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Abstract

This study examined the influence of institutional isomorphism on environmental disclosure (ED) in Tanzania’s construction sector and the mediating role of top management commitment (TMC). A cross-sectional design was employed, with data collected from 314 construction firms. Environmental disclosure was measured using content analysis of financial reports, and Structural Equation Modelling using the Maximum Likelihood Estimation (MLE) method was used to estimate the structural model. The findings reveal that coercive, normative, and mimetic pressures significantly impact ED. The result also indicates that TMC significantly affects ED and mediates mimetic pressure’s effect, but does not mediate coercive or normative pressures. Similarly, mimetic pressure has a significant influence on TMC.

The study concludes that coercive, normative, and mimetic isomorphism significantly drive firms’ environmental disclosure, with TMC playing a role in mediating the influence of mimetic pressures. Theoretically, the study contributes to Institutional Theory by demonstrating how human agency, through TMC, mediates the influence of institutional pressures into disclosure practices. This highlights the importance of managerial commitment in shaping firms’ responses to external pressures, particularly in emerging economy contexts. The findings offer insights for regulators, managers and policymakers in Tanzania to promote environmental disclosure by establishing standards that guide disclosure. Top managers utilise these findings to enhance their managerial commitment to environmental disclosure by aligning with industry benchmarks.

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