Abstract
We examine the impact of various factors on the quality of environmental disclosure. Combining multi-theories in a unique framework, it focuses on factors related to the strategy and vision of the firm (environmental audit, presence of an environmental committee), diversity of and within boards (independence of the board, gender diversity) and factors related to the environment (environmental performance, degree of pollution of the company). This study involves an attempt to develop a self-constructed index to measure environmental disclosure quality using qualitative attributes as provided by IASB and GRI frameworks and following (Chauvey et al. in J Bus Ethics, 130(4):789–803, 2014). A number of econometric techniques are used including panel data specifications using a sample of French listed companies in SBF120 for the period 2009–2014. The study found that quality of disclosure remains relatively low. In addition, the findings indicate that a company’s strategy and vision (environmental audit), diversity in boards (gender diversity) and environmental performance play significant roles in explaining variations in quality of environmental disclosure. This paper sheds light on whether various factors could affect the credibility of disclosed information using a multi theory framework. Standards setters and policy makers are recommended to think about implementing a generally accepted framework of non-financial reporting to answer the demand for more transparency and accountability. This paper fills the gap in the literature by highlighting an unexplored area of literature related to the quality of non-financial reporting drawing upon the regulatory framework of financial reporting.
Highlights
Over the last few years, researchers have attempted to study the motivations behind disclosing non-financial information in different contexts
In the context of current research, Monjarret (2014) notes that verification of social and environmental information in the French context is considered to be a response to normative pressures exercised by the Grenelle Act II which constitutes the process from which public authorities attempt to regulate CSR practices
Environmental audit is implemented in France in order to monitor compliance with new laws and regulations related to non-financial disclosure
Summary
Over the last few years, researchers have attempted to study the motivations behind disclosing non-financial information in different contexts. Prior research fails to provide an accurate measure of environmental disclosure quality due to the lack of convincing theoretical underpinning and the subjectivity that surround the developed proxies. To fill this gap, we focus on the quality of environmental disclosure and factors that may influence such reporting. Relying on a multiple theory framework: stakeholders theory, neo institutional theory, resource dependence theory and human capital theory, for the study’s basic sample group, we selected French publicly listed companies in the SBF 120 index for the period 2009–2014 This based on multi-theoretical framework because environmental reporting is a complex phenomenon that cannot be explained by a single theory (Tagesson et al 2009). The final section offers a discussion of our findings and makes concluding comments
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