Abstract:
Valuation of listed companies in the Nairobi Securities Exchange (NSE) has been found to be
unpredictable as market-to-book values disclose huge variations. Corporate disclosures have
been linked to firm value by prior studies. However, assessment of non-financial information
disclosures with financial information in an integrated reporting context has not been explored
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International Journal of Economics, Commerce and Management, United Kingdom
fully. Further, owing to the reported mixed results in other settings, this comparative study aimed
at evaluating the effect of environmental capital disclosure on value of listed companies in
Kenya and South Africa, by interrogating the role of company business model. 137 companies
were sampled from a population of 209 companies constituting 19 and 118 companies listed on
Kenya and South Africa securities exchanges respectively. A 3-year period 2018-2020 was
covered by the study. Ingrained on the stakeholder and legitimacy theories, the study applied
both exploratory and confirmatory research design. Secondary data sources encompassing
audited annual integrated reports and financial statements were used. Data analysis methods
composed of descriptive statistics, correlation and step-wise regression analysis technique. The
study demonstrated that environmental capital disclosure positively and significantly influences
firm value in both countries. Further, environmental capital disclosure and firm value is mediated
by the business model. However, inconsistent and partial mediation was reported for Kenya and
South African data respectively. The study recommends continued disclosures related to
environmental capital due to its positive influence on firm value. Further, while adopting non
financial disclosures, entity business model should be considered since it provides a framework
through which non-financial resources affect firm value.
