Disclosure of Corporate Environmental Policies in Annual Reports: Further Evidence Incorporating a National Ideology–An Australian Study

Abstract

ABSTRACT During the last decade, there has been a growing awareness at a community level and, more recently, at a business level of a changing emphasis on the disclosure of environmental performance by Australian public companies. Over the last few years, many studies have been undertaken which have examined the disclosure of environmental information by analyzing public company Annual Reports in Australia. Previously, public companies preferred to prepare Corporate Environmental Policy (CEP) statements for internal use only rather than for external reporting (Tilt, 1997, 2001). However, now these reports appear in the annual reports of Australian public companies. Using content analysis, this study examines a sample of public companies listed on the ASX (Australian Stock Exchange) in 2000 and the reporting nexus between these companies' CEPs and their Annual Reports. The results show that environmentally sensitive companies are disclosing more environmental information than other companies. Emerging from these results, our study shows that companies involved in the survey adopted some disclosure on environmental issues based on the ideological belief in such environmental issues. There are currently only limited requirements for any formal identification or reporting with regard to environmental assets, liabilities or contingencies in Australia. Our research has shown that environmentally sensitive companies provided a significantly greater amount of voluntary positive environmental disclosures than the non-sensitive companies. Based on the results of our research it is fair to say that there is an ideological belief within the Australian public companies and the Accounting profession on environmental reporting issues.