Environmental Disclosure In Annual Reports Research Articles

Social and Environment Disclosure in Indonesia: Does the Ownership matter?

Research aims: This study aims to analyze the effect of ownership structure on social and environmental disclosure in annual reports of companies in Indonesia.Design/Methodology/Approach: This study uses 208 panel data from 52 companies in the plantation and agriculture, mining, and real estate and building construction sectors. The dependent variable in this study was obtained by analyzing the content of the company's annual report. The hypothesis in this study was tested with multiple linear regression.Research findings: The results of the regression test show that institutional ownership and managerial ownership have an effect on social and environmental disclosure, while multiple share ownership (MLSS) is found to have no effect on social and environmental disclosure.Theoretical contribution/ Originality: This study enrich the literature about social and environment disclosure with new approach named SEDI. In addition, This research contributes to the scrutiny about the effect of dual ownership structure (MLSS) on social and environmental disclosure, especially in the Indonesian context. This study provides empirical evidence on the influence of ownership structure on social and environmental disclosure. Research limitation/Implication: This research is only limited to companies that have a lot of contact with social and environmental, namely mining, agriculture and real estate and building construction. Meanwhile, other companies are expected to be scrutinized in future research.

The Level of Environmental Disclosures in Annual Reports and Firm -specific attributes of Sri Lankan Listed Companies

The Level of Environmental Disclosures in Annual Reports and Firm -specific attributes of Sri Lankan Listed Companies

Environmental Disclosure and Financial Performance of Firms in Kenya: A Stakeholder Approach

Using panel data analysis this study examined the influence of environmental disclosure in annual reports on financial performance of companies listed on the Nairobi Securities Exchange in Kenya. Environmental disclosure information was collected using quantitative content analysis for the period 2007–2015 while financial performance data was collected for the period 2008–2016, a one-year lag behind the environmental disclosure data. Control variables were firm size, industry type and leverage. Environmental disclosure was found to be statistically significantly positively related to the firms’ return on assets but not statistically significant with return on equity and Tobin’s Q. The overall results suggest that disclosing environmental activities neither improves financial performance nor deteriorates it. Keywords: Environmental disclosure; Financial performance; Developing country; Kenya; Panel data DOI: 10.7176/RJFA/11-14-07 Publication date: July 31 st 2020

The relationships between reporting format, environmental disclosure and environmental performance

PurposeThe purpose of this paper is to assess whether European companies issue standalone environmental reports in an attempt to gain and maintain legitimacy with relevant stakeholders. This is achieved by creating and empirically testing a model of the relationships between corporate reporting format, industry membership, environmental disclosure, and environmental performance.Design/methodology/approachData are collected from 100 large European companies in carbon and non-carbon-intensive industries. Hypothesis testing is conducted via structure equation modeling.FindingsEvidence exists that companies which disclose environmental information in standalone environmental reports tend to provide higher levels of environmental information than companies which combine financial and environmental disclosure in annual reports. The findings support greenwashing as a new perspective of legitimacy theory: companies in carbon-intensive industry use standalone environmental reports to pose as good corporate citizens even when they are not.Research limitations/implicationsThe sample companies are large European companies and this could limit the generalizability of research findings. The authors call for longitudinal studies examining how the relationship between reporting format and environmental disclosure changes.Practical implicationsThis paper suggests that reporting format be considered a proactive, strategic communication-driven activity rather than a decision that managers passively make in response to external scrutiny.Originality/valueThe paper contributes to the literature by adding to the scarce evidence of the relationship between reporting format and environmental disclosure. Greenwashing as a new perspective of legitimacy theory is used to develop research hypotheses.

The Relationship Between Board Characteristics and Environmental Disclosure: Evidence from Turkish Listed Companies

AbstractThis study primarily aims to analyze the relationship between selected board characteristics and the extent of environmental disclosure in annual reports of Turkish companies, using a sample of 62 non-financial firms listed on the BIST-100 index at the end of 2011. The content analysis is used to measure the extent of environmental disclosure. Four board characteristics, namely board size, board independence, board gender diversity and audit committee independence, are considered as the independent variables that may have an impact on the extent of the environmental disclosures of Turkish companies. According to the results of the regression analysis, only board size has a statistically significant and positive relationship with the extent of environmental disclosure. This result implies that firms with larger boards disclose more environmental information than firms with smaller boards. On the other hand, the rest of the independent variables are found to be unrelated to the extent of environmental disclosure. The low degree of independence and gender diversity on the boards of the sample companies for the time period analyzed in the study could be one possible explanation for this result.

Environmental disclosure quality: examining the impact of the stock exchange of Malaysia’s listing requirements

Purpose – The purpose of this study is to investigate the environmental disclosure (ED) quality of public-listed companies (PLCs) in environmentally sensitive industries (ESI) in Malaysia in 2005 and 2009 (two years before and two years after the mandatory corporate social responsibility (CSR) requirement of Bursa Malaysia (BM)). BM (The Stock Exchange of Malaysia) has made CSR, including ED in annual reports mandatory since 2007. This study compares environmental reporting (ER) before and after the 2007 mandatory reporting requirement to determine if this command and control mechanism has had any effect on the quality of ED. Design/methodology/approach – The quality of ED was measured using a disclosure quality index adapted from various prior studies. The index consists of a total of 46 disclosure items grouped into 9 categories. Content analysis was utilized to extract data from the annual reports of 164 PLCs in ESI. Findings – Overall, the quality of ED improved in 2009 from that of 2005. More importantly, companies disclosed more quantitative environmental information in 2009 than in 2005. However, the average quality of ED was still low in 2009 compared to the overall potential score. Results provide some support for legitimacy as well as institutional theories. Research limitations/implications – The sample of the study consisted of listed companies in ESI only; the results cannot be generalized to other companies in non-environmentally sensitive sectors. Practical implications – Prior studies that used data before the mandatory CSR requirement by BM found ED in annual reports mainly declarative in nature, generally low on quality and with little quantifiable data. The results of the present study provide evidence of the positive impact of mandatory environmental reporting on ED quality. Originality/value – The use of a multi-theoretical perspective may offer a more meaningful explanation of ER behavior in Malaysia. The results of the study would provide the impetus for regulatory agencies in developing countries to perhaps consider legislating ER. The findings provide some evidence to support the influence of legitimacy and institutional factors behind improved ED of Malaysian PLCs. This outcome exhibits a positive influence on the government efforts in promoting sustainability. Finally, the study contributes to present a more up-to-date account of environmental commitment undertaken by Malaysian corporations through their environmental reporting, after the CSR mandatory listing requirement took effect in 2007.

Determinants of environmental disclosure in annual reports of Sri Lankan listed manufacturing companies

The aim of this study is to investigate the level of corporate environmental information disclosure practices of listed manufacturing companies in Sri Lanka. The study also examined the influence of firm size, profitability and listing age on the level of corporate environmental information disclosure. To achieve the aims of this study, content analysis and statistical analysis were used. Content analysis by word count is used to determine the level of social and environmental disclosures on annual reports of Sri Lankan listed manufacturing companies. To determine the factors that explain the level of social and environmental information disclosures, descriptive statistics, correlation analysis and multiple regressions analysis were used. The finding indicates that 50.63% of the companies provided corporate environmental information in their 2012/2013 annual reports. Multiple regression analysis revealed that size of the firm had significant positive relationship with the level of corporate environmental information disclosure. However, corporate environmental disclosure has not been influenced by the profitability and listing age.

Empirical investigations on boards, business characteristics, human capital and environmental reporting

Purpose – The objectives of this paper are to examine the level of environmental disclosure in annual reports made by Malaysian public listed companies for the year ended 2009, and to investigate whether there are any relationships between board characteristics (board size and board independence), firm characteristics (business type) and human capital characteristics (age, knowledge background and proportion of female directors) and environmental disclosure in Malaysian public listed companies' annual reports for the year ended 2009. Design/methodology/approach – The study constructs the environmental disclosure index with 11 disclosure themes based on research by Sharifah et al. to determine the environmental disclosure level. The study uses content analysis to find the environmental disclosure items and constructs an environmental disclosure index from the companies' annual reports. Hierarchical regression analysis is used to examine the relationships between the environmental disclosure index and board characteristics (board size and board independence), firm characteristics (business type) and human capital characteristics (age, knowledge background and proportion of female directors). Findings – The results of the study reveal that there is a significant relationship between the existence of an independent non-executive chairman, the chairperson's age, the existence of a CEO with a law background and the industry type with the extent of environmental disclosure. The industry type is found to be the most significant variable that influences the level of environmental disclosure in Malaysian public listed companies for the year ended 2009. Research limitations/implications – The findings are limited to Malaysian public listed companies for the year January to December 2009. The source of the data used in this study is companies' annual reports only. This study has several implications that may apply in many countries, irrespective of whether they are developing or developed countries. First, it provides strong evidence to show that boards of directors and human capital are significant variables in the extent of disclosure. Second, it is useful to managers, especially to boards of directors in Malaysia, in identifying board characteristics and human capital characteristics that could improve companies' environmental activities; these could be disclosed in the interest of stakeholders and the public's environmental concern. Third, this study can also be used as an initial step for companies in to be involved in environmental activities. Prior studies have proved that these activities could enhance companies' image and reputation and could offer financial benefits to the business. Originality/value – The study extends the previous studies by the inclusion of human capital characteristics as a factor that influences environmental reporting in Malaysia. This study has demonstrated that to mitigate the agency problems between firms and shareholders, society and stakeholders, and particularly environmental impact, the inclusion of human capital characteristics as an indicator may help to reduce expected costs and negative impacts on firm value, and may also demonstrate to society and the company's stakeholders that individual firms are doing their part to help solve society's social and environmental problems through additional disclosures.

Shareholder Requirements for Compulsory Environmental Information in Annual Reports and on Websites

Growing general concern regarding the natural environment may cause shareholders to require more accountability for environmental issues from the companies in which they invest. We do a survey of shareholders in three major Anglophone countries (Australia, the United Kingdom, and the United States) to determine whether they require compulsory environmental disclosure and where they would prefer companies to disclose such information. In all three countries, shareholders prefer compulsory environmental disclosure in annual reports (preferably in a separate section addressing the issue), as well as disclosure on websites, whereas separate environmental reports are less popular as a disclosure medium. Overall, legislation is preferred as a method to mandate environmental disclosure, with accounting standards more popular among American shareholders. The implication is that regulators may have to reconsider their current stance regarding corporate environmental disclosure.

Where firms choose to disclose voluntary environmental information

Corporate environmental performance is of increasing importance to investors, public policy makers and the general public. Firms disclose environmental information (mostly) voluntarily in their annual reports and on their websites. These disclosures are important, because they provide environmental performance information and influence capital markets. We compare environmental disclosure in annual reports and on websites with a long-term (bad) and a short-term (crisis) environmental performance measure. We find evidence to support our hypotheses that different levels of environmental disclosure are made in annual reports and on websites under different conditions. More specifically, firms disclose more environmental information on their websites when faced with an environmental crisis and more in their annual reports when they have a bad environmental reputation.

Determinants of environmental disclosure in the annual reports of large companies operating in Portugal

AbstractSimilarly to what has happened in other countries, since the early 1990s Portuguese companies have developed corporate environmental reporting practices in response to internal and external factors. This paper is based on empirical research directed to both the study of environmental reporting practices developed by Portuguese companies and the identification of the factors that explain the extent to which these companies disclose environmental information. This study focuses on the environmental disclosures made in the annual reports by a sample of 109 large firms operating in Portugal during the period 2002–04. Using the content analysis technique we have developed an index in order to assess the presence of the environmental disclosures in companies' annual reports and their breadth. Based on the extant literature, several characteristics relating to firms' attributes were selected and their influence on the level of environmental disclosure was tested empirically. The selected explanatory variables were firm size, industry membership, profitability, foreign ownership, quotation on the stock market and environmental certification. The results reveal that, in spite of the fact that the level of environmental information disclosed during the period 2002–04 is low, the extent of environmental disclosure has increased as well as the number of Portuguese companies that disclose environmental information. Moreover, the firm size and the fact that a company is listed on the stock market are positively related to the extent of environmental disclosure. This study adds to the international research on environmental disclosure by providing empirical data from a country, Portugal, where empirical evidence is still relatively unknown, extending the scope of the current understanding of the environmental reporting practices. Copyright © 2009 John Wiley & Sons, Ltd and ERP Environment.

Le reporting social et environnemental suite à l'application de la loi NRE en France

Résumé Ce papier analyse les pratiques de reporting social et environnemental par les sociétés cotées en France suite à l’application de la loi sur les Nouvelles Régulations Économiques. L’analyse a fait la distinction entre les informations sociales et environnementales obligatoires exigées par cette nouvelle loi et les informations sociales et environnementales publiées de façon volontaire dans les rapports annuels des sociétés cotées au CAC40 de 2002 à 2005. Nos résultats indiquent que ces informations sont plutôt qualitatives, les informations quantitatives sont en majorité de type non financier. Nous avons conclu également que certaines informations sociales et environnementales obligatoires ont été négligées par les sociétés qui ont divulgué particulièrement sur des sujets se rapportant à l’impact de leurs activités sur l’environnement naturel et les ressources humaines.

Some determinants of social and environmental disclosures in annual reports by French firms

Some determinants of social and environmental disclosures in annual reports by French firms

Determinates of Environmental Disclosures in Annual Reports of Thai Companies

Determinates of Environmental Disclosures in Annual Reports of Thai Companies

Media legitimacy and corporate environmental communication

Using a direct measure of environmental legitimacy, we explore the impact of annual report environmental disclosures and environmental press releases as legitimation tools. The sample comprises North American firms (Canada and the United States). The results obtained show that environmental legitimacy is significantly and positively affected by the quality of the economic-based segments of annual report environmental disclosures and by reactive environmental press releases, but not by proactive press releases. Moreover, our results suggest that negative media legitimacy is a driver of environmental press releases but not of annual report environmental disclosures.

Environmental disclosure and performance reporting in Malaysia

PurposeThe purpose of this paper is to examine the extent to which the environmental disclosures in annual reports of companies listed on the Kuala Lumpur Stock Exchange are associated with corporate characteristics.Design/methodology/approachA rating system for environmental disclosures was developed, based on a review of previous studies, embracing industry membership, financial performance, share price fluctuations, political cost proxies, dependence on debt and the capital market.FindingsThe findings suggested that environmental disclosure is negatively associated with company financial performance. A significant inverse relationship between disclosure score and return on assets is apparent, suggesting that environmental disclosure in Malaysia has different priorities from disclosures elsewhere.Originality/valueThis study is the first of its kind to be conducted in Malaysia, and its empirical findings complement the expectations of prior studies.

Voluntary Environmental Reporting Practices: A Further Study of 'Poor' Environmental Performers

We investigate the relationship between 'poor' environmental performance and voluntary environmental disclosures in annual reports of Australian listed companies. 'Poor' environmental performance is defined as those instances where companies have been subject to a successful Environmental Protection Agency (EPA) prosecution at any time between 1994 and 1998. This area of research is important as the Parliamentary Joint Statutory Committee for Corporations and Securities (PJSC) recently concluded that a voluntary system of environmental disclosure would encourage 'better' companies to achieve 'best practice' in this area. Consequently this study investigates what disclosure is in fact made in the period leading up to the mandatory requirements. Results reveal that violating firms' annual reports are limited to copious amounts of positive environmental disclosures of a general nature, with virtually no disclosure about the actual EPA violations. We conclude there has been no improvement in environmental disclosures since the previous study of Deegan and Rankin (1996). Accordingly, it is unlikely that voluntary environmental reporting creates a situation of adequate and appropriate disclosure for poor environmental performers let alone encouraging 'better' firms to achieve 'best practice'.

DO CORPORATIONS PERCEIVE MANDATORY PUBLICATION OF POLLUTION INFORMATION FOR KEY STAKEHOLDERS AS A LEGITIMACY THREAT?

In recent decades several researchers have investigated the relationship between corporate environmental performance and environmental disclosures. A number of these studies have also investigated the positive/negative content of the disclosures, particularly following the occurrence of negative environmental events or media coverage. Limited research has investigated the usefulness of regulated public external disclosures of corporate environmental performance information as a driver of annual report environmental disclosure behaviour. The mandatory Australian National Pollutant Inventory now provides interested parties with access to information on corporate pollution emissions. This represents a change to the corporate operating environment and represents a potential threat to corporate legitimacy. This paper reports the results of research investigating the release of corporate pollution emission information on the National Pollutant Inventory and changes in corporate environmental disclosures in annual reports.

Application of Stakeholder Theory to the Quantity and Quality of Australian Voluntary Corporate Environmental Disclosures

This study provides a comprehensive, integrated theory for explaining social responsibility disclosures. The relevant theory applied is Ullmann's (1985) three dimensional model of social responsibility disclosure. The research question asked is: Can Ullmann's stakeholder theory be operationalized to help explain the quantity and quality of environmental disclosures in annual reports in a voluntary reporting setting? Quantity is measured by the number of sentences devoted to environmental issues reported in the annual report while quality of disclosures is measured by a index scored by users of financial statements with financial reporting qualifications. Both quantity of disclosure and quality of disclosure are highly correlated. The sample consists of 102 of the largest companies listed on the Australian Stock Exchange. Ordinary least squares regression is used to determine if variables selected to measure stakeholder power, strategic posture and economic performance are significant in explaining the quantity and quality of environment disclosures in annuals reports. The stakeholder power dimension of Ullmann's framework measured by shareholder, regulator and lobby groups is significant in explaining environmental disclosures. The strategic posture dimension of Ullmann's model measured by content of the mission statement and existence or otherwise of environmental or social responsibility committees also find strong statistically significant support in the results. The third dimension of economic performance is not supported by the results. Consistent with prior studies, size is found to be a significant predictor of disclosure practices.

The relation between environmental performance and environmental disclosure: a research note

Previous studies of the relation between environmental performance and environmental disclosure have consistently documented a lack of significance. This study examines the relation between 1990 annual report environmental disclosures for a sample of 131 US companies and their environmental performance as based on toxics release data from 1988 (made available in 1990). In contrast to the previous examinations, results indicate that, controlling for firm size and industry classification (two factors previously shown to be related to the extent of environmental disclosure), there is a significant negative relation between performance and disclosure for the sample firms. However, the disclosure level of firms from non-environmentally sensitive industries is more affected by toxic release levels than is the disclosure of firms from environmentally sensitive industries.