Block ownership as a moderator in the relationship between environmental risk disclosures and environmental reporting transparency in Sub Saharan Africa

Abstract

Environmental reporting transparency has gained increasing importance in corporate sustainability discussions, especially as firms face growing pressure from investors, regulators, and civil society to justify their environmental practices. This study investigates the moderating role of block ownership in the relationship between environmental risk disclosures and corporate environmental transparency among non-financial firms in Sub-Saharan Africa (SSA), where reporting remains largely voluntary. Using panel data from 239 firms across six SSA countries between 2012 and 2021, we constructed a composite Environmental Disclosure Index (EDI)—reflecting corporate environmental transparency—based on Global Reporting Initiative (GRI) indicators. We applied both Fixed Effects (FE) and two-step System Generalized Method of Moments (System GMM) estimators to control for endogeneity, unobserved heterogeneity, and dynamic effects. Results indicate that disclosures related to carbon emissions, water use, occupational hazards, and regulatory compliance significantly enhance transparency. Moreover, block ownership moderates these relationships in both reinforcing and constraining ways, depending on the underlying disclosure level. These findings suggest that concentrated ownership can influence sustainability governance in contexts with weak regulatory enforcement. This study contributes to the literature by linking ownership structure to environmental reporting quality in emerging economies, and it offers practical insights for regulators, shareholders, and corporate leaders. Limitations and avenues for future research are discussed.