV denotes the mining firm’s total leverage, and ROE represents the profitability of the firm measured by return on equity.

To examine the robustness of the findings, the authors first examined the effect of board attributes on environmental performance and profitability using Eq. 3 and Eq. 4, respectively. The authors further explored the effect of environmental disclosure, environmental performance, and board attributes on firm profitability using Eq. 6.

In exploring the empirical relationship between environmental disclosure on profitability, as well as environmental performance on profitability, the study proposed a model giving us

$${\text{ROE}}_{{{\text{it}}}} = \beta_{0} + \beta_{1} {\text{EADI}}_{{{\text{it}}}} + \beta_{2} {\text{EPI}}_{{{\text{it}}}} + \beta_{3} {\text{SIZE}}_{{{\text{it}}}} + \beta_{4} {\text{LEV}}_{{{\text{it}}}} + \varepsilon_{{{\text{it}}}}$$
(6)

where ROE (return on equity) measures the profitability of the mining company, EADI and EPI denote environmental disclosures and ecological performance, respectively. SIZE represents the total assets of the mining company, which measures the firm size, and finally, LEV is the total debt of the mining firm.

3.5 Description of study variables

Table 3 provides a summary of the study variables. Three variables were used as the dependent variable in the entire study. In answering the first objective, the authors used the environmental performance index as the dependent variable. Environmental Disclosure Index was used as the dependent variable in objective two. In both objective 1 and objective 2, the authors used profitability as a control variable. In objective 3, profitability was used as the dependent variable, whereas EADI and EPI were used as the independent variables in objective 3. In objective 3, the control variables were limited to the company size and the degree of debt only.

Table 3 Summary of study variables
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3.6 Estimation techniques and data processing

First of all, the authors examined the descriptive statistics to describe the dataset’s characteristics and correlation matrix analysis which examines the relationships between the variables. A stationarity test was conducted to analyze if the data are stationary. Since the CCEMG estimator is robust to conditional cointegration, the authors did not examine cointegration’s presence or absence. The authors finally utilized the CCEMG estimation technique for the multiple regression.

The study utilized the CCEMG estimator for the multiple regression. Utilizing CCEMG solves any cointegration problem that may arise (Kongkuah et al. 2021b; Li et al. 2020; Ozgur et al. 2021). The CCEMG estimators additionally consider any cross-sectional reliance and allow for unrelated incline coefficients. Moreover, the authors used the CCEMG estimator, which is resilient to endogeneity, to adjust for probable endogeneity difficulties (Damette & Marques, 2019). Consequently, the findings of the CCEMG estimator give vital evidence from the empirical study.

4 Results and discussion

4.1 4.1 Summary statistics

The summary analysis in Table 4 recorded a mean of 0.732 for EPI. This implies that the environmental performance of publicly traded companies on average is very good. That is, mining firms compliance with environmental policies and laws are very encouraging. Notwithstanding the high compliance in general, some mining firms compliance level is very low, leading to a minimum value of 0.370 for environmental performance.

Table 4 Summary statistics analysis
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Moreover, EADI recorded an average of 0.609 with a median of 0.668. The closeness of the mean and the median posits that the dataset is evenly distributed. The low environmental disclosure index value affirms that some mining firms do not disclose information related to the environment in their financial statements and annual reports, resulting in low environmental performance for such firms.

Regarding the board attributes; BS, IDR, GD, FN and BM recorded mean values that were very close to the median indicating that the dataset is symmetrically distributed. Similarly, the board attributes above recorded less values for the standard deviating, suggesting that the disparity of the data is widely dispersed.

Annual remuneration revealed an average of 3.096 million yuan and a median of 2.200 million yuan. The least and highest annual remuneration values recorded were 0 and 37.000 million yuan, respectively, showing that the board members were well remunerated. The minimum value of 0 yuan recorded was as a result of the fact that the board members for one of the mining companies voluntarily decided not to take board remuneration since they started their roles as board members toward the end of the year, and that was the first year of the mining company being in existence. Annual remuneration recorded a standard deviation of 3.248 million yuan implying that the data are widely dispersed. Shareholding proportion recorded an average and median values of 5.877 billion yuan and 0, respectively, which implies the dataset is asymmetrically distributed. The median value of 0 indicates that the majority of the sample mining firms did not have shareholding offers for their directors.

For the control variables, the size of the mining firms recorded a mean of 1,260 billion yuan with a maximum and minimum of 20,000 billion yuan and 0.053 billion yuan. This shows that the total asset used as a proxy for a firm’s size is encouraging. Regarding the degree of debt, LEV recorded a median value that was far from the mean, suggesting an asymmetric distribution of the data.

Regarding skewness, with the exception of EPI, EADI, and IDR, all of the other research variables had a positive value greater than 1.0, suggesting that the dataset had a strong positive skewness. The negative values less than 1.0 recorded for EPI, EADI, and IDR suggest fairly skewness in the dataset. The kurtosis values for all of the research variables were more than 3, suggesting that the distribution of these parameters is not usual. The VIF findings showed a range of 1.02 to 7.92, indicating that the dataset has no multicollinearity issues. Additionally, the average variance inflation factor of 2.23 recorded affirms the absence of multicollinearity in the dataset.

4.2 Correlation analysis

In the pairings of research variables, the Spearman Correlation Matrix findings in Table 5 indicated a mix of weak and average relationships. The largest absolute correlation was 0.677 between SIZE and LEV, while the lowest absolute correlation was 0.004 between FD and IDR. With the exception of Board Meetings (BM), Annual Remuneration (AR), Size (SIZE) and degree of debt (LEV), the other variables revealed a positive correlation with Environmental Performance Index (EPI). There were no correlations over 0.7, suggesting that there was no multicollinearity.

Table 5 Correlation results
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4.3 Cross-sectional dependency (CD) analysis

Since the CCEMG estimator is robust to cross-sectional dependency, there is no need to perform this test (Shijian & Agyemang, 2022). However, to enable the authors to select an appropriate stationarity test, the authors performed the cross-sectional dependency test. The results of the CD are presented in Table 6

Table 6 Cross-sectional dependency results
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The CD findings in Table 6 confirm the existence of CD. Both Friedman’s and Pesaran’s tests found that at the 1% level, all of the study variables were statistically significant. As a consequence, we reject the null hypothesis of no CD and adopt the alternative hypothesis of cd, which states that any mining company’s shock would most likely spread to other mining companies due to cross-sectional dependency in the dataset.

4.4 Stationarity test

The results of the CD test are presented in Table 7.

Table 7 CIPS unit root results
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From the CIPS unit root test in Table 7, the results revealed that gender diversity (GD), foreign nationals (FN), shareholding proportion (SP), size of the firm (SIZE), and degree of debt (LEV) were not integrated at level for both constant and constant with trends since the values recorded were below the critical values of -2.08 and -2.58, respectively. The other study variables were integrated at the level for both constant and constant with trends. Since some of the variables were not integrated at level, the authors performed the stationarity test at first difference. After first differencing, all the study variables were integrated at both constant and constant with trends. Therefore, the authors concluded the variables are integrated at the first difference I(1).

4.5 Multiple regression analysis

The authors utilized the CCEMG estimator for the multiple regression analysis. The CCEMG was utilized because it is robust to conditional cross-sectional dependency, heteroscedasticity, and autocorrelation. Also, the authors used the CCEMG estimator, which is resilient to endogeneity, to adjust for probable endogeneity difficulties (Damette & Marques, 2019). Consequently, the findings of the CCEMG estimator give vital evidence from the empirical study.

The authors utilized six models in the regression analysis. The first model (Model 1) was used to explore the impact of environmental accounting disclosures on environmental performance for public traded mining companies. Therefore, EPI was used as the dependent variable in Model 1. In Model 2, the authors examined the effect of board attributes on environmental disclosures. Hence, EADI was used as the dependent variable in the second model. The authors explored the impact of board attributes on environmental performance and profitability in Model 3 and Model 4 to test for robustness. Therefore, EPI and ROE were used as the dependent variables in Model 3 and Model 4, respectively. In examining the impact of environmental disclosures and environmental performance on profitability, Model 6 used return on equity (ROE) as the dependent variable for the regression analysis. Finally, the authors in Model 5 investigated the impact of environmental disclosures, environmental performance, and board attributes on profitability. ROE was used as the dependent variable in the final model. The results of the multiple regression are shown in Table 8.

Table 8 Multiple regression results
Full size table

Table 8 shows all the six models in the multiple regression analysis; in Model 1, the data demonstrated a positive relationship between EADI and EPI when considering the influence of EAID on EPI. This shows that, a 0.0012 change in EPI is caused by a percentage rise in EADI. The favorable connection is significant at the 5% level. As a result, the first hypothesis has been accepted.

Regarding the second objective, the findings from Model 2 revealed an inverse and significant connection between board size and environmental disclosures. That is, a percentage change in the number of board members reflects in a 0.0352 decrease in environmental disclosure. The inverse relationship was found to be significant at the 5% significance level. Similarly, a favorable link at the 5% level was found between board meetings and disclosure of information related to the environment. This indicates that a percentage change in the number of board meetings that the board held leads to a change by 0.0632 in the rate of environmental disclosure. Hence, hypothesis 7 is accepted. Moreover, the results from Model 2 in Table 8 subsist an increase in the number of impartial directors on the board reflects in a positive change by 0.1708 in the rate of ecological disclosures for the public traded mining companies. This influenced the acceptance of hypothesis 3. In addition, annual remuneration was positively related to EADI at the 10% significance level, implying that a percentage increase in annual remuneration increases 0.0424 in the EADI. For the other board attributes, the findings revealed a favorable but insignificant link with EADI.

From the first robustness results in Model 3, where the authors explored the nexus between board attributes and ecological performance, the findings were very similar to the findings in the primary analysis. The only difference was that an inverse but insignificant relationship was found between CEOD and environmental performance. This implies that when the position of CEO and Board leader is separated, it reflects in a decrease in the environmental performance level of the public traded mining companies.

In the second robustness test, the authors investigated the impact of board attributes on the profitability of the mining firms. The results from Model 4 in Table 6 revealed a positive and statistical relationship between all the board attributes and return on equity except for board size, foreign nationals and shareholding proportion. An inverse and significant relationship was seen between board size and ROE. In addition, an inverse and insignificant relationship was found between foreign nationals on the board and profitability. This implies that a percentage increase in the number of foreign nationals on mining firms’ board decreases the level of profitability by 0.0554. Also, an affirmative but insignificant connection was found between shareholding proportion and return on equity.

To answer the last objective of the study, the authors used Model 5 to explore the impact of EADI and EPI on ROE. The findings opined a positive and significant connection between EADI and ROE. A one percent unit increase in EADI influences an increase in the profitability of the mining firm by 0.0968. The affirmative slope connection is significant at the 5% significance level. Also, a positive link was found between EPI and ROE, implying that a one percent change in EPI level leads to a 0.2646 change in ROE.

The results from Model 5 in Table 8 revealed a positive and significant association between the following; EADI and ROE at the 10% significance level, IDR and ROE at the 1% level, CEOD and ROE at the 10% level, BM and ROE at the 10% significance level, and finally, AR and ROE at the 5% significance level. This implies that a percentage change in the independent variable leads to an increase in the dependent variable by the coefficient recorded. An inverse relationship which is significant at the 5% level was found between board size and ROE. Surprisingly, foreign nationals on corporate boards revealed an inverse relationship that is not statistically significant. The other variables in Model 6 recorded a positive but insignificant relationship with the profitability of the firm proxy by ROE.

4.6 Discussion

Based on the theory of information asymmetry, when quality information relating to a firm is disclosed to all stakeholders on time, it enables the stakeholders to apprehend the disclosed information for decision purposes. We, therefore, hypothesized a positive connection between EAID and EPI in our research. The results of the multiple regression analysis backed up the study’s initial hypothesis. That is, EADI and EPI have a strong positive relationship. This implies that when quality information is made public to all stakeholders, especially ecological information, it improves the environmental performance of the mining firms. Our results align with the information asymmetry theory, which suggests that firms must disclose valid information related to their operations to enable all stakeholders to have equal information. This will help minimize the problem of information asymmetry, which inside personnel mostly use to their advantage. Our results are comparable to those of other researchers such as Gerged (2021) performance. Additionally, our findings are consistent with Agyemang et al. (2021) findings, which discovered a positive link between environmental disclosures and ecological performance for mining firms. Contrarily, our findings are different from the findings of Susanto and Meiryani (2019), who discovered a negative link between EAID and EP using a sample of 138 firms in the Eurozone from 2000 to 2017.

The board of directors has a major role in ensuring the free flow of information to all stakeholders. In a supervisory role, the directors are expected to ensure quality information disclosure and high efficiency from management. When quality information is made available, it bridges the information asymmetry gap. From this background, board attributes play a major role in ensuring effective and quality information delivery to stakeholders. Such information includes both economic and ecological preservation. Hence, the authors explored the impact of board characteristics in ensuring ecological disclosures of the mining firms.

The size of the directorate alludes to the number of directors on the organization’s top managerial staff. China’s Company Law stipulates that public chiefs ought to be in the scope of 3 to 19 individuals (Faleye et al. 2018). Smaller board size is effective in firms except for financial institution firms that require a large board size. Based on the above, the authors assumed an inverse relationship between board size and EAID. Our results were consistent with the assumption. Hence, the second hypothesis of our study was accepted. Our findings are contrary to the findings by Zia ur Rehman (2020), who used a sample of OECD countries for the period 1990 to 2016 and concluded a favorable link between the board’s size and information disclosure of financial institutions. However, the findings are similar to Salehi et al. (2018), who suggested that non-financial institutions have an inverse connection between board size and accounting disclosures.

In addition, the extent of outside directors on the top managerial staff also exhibits the board’s impartiality. Since inside directors’ control does not directly influence outside directors, they are unbiased and play out their administrative jobs viably. In this manner, they are working with the independent judgment of the top managerial staff on business undertakings. As a principle of good governance, the board of directors has essential duties of promoting companies’ growth and stability. To ensure the effective discharge of such responsibilities, the board of directors is expected to be dominated by more outside directors who do not participate in the business’s day-to-day running. The findings from our studies affirm the positive association between independent directors and environmental disclosures. Hence, hypothesis three was accepted. Our results are similar to the findings by (Fuzi et al. 2016; Rashid, 2018; Uribe-Bohorquez et al. 2018), disclosure of firms. Similarly, our results align with Gerged et al. (2021a) study, which showed that a higher proportion of outside directors had less earnings management oversight and a high level of information disclosures. However, our results are contrary to the findings by Liu and Zhang, (2017), who concluded that independent directors on corporate boards have no link with quality information disclosures using a sample of 218 firms listed in India from 2000 to 2015.

CEO duality is shown to prevent one individual from occupying the position of CEO and board chairmanship simultaneously. On the off chance, when that one individual occupies the two offices, the autonomy of the organization cannot be well addressed. Therefore, one individual should not involve the two positions to guarantee high independence. This will prevent the shielding of information, especially adverse information, been released to stakeholders. Hence, to ensure smooth delivery of quality information to the public and stakeholders, there is the need to separate the position of the CEO from the board chairperson. Based on the above, the authors anticipated a positive connection between the separation of the two positions and EAID. Our findings revealed an affirmative but insignificant link between the two. Hence, we rejected the fourth hypothesis. Our findings were inconsistent with Faleye et al. (2018), who opined that the parting of the board chairmanship position from the CEO position ensures effective accountability and voluntary information disclosure. Instead, our findings support the findings by Osei et al. (2019a), who concluded that one person could occupy the two positions without covering valuable information to the stakeholders, especially when the independent directors are more than the inside directors.

Diversity attributes primarily ponder the sex, age range, and nationality. Gender variety on a firm’s board is largely known as the extent of female directors on board. Agyemang et al. (2020) suggest that female directors influence social obligation disclosures, including ecological reporting. A more diversified board promotes a free flow of information and objective criticism, which in the long run promotes the effectiveness of the board in their support role. That is, to prevent the asymmetry of essential information to the stakeholders, a high level of diversification where gender representation and foreign nationals are well presented promotes the level of information disclosure. Therefore, the authors hypothesized a positive relationship between gender diversity and ecological disclosures for publicly traded mining businesses. Surprisingly, our results revealed a positive but insignificant relationship. Therefore, our fifth hypothesis was rejected. Our findings were inconsistent with Fuente et al. (2017), who found a positive connection between gender diversity and voluntary disclosures of information. However, our findings are similar to the findings by Buallay et al. (2022), who contended that female directors on the board do not play any significant role in influencing quality information disclosure, including ecological information.

To add to the above, several governance principles encourage the directorate to be from different nationalities to represent their customers, employees and stakeholders’ identities (Salehi & Zimon, 2021; Salehi et al. 2018). This helps in ensuring that all stakeholders are attended to when it comes to information disclosure, including environmental accounting information. This, in the long run, will reduce the information asymmetry problem. The authors, therefore, assumed a positive relationship between foreign nationals on the board and environmental accounting disclosures. However, our findings revealed a positive but insignificant relationship between the two, leading to the rejection of the sixth hypothesis. The findings from our study are similar to the findings by Iredele (2019), who revealed that there is no connection between foreign nationals and information disclosure for pharmaceutical firms in China. However, our findings are contrary to Gerged (2021) findings, who opined that the variety of the board individuals brings diverse attitudes that, when collected, reflect in high productivity and information disclosures.

Board meeting incorporates the number of yearly gatherings and the participation pace of the gathering. The frequency of board meetings as part of good governance improves the communication and efficiency of companies. To enable the firm to disclose more information to bridge the gap between insider and outside personnel, the frequency of board meetings is essential for minimizing information asymmetry challenges. The more board meetings are held, the more confidential information is being disclosed. The authors, therefore, assumed a positive relationship between board meetings and EAID. The findings are in line with our hypothesis. As the number of board meetings increases, it increases the firm’s information disclosure, affirming that board meeting frequency plays a role in solving information asymmetry challenges by firms. Therefore, hypothesis seven is accepted. Our findings align with the findings from Husted & de Sousa-Filho, 2018. Similarly, our findings support Oh et al. (2019), who found that the number of executive gatherings and the nature of data divulgence are fundamentally positively related. Contrarily, our findings are in opposition to the conclusion by Pavlopoulos et al. (2019), who found that there was no relationship between the frequency of annual board meetings and accounting fraud.

The incentive attribute component refers to the situation with the organization’s motivating force system for directors, including yearly compensation and shareholding extents, rewards, investment opportunities, benefits plans, and so forth. An increase in the annual remuneration of board members for mining companies increases environmental disclosures. Therefore, hypothesis eight is accepted. Surprisingly, when board members are made part owners of the companies by shareholding proportion as an incentive package to ensure the board’s effectiveness, it results in a decrease in the EAID of the firm. Hence, hypothesis nine was rejected. Our findings are similar to Jizi (2017) findings, who proposed that directors’ incentives fundamentally influence an organization’s performance and information disclosures. Contrarily, our findings do not support the findings by Ludwig and Sassen (2022), who opined that there is no link between shareholding ratio and quality information disclosures for listed firms in the Eurozone.

The positive slope connection between EAID and ROE and EPI and ROE demonstrates that when quality and timely information relating to the ecological issues of firms is disclosed to the public, it minimizes the level of information asymmetry of business and, in the long run, improves the profitability and ecological performance of the firms. Firms that disclose more gain goodwill and competitive advantage and hence influence the level of patronage of their products. In addition, such firms do not incur fines and penalties from the government for disclosing quality and timely ecological information. Rather, they enjoy tax incentives and other credit facilities that boost their profit margin. As a result, hypotheses 10 and 11 are accepted. That is, EAID influences ROE, as well as EAID has a positive connection with ROE. Our results are similar to the findings by Shah et al. (2021), who concluded that ecological performance assists a firm with drawing in and retaining employees and improves representative assurance and, consequently, profitability. Contrarily, our findings are different from the findings by Ding et al. (2022), who found no connection between environmental disclosure and profitability of firms, whereas Kongkuah et al. (2021a) found an inverse relationship between the two using a sample of 91 firms from West Africa.

5 Conclusion and policy implications

5.1 Conclusion

From the background of information asymmetry theory, environmental information disclosure of businesses is an essential component for businesses to disclose their ecological and economic impact to stakeholders. Ecological divulgence is influenced by corporate governance mechanisms such as board composition, company policies on environmental performance, and firm financial performance. Earlier studies have revealed a study vacuum in China when analyzing environmental accounting information disclosure for a certain sector like the mining sector.

Using a sample of fifty-one out of the sixty-six companies in the mining sector, the authors utilized secondary data from 2000 to 2020. The authors used the CCEMG estimation because it deals with possible cross-sectional dependencies, heteroscedasticity, serial correlation, and endogeneity, thereby freeing the results from these issues.

The findings revealed a positive slope link between EAID and ecological performance. Regarding board attributes, outside directors, board meetings frequency, and the annual remuneration revealed an affirmative connection with EAID. In addition, board size was found to have an inverse connection with EAID. The other board attributes revealed a positive but insignificant relationship with EAID. Moreover, the findings posit that both EADI and EPI have a positive slope relationship with the profitability of the mining firms.

Based on the findings, it is recommended that mining companies’ board size be pegged at a moderate number to ensure high information disclosure to all stakeholders. In addition, the board’s independence is crucial in ensuring transparency and information disclosure. Hence, the number of independent directors on the board should be more than the number of dependent directors. Also, the CEO and board chairmanship position should be separated to avoid conflict of interest and divulgence of essential information disclosure. Since gender diversity and foreign nationals on the board did not reveal a significant impact on information disclosure in the mining sector, it is recommended that much emphasis should not be placed on getting females and foreign nationals in the board room of the mining companies since their presence do not contribute so much to information disclosure. Furthermore, it is recommended that the board should hold regular meetings to enable high information disclosure, which eventually promotes environmental performance. Lastly, shareholders should focus on annual remuneration instead of the shareholding proportion of shareholders since the shareholding proportion does not impact high information disclosure.

5.2 Policy implication and contribution

The results of this study are helpful to policymakers, governments, academics, and other stakeholders. These findings offer a detailed understanding for stakeholders. The proposed indexes for measuring environmental disclosure and performance have never been used in any study before. Policymakers can base on the proposed indexes and develop a standardized EAID and EPI for the various industries within the Chinese economy. This will further help advance the green production strategy of the Chinese government.

The findings from the study support some aspect of good corporate governance principle. With the exception of diversity attributes, the findings revealed that a moderate board, separation of the CEO position from the board chairman, high proportion of independent directors, regular board meetings, and incentives to board members influence quality ecological divulgence by mining companies. As the results are in line with good corporate governance mechanisms, other sectors of the Chinese economy and other developing economies can take clue and enhance good corporate governance systems in their companies.

The findings from the study can be extended to other mining industries in other countries to provide policymakers on how firms provide quality EAID on time. This will enable all stakeholders to have the needed information for decision-making purposes.

The positive slope connection that exists between EADI and EPI affirms that compliance with ecological disclosure improves the environmental performance in the long run. Therefore, the Chinese Ministry of Ecological Protection should put in more measures to ensure quality disclosure and compliance with environmental protection for all companies and institutions. The enforcement of the disclosure requirement will improve China’s ecological performance and contribute to the Chinese government of climate protection while promoting economic activities.

5.3 Limitation and future studies

There is no standardized way of measuring EAID and EPI for listed companies in China. The authors based on the regulatory requirement of listed companies and the industry-specific factors to come out with an index. The themes and items under the themes are purely subjective and were limited to only items that can be measured. Future studies can develop a standard EADI and EPI for listed companies so that the measurement will now be standardized and not subjective. Moreover, future studies can conduct empirical studies using the standardized measurement for EADI and EPI to explore the nexus among EADI, EPI and firm performance.