Moving from the ongoing debate on the benefits of mandating environmental reporting, this paper provides an analysis of the role of narrative information quality in enhancing environmental reporting, considering the moderating effect of firm‐level and country‐level incentives. We examine an international sample of listed firms belonging to an environmental‐sensitive industry and construct disclosure indices based on a content analysis of the company's reporting. Results reveal that mandatory narrative information quality is positively associated with the quality of environmental reporting displaying a credibility effect beyond earnings quality. Country‐level factors that increase the demand for environmental information weaken this relation by reducing the marginal benefit of disclosing environmental information. Our approach advances existing literature on the link between CSR and financial reporting and highlights the unintended consequences of mandating environmental reporting.

中文翻译：

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加强环境报告：关于叙述性披露、公司和国家层面激励措施的作用的研究

本文从关于强制环境报告的好处的持续争论出发，分析了叙述性信息质量在加强环境报告方面的作用，并考虑了公司层面和国家层面激励措施的调节作用。我们研究了属于环境敏感行业的上市公司的国际样本，并根据公司报告的内容分析构建了披露指数。结果表明，强制性叙述信息质量与环境报告的质量呈正相关，显示出超越盈利质量的可信度效应。增加环境信息需求的国家层面因素会降低披露环境信息的边际效益，从而削弱这种关系。我们的方法推进了关于企业社会责任和财务报告之间联系的现有文献，并强调了强制环境报告的意外后果。