The Influence of Environmental Disclosure on Capital Structure of Brazilian Companies listed on the BM&FBovespa

The objective of this study to verify the relationship between environmental disclosure and the capital structure of companies classified according to Law 10165 which provides for the National Environmental Policy for the period 2006 to 2010. To meet the proposed objectives were used as proxies for capital structure debt to verify the cost of debt and to verify the CAPM cost of equity. To measure the level of environmental disclosure content analysis was carried out in the notes, the management report and the report of the environmental information contained in the report of the Annual Information (IAN). We analyzed 89 companies with 95,020 sentences, and 5279 relating to environmental events, such 4819 relating to environmental information regarding positive and 460 negative environmental information. To investigate the relationship between these variables was used in the analysis panel with random effects adjusted by robust tool. The findings of this study demonstrate that environmental disclosure does not affect the cost of debt, ie, in the Brazilian market, the environmental information whether positive or negative does not drive the market to influence positively / negatively the cost of debt. However, the results showed that the positive environmental disclosure adversely affects the cost of equity demonstrating that "good environmental image of the company" leverage the company's credibility this crucial factor in reducing the risk of the company since the engagement with sustainability and generate savings for the effective and efficient use of resources eliminates and / or reduces the incidence of government regulations.