Abstract
This study examines the impact of environmental reporting on the financial performance of Fortune 500 firms from 2013 to 2017. It appraises financial performance by measuring three independent variables: reduction in greenhouse gas emissions, reduction in waste, and reduction in water consumption. While the target population comprised the top 100 CSR-reputed companies listed on Fortune 500, the sample size was determined to be 50 based on observations of 250 companies. The collected data were analyzed using descriptive statistics, correlation, and regression analysis. Findings indicated that reduction in nominated variables such as greenhouse gas emissions and water consumption had a positive and significant impact on financial performance, whereas that in another variable, i.e., waste, had a negative and significant impact on financial performance. Thereby, this study recommends that firms should adopt environment-friendly resources to attract stakeholders as well as save the planet. It also suggests that firms need to accord dedicated focus to environmental reporting to improve profitability.
Highlights
At present, as much society started to become knowledgeable and concerned towards the environment that they reside in as business started involving with the economy (Gray, 2010; Bachev, 2018; Halimah & Rahmawati, 2019)
The multinational organisation should involve in very many environmental or sustainability activities as this kind of events improve and increase the customer base that will eventually escalate the number of profits, thence firm's financial performance improves
The positive relationship between environmental reporting and financial performance recommends that global companies' managers can use the environmental reporting to enhance the customer trust, lessen reputational risks, and as such create long term shareholder value
Summary
As much society started to become knowledgeable and concerned towards the environment that they reside in as business started involving with the economy (Gray, 2010; Bachev, 2018; Halimah & Rahmawati, 2019). For the latest couple of years, organization start to develop the sustainability or environmental report with a detail of the organization's impacts upon environment and process by which impact is monitored and measured (Tasneem et al, 2016; Lestari et al, 2019). It is been a difficult yet interesting issue to conduct a study as recently environmental reporting (ER) is becoming popular by organizations. In Japan, electronic sector (Cortez & Cudia, 2010), and United Kingdom's oil and gas, industrial consumer goods, health care, basic material, telecommunication and technology and consumer services sectors (Kijewska & Bluszcz, 2016)
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