Some researchers have argued that firms with favorable environmental performance are more likely to provide voluntary environmental disclosure, while others have argued that firms with poor environmental performance are most likely to disclose. The authors propose a curvilinear relation between environmental performance and environmental disclosure that is moderated by visibility. Data were obtained from S&P 500 firms queried by Ceres' Climate Disclosure Project. Results show a U-shaped environmental performance—environmental (...) class='Hi'>disclosure relation and a main effect for visibility but no moderating effect for visibility on the U-shaped environmental performance-environmental disclosure relation. The authors discussed the implications of these results for future research and practice. (shrink)

Despite much research now being published on Environmental, Social, and Governance (ESG) investments and Initial Public Offerings (IPOs) withdrawal risk, there appears to be a lack of evidence on the prospective IPO withdrawal risk associated with voluntary disclosure of ESG policies. This paper investigates the influence of ESG disclosure on IPO withdrawal by comparing voluntary ESG disclosure to conventional IPOs in the international market. A large data set is employed here, containing 33,535 failed and (...) successful IPOs from 1995 to 2019 from several nations with their own legal systems, cultural norms, and economic systems. The findings reveal that voluntary disclosure of ESG practices does significantly reduce the likelihood of an IPO withdrawal, by as much as 48%. These findings strongly suggest that organizations engaged in ESG activities perceive voluntary disclosure as an incentive, to adhere to social expectations. Consequently, reducing the asymmetry of information between IPO participants minimizes the withdrawal risk these companies face, hence diminishing doubts about their legitimacy. The results have consequences for IPO businesses, investors, researchers, and regulators. (shrink)

Some researchers have argued that firms with favorable environmental performance are more likely to provide voluntary environmental disclosure, while others have argued that firms with poor environmental performance are most likely to disclose. The authors propose a curvilinear relation between environmental performance and environmental disclosure that is moderated by visibility. Data were obtained from S&P 500 firms queried by the Ceres’ Climate Disclosure Project. Results show a U-shaped environmental performance–environmental (...) disclosure relation and a main effect for visibility, but no moderating effect for visibility on the U-shaped environmental performance–environmental disclosure rela- tion. The authors discussed the implications of these results for future research and practice. (shrink)

Prior research suggests that voluntary environmental governance mechanisms operate to enhance a firm’s environmental legitimacy as opposed to being a driver of proactive environmental performance activities. To understand how these mechanisms contribute to the firm’s environmental legitimacy, we investigate whether environmental corporate governance characteristics are associated with voluntary environmental disclosure. We examine an increasingly important attribute of a firm’s disclosure setting, namely the disclosure of greenhouse gas (GHG) information. GHG (...) information represents proprietary non-financial information about the firm’s exposure to environmental concerns and is related to the firm’s operations and future profitability. Thus, we expect governance participants would view such information as a potentially important strategic device for managing stakeholders’ demands for information concerning environmental risks. We find that the presence of an environmental committee and a Chief Sustainability Officer (CSO) is positively associated with the likelihood of GHG disclosure and that CSOs are associated with disclosure transparency. Further analysis reveals that the likelihood of disclosure is associated with committee size, number of committee meetings, expertise of committee members and CSO, and overlap between the environmental committee and audit committee. Only expertise of the environmental committee members and the CSO are associated with GHG disclosure transparency, while larger committees tend to be associated with lower transparency. Our results are particularly important to those with interests in evaluating the potential role that corporate governance mechanisms play in responding to stakeholder concerns about environmental risks. Directors and officers who are considering appointment to similar governance positions, may wish to consider what attributes would make such governance positions more influential. (shrink)

Previous research provides mixed results on the relationship between corporate environmental performance and the level of voluntary environmental disclosure. We revisit this relation by testing competing predictions from defensive and accommodative approaches to voluntary disclosure with regard to climate change. In particular, we add to the prior literature by determining the extent to which environmental performance and company media visibility interact to prompt voluntary climate change disclosure. Using ordinal regression and Ceres, (...) KLD, and Trucost ratings of S& P 500 companies, we find a positive relationship between environmental performance and voluntary climate change disclosure. We extend the literature on environmental strategies and disclosure by establishing that company visibility and issue (climate change) visibility interact with environmental performance to influence the level of voluntary climate change disclosure. (shrink)

Based on the institutional theory, this article attempts to examine two consecutive questions regarding the impact of various factors on corporate decision in environmental information disclosure (EID): (1) whether or not to disclose; and (2) the level of disclosure. The relevance of these factors is empirically tested using data collected from publicly listed manufacturing companies from 2006 to 2008 in China. Some interesting findings appear. We find that firms that are state-owned, those that operate in environmentally sensitive (...) industries, those having more industrial peers engaged in EID, and those with better reputation are more likely to disclose environmental information. When it comes to the content of EID, variables that attempt to capture external institutional pressures exhibit either no or weak explanatory power. Only the variable of organizational image and reputation is demonstrated to have a significant impact on both the act and the content of EID. This study provides a snapshot of the dialogues between constituencies in the organizational field and EID development. (shrink)

We combine research on business groups with the socioemotional wealth approach from family firm research to examine how family control of business group firms affects voluntary disclosure of environmental performance information. Theorizing that disclosing environmental performance information weakens the owning family’s control over its business group firm, but also generates reputational benefits, we expect family ownership and disclosure propensities to relate in a U-shaped way and, further, that this U-shape is accentuated for business group firms (...) with a family CEO. Analysis of longitudinal data on disclosure decisions of South Korean business group firms supports our theory and suggests that the effect of family control on environmental performance disclosure is neither good nor bad; instead, it depends on both the level of family ownership and whether a family CEO is in place. The finding that disclosure propensities are greatest when family control of business group firms is most extensive is provocative: it suggests that the very element that often is seen to encourage inefficiencies and fraud in business groups—family ownership combined with family leadership—can also be leveraged to foster responsible behaviors. (shrink)

Although various studies have shown thatfarmers believe there is the need for a producer-ledinitiative to address the environmental problems fromagriculture, farmers in several Canadian provinceshave been reluctant to widely participate inEnvironmental Farm Plan (EFP) programs. Few studieshave examined the key issues associated with adoptingEFP programs based on farmers', as opposed to policymakers', perspectives on why producers are reluctantto participate in the program. A study adapting VanRaaij's (1981) conceptual model of the decision-makingenvironment of the firm, and prospect theory on valuefunctions (...) associated with the gains and losses fromrisky choices can be used to characterize how farmersperceive potential risks in environmental farmplanning. This framework can be used to assert thatfarmers are concerned about risks of public disclosureof potentially incriminating environmental informationfrom farms because the EFP program requirements foridentification and extensive documentation of farminformation is perceived by farmers as facilitatingthe accessibility of environmental information to thepublic, and public investigative efforts. Although theEFP program does not explicitly generate informationabout the environmental conditions of a farm nor thedisclosure of such information to the public, itcreates the possibility of generating and divulgingpotentially incriminating information that the farmermay want to treat as confidential. Yet, alone, theserisks of public disclosure concerns should not preventfarmers from participating in the EFP. Awareness ofand participation in environmental farm planning canbe increased if farmers and policy makers understandwhat the risks are, and how they arise. Aspects of theEFP process that have the potential to generate riskof public disclosure concerns relate to farm reviews,documentation and record keeping, and correctiveaction plans. There are legal and policy instrumentsthat can offer various forms of protection and helpminimize such risks, and these need to be assessed. (shrink)

Although legitimacy theory provides strong arguments that environmental, social and governance disclosure and performance can help mitigate firm-specific risks, this relationship has been repeatedly challenged by conceptual arguments, such as ‘transparency fallacy’ or ‘impression management’, and mixed empirical evidence. Therefore, we investigate this relationship in the revelatory case of initial public offerings, which represent the first sale of common stock to the wider public. IPOs are characterised by strong information asymmetry between firm insiders and society, while at the (...) same time suffering from uncertainty in firm legitimacy, culminating in amplified financial risks for both issuers and investors in aftermarket trading. Using data from the United States, we demonstrate that voluntary ESG disclosure reduces idiosyncratic volatility and downside tail risk and higher ESG ratings have lower associated firm-specific volatility and downside tail risk during the first year of trading in the aftermarket. We provide theoretical arguments for the relationships observed, suggesting that companies striving for ESG performance and communicating their efforts signal their compliance with sustainability-related norms, thus acquiring and upholding a societal license to operate. ESG performance and disclosure help companies build their reputation capital with investors after going public. We also report that ESG disclosure is a more consistent proxy for ex-ante uncertainty as an indicator of aftermarket risk, thereby replacing some of the more conventional measures, such as firm age, offered in the existing literature. (shrink)

This article examines whether economic performance could affect EID and how the relationship is determined by the form of ownership from voluntarism to regulation under the current Chinese context. In this study, our empirical results show that the relationship between firms’ performance and EID is complex and the interactive impact of ownership and economic performance on EID significantly varies from voluntary disclosure to mandatory disclosure. This study provides a more comprehensive understanding of the motivations in corporate EID. (...) The performance–impression theory can be used to explain the disclosure behaviors during the period of voluntary disclosure, while the pressure–legitimacy theory can be used during the period of mandatory disclosure. The finding suggests that when evaluating corporate EID associated with economic performance in emerging economies such as China, it needs to be cautious, as which tends to vary with the form of ownership and whether there is any mandatory regulation in place. (shrink)

Normativity is assessed as we evaluate and compare the environmental reporting practices of a sample of French and Canadian companies through the lens of institutional legitimacy. More specifically, we examine how French and Canadian firms changed their reporting practices in reaction to the promulgation of laws and regulations in their respective countries, i.e., the NER and Grenelle II Acts in France, and National Instrument 51-102 and CSA Staff Notice NR 51-333, issued by the Canadian Securities Administrators. The firms’ (...) class='Hi'>voluntary disclosures according to GRI guidelines are also investigated. Substantive legitimacy theory is used to explore the level of substantive disclosures provided by Canadian and French firms. The findings reveal that the French parliamentary regime is more successful than the Canadian stock exchange regulation in triggering environmental reporting, and that the GRI combined with local regimes prompts environmental disclosures. Notwithstanding the improvements in environmental reporting under all three regimes, a very low level of substantive disclosure is noted in both countries. (shrink)

Corporate, Social, Ethical and Environmental Reporting should ideally discharge the accountability of an organisation to its stakeholders. Voluntary reporting has been characterised by a dearth of neutral and objective information such that the advocates of SEER recommend that it be made compulsory. Their underlying rationale is that legally specified disclosure requirements and enforcement mechanisms will enhance the quality of such reporting. This paper sets out to explore how realistic this scenario actually is, in view of the conflicting (...) interpretations in the literature on this subject. To that end, a survey of the reporting patterns of 78 of the largest Spanish companies between 2001 and 2003 examines the extent of their compliance with the ICAC-2002 standard, which obliged them to make environmental disclosures in their financial statements. The results suggest that progressive and improved regulation could increase the volume and quality of SEER disclosures. They also suggest, however, that persistent non-compliance means that the problems associated with voluntary disclosure still exist. Finally, through an impression management perspective, the study reveals, the diverse strategies, ranging from dismissal to concealment, that are employed by companies to avoid transparency. As regulation improves and enforcement expectations rise, it becomes more difficult to dismiss compulsory reporting norms. As a result, some firms engage in more complex concealment strategies to attain corporate legitimacy, depriving stakeholders of regulatory information. The latter point serves to reconcile apparently contradictory explanations in the literature as to whether legitimacy theory might explain partial compliance with SEER regulation. (shrink)

The disclosure of corporate environmental performance is an increasingly important element of a firm’s ethical behavior. We analyze how the legal origin of foreign institutional investors affects a firm’s voluntary greenhouse gas emissions disclosure. Using a large sample of firms from 36 countries, we show that foreign institutional ownership from civil law countries improves the scope and quality of a firm’s greenhouse gas emissions reporting. This relation is robust to addressing endogeneity and selection biases. The effect (...) is more pronounced in firms from non-climate-sensitized countries, for which the gap between firms’ environmental standards and investors’ environmental targets is potentially larger, and in less international firms. Firms with a higher level of voluntary greenhouse gas emissions disclosure also exhibit higher valuations. (shrink)

Voluntary disclosures of sustainability information have recently received considerable attention by investors, regulators, and public companies in improving reliability and integrity of corporate reporting. We examine the association between the quantity and quality of sustainability disclosures and earnings quality in the context of corporate ethical value and culture. We posit that sustainability disclosures of environmental, social, and governance (ESG) performance reports are linked to earnings quality, because of the importance of both earnings quality and ESG sustainability disclosures to (...) investors and trustworthiness of corporate reporting. We collect our sample of 35,110 firm-year observations between 1999 and 2015. Using both difference-in-difference tests and OLS regression, we find that sustainability disclosure quantity is positively associated with innate earnings quality and negatively correlated with discretionary earnings quality in mitigating managerial earnings manipulation and unethical opportunistic reporting behavior. Further tests illustrate that sustainability disclosure quality can strengthen the positive relation between innate earnings quality and sustainability disclosure quantity and mitigate the negative relation between discretionary earnings quality and sustainability disclosure quantity. Finally, additional tests suggest that the relation between earnings quality and sustainability disclosure quantity is moderated by corporate structure and prior-year sustainability performance. Our results provide policy, practical, and research implications as ESG sustainability reporting is being integrated into corporate culture and business models. (shrink)

We explore corporate environmental accountability by examining how carbon emissions affect voluntary climate-related information disclosure based on TCFD principles. Using computerized textual analysis to measure such climate-related disclosure, our results show that firms with higher levels of carbon emissions disclose more climate-related information. This relation is stronger in firms belonging to carbon-intensive industries, such as energy, materials, and utilities. We also examine this relationship at the category level for Governance, Strategy, Risk Management, and Metrics and Targets, (...) finding that carbon emissions drive disclosure in all categories except in Governance. Overall, our findings indicate that high carbon emitting firms appear to discharge their corporate accountability by increasing climate-related disclosure, consistent with legitimizing their potentially unethical actions and submitting to stakeholder and societal pressure. (shrink)

Ecological objectives in environmental reports usually promise a high degree of environmental responsibilities in a company’s activities. Several studies have already highlighted that most companies do not keep their promises since stakeholders’ expectations and a company’s capabilities for internal adjustments do not always match. Thus, a company might use strategic reporting in order not to endanger its legitimacy. However, no study so far has demonstrated how companies use different legitimacy strategies in reporting their environmental objectives over time. (...) To achieve this in our study, we focus primarily on findings from legitimacy theory in combination with the legitimacy strategies suggested by Lindblom Social and environmental accounting: developing the field, Sage, Los Angeles, pp 51–63, 2010). To test our theoretical framework empirically, we analyze 260 corporate environmental reports of German DAX companies between the years 2000–2014 by coding all disclosed objectives within these reports. Based on this longitudinal approach, we are able to identify reporting patterns of the different companies that provide insights into those companies’ environmental reporting legitimacy strategies. Overall, this study contributes to research on voluntary disclosure by showing that a comprehensive analysis of the reporting pattern of disclosed objectives allows the identification of certain legitimacy strategies. (shrink)

Recent years have witnessed an escalation in corporate social reporting (CSR) by UK companies (Gray, Kouhy and Lavers 1995). Whilst some elements of CSR reporting are required by law, much of it represents voluntary reporting. By investigating the non‐mandatory reporting of two aspects of social responsibility, corporate community involvement (CCI) and environmental impact, this paper seeks to explore why companies choose to make such disclosures. It specifically asks whether companies are primarily motivated by the strategic need to manage (...) their reputation and legitimacy rather than by the recognition of their ethical accountability, which is the stated purpose of reports produced by cutting edge companies (Clarke 1998). (shrink)

A growing number of multinational companies (MNCs) report on their progress toward contributing to the Sustainable Development Goals (SDGs) in their annual reports, yet the amount and quality of the information they disclose varies significantly. The aim of this study is twofold: First, we investigate how transparent MNCs report on their SDG engagement and second, we study how the reported SDG engagement changed over time due to major shifts in sustainability reporting requirements. Using a dataset of the largest German MNCs, (...) we analyze their disclosure of SDG contribution reporting practices. Our results show that, overall, between 2016 and 2021 all German MNCs increased their SDG reporting activity and that the MNCs adopted four different practices to report their SDG engagement. We also found that the largest MNCs were more transparent and systematic in their SDG reporting than smaller MNCs, whose reporting was more heterogeneous. Our study contributes to legitimacy research and the role of transparency in corporate reporting as well as the debates on the efficacy of sustainability reporting legislation in the context of SDG engagement. Our findings imply that regulations on environmental and social regulation increase the transparency of sustainability reporting. (shrink)

This study investigates the distinct and joint effects of corporate social performance, firm size, and visibility on a company’s decision to disclose sustainability-related information through sustainability reports. It seeks to provide more nuanced explanations for why certain companies tend to extensively report on their sustainability performance. First, while prior studies have predominantly focused on environmental reporting, the current analysis considers comprehensive sustainability reports that include both environmental and social issues. Second, the article argues that the effects of two (...) important antecedents of legitimacy pressure—firm size and organizational visibility—should be analyzed separately rather than restricting the analysis on the effects of legitimacy pressure per se. Third, it argues that the hypothesized effects are nonlinear because the marginal costs and benefits of sustainability reporting vary with a company’s CSP level, its size, and its visibility in the public. Finally, although there is a strong link between CSP and sustainability reporting, the strength of this link depends on its size and visibility. The study of 280 companies in environmentally and socially sensitive industries provides considerable support for these hypotheses, including evidence that size and visibility independently affect sustainability reporting and that the shape of the CSP/sustainability reporting link is contingent upon firm size and visibility. (shrink)

Building on an illustrative case of a systemic environmental threat and its multi‐stakeholder response, this paper draws attention to the changing political impacts of corporations in the digital age. Political Corporate Social Responsibility (PCSR) theory suggests an expanded sense of politics and corporations, including impacts that may range from voluntary initiatives to overcome governance gaps, to avoiding state regulation via corporate political activity. Considering digitalization as a stimulus, we explore potential responsibilities of corporations toward public goods in contexts (...) with functioning governments. We show that digitalization—in the form of transparency, surveillance, and data‐sharing—offers corporations’ scope for deliberative public participation. The starry sky beetle infestation endangering public and private goods is thereby used to illustrate the possibility of expanding the political role of corporations in the digital sphere. We offer a contribution by conceptualizing data‐deliberation as a Habermasian variation of PCSR, defined as the (a) voluntary disclosure of corporate data and its transparent, open sharing with the public sector (b) along with the cooperation with governmental institutions on data analytics methods for examining large‐scale datasets (c) thereby complying with existing national and international regulations on data protection, in particular with respect to privacy and personal data. (shrink)

Building on agency and resource-based view theories, this study investigates the level of environmental disclosure (ED) practices of family versus non-family firms and explores the moderating role of board gender diversity. We test our hypotheses on a 3-year (2018–2020) panel data sample comprising 324 observations of Italian small- and medium-sized enterprises traded on the Euronext Growth Milan. Findings show that, compared to non-family firms, companies with a family firm status are characterized by lower levels of ED. Gender diversity (...) on the board, however, moderates this relationship, reducing this gap, to the extent that the family firm status is associated with higher ED when the number of women directors is high enough to constitute a critical mass. We consequently contribute to the studies on family business, corporate governance, and corporate social responsibility. (shrink)

This paper's purpose is to assess how management's perceptions regarding certain aspects of environmental reporting relate to the firm's actual reporting strategy. Toward that end, we propose a model where a firm's environmental disclosure is conditional upon executive assessments of corporate concerns. The study relies on a survey that was sent to environmental management executives from European and North American multinational firms enquiring about the determinants of corporate environmental disclosure. Responses from these executives were (...) then contrasted with their firms' actual environmental reporting practices, which was measured using a comprehensive multi-criteria grid. Results show that there is a relationship between environmental managers' attitudes toward various stakeholder groups and how those managers respond to the stakeholders via the decision to disclose and the actual disclosures made. Our model provides a perspective as to how a firm responds to the numerous stakeholders to whom it must be accountable. This accountability in turn relates to how the company communicates its actions to society in order to achieve or maintain its social legitimacy. (shrink)

This paper aims to examine the credibility value of sustainability assurance and the type of assurance provider on cost of capital. A large sample of international companies from the period 2007–2014 was used to develop our models of analysis. We find a greater decrease in cost of capital for companies that publish and assure their social and environmental reports. Thus, voluntary sustainability disclosures decrease the cost of capital. However, companies also have the opportunity to reinforce this decrease by (...) providing an assurance statement, so increasing the credibility of corporate social responsibility information. In addition, the decrease in the cost of capital is significantly higher when such assurance is provided by a top-tier accountancy firm instead of by engineering or consultancy firms; this result supports also the reputational capital of accountancy firms. (shrink)

This article analyzes the adoption of voluntary environmental management programs by firms operating in Mexico. Mexican firms can obtain national certification (Clean Industry) and/or international certification (ISO 14001). Based on institutional entrepreneurship theory, we posit that the role played by first movers as institutional entrepreneurs is crucial if these programs are to become established with sufficient strength and appeal. This understanding is especially important in an environment where more than one program can be adopted. We tested several hypotheses (...) on the behaviors of 1328 facilities operating in Mexico, half of which (664) had certified environmental management programs. Of the 664 certified facilities, 217 were classified as early adopters. Three variables predicted the likelihood of a facility being an early adopter: (1) connected to international market, (2) in the maquila sector, and (3) linked to an industry association that offers free resources. (shrink)

For the last 15 years, companies have extensively increased their environmental disclosure relative to their environmental strategy in response to institutional pressures. Based on a computerized content analysis of the annual reports of the 55 largest French industrial companies, we describe environmental disclosure with respect to the different strategies implemented by companies over a period of 6 years. The results show that environmental disclosure becomes more and more technical and precise for all the (...) companies. Environmental innovations are presented as a means of increasing energy efficiency and of obtaining a competitive advantage in green market products. The environmental management system implemented by proactive companies allows them to improve their environmental performance. However, the results show that the economic situation significantly influences the way environmental issues are addressed. (shrink)

Corporate-level environmental information disclosure is increasingly common. This article studies the impact of a prominent media-generated sustainability ratings program, Newsweek’s 2009 ranking of the 500 largest U.S. firms. Using an event study methodology, the authors find the rankings had a significant impact on shareholder value. Firms in the top 100 experienced abnormal returns after the information release that were 0.6%–1.0% higher than returns of firms in the bottom 400. The form of the information released had significant effects as (...) well. Nuanced environmental score variables had no independent impact on market outcomes; only the final ranking mattered. This article also explores possible channels through which the rankings may have had their impact. The authors find suggestive evidence that private and public politics mechanisms were the most important. (shrink)

We meta-analyze 103 studies of 23 voluntary environmental programs (VEPs) to assess how their governance quality, or the rigor of their internal institutional mechanisms, drives their ability to improve their participants corporate environmental and financial performance. The goal of VEPs is to incentivize firms to reduce firms’ environmental impacts by bolstering their reputations and helping them learn practices that improve their financial performance. Research on VEP effectiveness, however, is inconclusive, in part, because most studies sampled individual (...) programs, and were unable to analyze how difference in program characteristics drive their effectiveness. We draw on institutional theory to argue that VEP governance quality determines whether they improve participants’ environmental performance, and the natural resource-based view to argue that they improve their financial performance. Results confirm our predictions, and in doing so, help to establish a business case for VEPs with high-quality governance. (shrink)

This article investigates stakeholder expectations associated with corporate environmental disclosure. Several articles have studied the effect that stakeholder pressure has on environmental disclosing strategies. In this article, we extend previous research to an examination of the influence of external, internal, and intermediary stakeholder groups or constituencies in turn to clarify the demands of multiple stakeholders as to firms' disclosure of sufficient and adequate environmental information. The sample comprised Taiwanese firms listed on the Taiwan Stock Exchange. (...) Our results show that the level of environmental disclosure is significantly affected by stakeholder groups' demands. External stake-holder groups, such as the government, debtors, and consumers, exert a strong influence over management intentions regarding the extent of environmental disclosure. Internal stakeholder groups, such as shareholders and employees, impose additional pressures on firms to disclose environmental information. As for intermediate stakeholder groups, environmental protection organizations, and accounting firms, these can greatly influence managerial choices regarding their environmental disclosure strategies. (shrink)

This paper examines the adoption of ISO 14001, which is known as the most famous voluntary environmental program. The data of this paper pertain to Korean [Throughout this paper, Korea refers to the Republic of Korea ] firms in manufacturing industries from 1996 to 2011. Event-history modeling to examine firms’ adoption of ISO 14001 finds that both resource-based factors and institutional factors have influenced the diffusion of ISO 14001 in Korea. By exploring time-related effects, I also find that (...) while resource-based factors are important in the early periods of the diffusion, institutional factors become important in the later periods of the diffusion. This confirms the findings of previous studies that a firm’s motivation to adopt organizational policies varies according to different diffusion periods. The paper concludes with a brief discussion of what this study tells us about the institutional context of ISO 14001 in Korea and Asia more broadly. (shrink)

This article examines stakeholder involvement and influence as part of voluntary environmental agreements between regulatory agencies and companies. Ten pilot projects that were part of the U.S. Environmental Protection Agency’s Project XL were examined to evaluate process goals and outcome goals. The ten case studies encompass a range of businesses, locations, and ideas for regulatory “reinvention” projects, and they span a spectrum of stakeholder participation processes and outcomes. Although results point to numerous problems in implementation, they also (...) indicate that in several cases, stake holder groups significantly affected the final project agreement and enforceable permit. The evidence suggests that companies can work collaboratively and constructively with residents of local communities, members of national environmental organizations and other interest groups, and government regulatory officials to craft voluntary environmental agreements that are cooperative and environmentally beneficial. (shrink)

This study investigates how firms in the gambling industry manage their corporate social disclosures about controversial issues. We performed thematic content analysis of CSDs about responsible gambling, money laundering prevention and environmental protection in the annual reports and stand-alone CSR reports of four USA-based multinational gambling firms and their four Macao counterparts. This study draws on impression management theory, camouflage theory and corporate integrity theory to examine the gambling firms’ CSDs. We infer that the CSD strategies of gambling firms (...) in Macao and the USA did not serve as vehicles for reflexivity about social responsibility or social responsiveness. Instead, the firms camouflaged legitimacy gaps about sensitive topics by adopting assertive or defensive façades, disclaiming ethical responsibility, curtailing disclosure, or offering zero disclosure. Differences between CSD strategies according to topic, location, time, and reporting channel appear to reflect four factors: pressure to report, availability of good news, whether a firm was assuming ethical responsibility for addressing the topic, and the prospective readership. This study extends our understanding of the contextual and topic-specific factors affecting the quantity and character of CSDs by firms in a contested industry. (shrink)

Today, more corporations disclose information about their environmental performance in response to stakeholder demands of environmental responsibility and accountability. What information do corporations disclose on their websites? This paper investigates the environmental management policies and practices of the 200 largest corporations in the world. Based on a content analysis of the environmental reports of Fortune’s Global 200 companies, this research analyzes the content of corporate environmental disclosures with respect to the following seven areas: environmental (...) planning considerations, top management support to the institutionalization of environmental concerns, environmental structures and organizing specifics, environmental leadership activities, environmental control, external validations or certifications of environmental programs, and forms of corporate environmental disclosures. (shrink)

Two fundamental business ethics issues that repeatedly surface in the academic literature relate to business's role in the development of public policy [Suarez, S. L.: 2000, Does Business Learn? (The University of Michigan Press, Ann Arbor, MI); Roberts, R. W. and D. D. Bobek: 2004, Accounting, Organizations and Society 29(5-6), 565-590] and its role in responsibly managing the natural environment [Newton, L.: 2005, Business Ethics and the Natural Environment (Blackwell Publishing, Oxford)]. When studied together, researchers often examine if, and how, (...) corporations influence environmental policy decisions. Drawing from literatures on corporate political activity, corporate social and environmental performance, and corporate environmental disclosure, we develop and empirically examine two research questions concerning the relations between corporate political expenditures, environmental performance, and environmental disclosure. The questions are: (1) Do corporations that are poorer environmental performers spend more on political activities than their better-performing counterparts? (2) Is there an association between corporations' spending on political activities and the extent of their financial report environmental disclosures? We investigated these questions through analyses of data we gathered on a sample consisting of 119 U.S. environmentally sensitive firms for the 2001-2002 election cycle. After controlling for firm size and specific industry effects, our tests reveal a significant, inverse relationship between firm environmental performance and political spending. This is consistent with the notion that U.S. firms with relatively poorer environmental performance records engage more intensely in corporate political activities as part of their overall strategic management of their relationship with the state. In addition, a significant and positive association between the amount of political spending and the extent of environmental disclosure suggests that environmental disclosure and political spending are both proactive, complementary tactics to strategically manage public policy pressure. If corporations' strategies are intentionally designed to unreasonably limit their environmental responsibilities or to misrepresent firm environmental performance, then we argue that these activities reflect a significant lapse in ethical conduct. (shrink)

Social screening of investments calls not only for investment policy and criteria, but also for information about companies, their policies, practices and performance. The Global Reporting Initiative (GRI) and its June 2000 Sustainability Reporting Guidelines have the potential to significantly improve the usefulness and quality of information reported by companies about their environmental, social and economic impacts and performance. The GRI aims to develop a voluntary reporting framework that will elevate sustainability reporting practices to a level equivalent to (...) that of financial reporting in rigour, comparability, auditability and general acceptance. This will be a welcome and efficient supplement to the questionnaires, interviews, press releases, media reports and other sources of information traditionally used for screening in investment decision making - social/ethical and mainstream. The Dow Jones Sustainability Group Index, the Jantzi Social Index and the Innovest EcoValue'21 analytical platform, together with the SRI community, are all likely to benefit from GRI-style sustainability reports. One of the GRI's key challenges is to accommodate the broad variety of disclosure needs and expectations of a wide range of report users and company stakeholders. To maximize the usefulness of the GRI Guidelines, report users, including the SRI community, need to be engaged in the process of developing and refining the Guidelines over time. The GRI Guidelines are emerging as an important instrument in enabling companies to communicate with their stakeholders about performance and accountability beyond just the financial bottom line. (shrink)

This study investigates the social and environmental disclosure practices of socially responsible Chinese listed firms as displayed in their annual reports and corporate social responsibility reports from the perspective of stakeholders. A stakeholder-driven, three-dimensional social and environmental disclosure index that integrates the quantity and two aspects of the quality of disclosure perceived by stakeholders is constructed to assess the social and environmental disclosures in firm annual reports and CSR reports. The study results indicate that (...) stakeholders perceive different disclosure types and disclosure items as important to differing degrees. CSR reports provide more stakeholder-relevant social and environmental disclosure than annual reports. (shrink)

Research and practice of Voluntary Earnings Disclosure (VED) as a strategy are limited, notwithstanding its evidenced contribution to firm value. An emerging VED profile is identified, characterised and evaluated. Firms applying it regularly provide VED between quarterly earnings announcements. This profile is compared with the prevailing approach of issuing VED when warranted by events and/or when serving firm or management ad hoc interests. These firms' VEDs are found to be more regular, frequent, timely, and often with confirming content. (...) Their VED events, usually midquarter updates, are often prescheduled and specifically named using period-related terms. These controllable characteristics qualify it as a strategy, termed 'Period-Driven VED', in distinction from 'Event-Driven VED'. The period-driven VED strategy is found to improve a firm's information environment through a reduced information gap, measured by abnormal stock returns, lower analysts' forecast error and dispersion, and fewer surprises around earnings-release dates. The firm's improved information environment leads to lower cost of capital, as evidenced by prior theoretical and empirical research, enhancing firm value. (shrink)

This paper sheds further light on the role of quantification in corporate environmental disclosures. Quantification is an inherently social practice, which has attracted a fair amount of academic interest in recent years. At the same time, in the field of social and environmental accounting there is a paucity of research on quantification or the role it plays for organisations, for organisational communication and in societies more broadly. Accordingly, in this paper, we will draw on a qualitative case study (...) to discuss the potential implications that might arise from the use of quantified information in corporate environmental disclosures. Our case study illustrates the diverse effects of quantification suggested in the prior literature by placing them in the context of corporate environmental disclosures. We discuss how quantification implies fake precisionism and promotes commensuration of incomparables, thereby limiting the discussion to themes and questions preferred by company management. We maintain that quantification, while appearing to produce neutral and value-free information, has a substantive ethical dimension through how it implicates accountability relationships as well as the respective power relations between diverse stakeholders in societies. (shrink)

The aim of the paper is to investigate the effects of the corporate governance model on social and environmental disclosure (SED). We analyze the disclosures of the 100 U.S. Best Corporate Citizens in the period 2005–2007, and we posit a series of simultaneous relationships between different attributes of the governance system and a multidimensional construct of corporate social performance (CSP). We consider both the extent and the quality of SED, with the purpose of identifying increasing levels of corporate (...) commitment to stakeholders and shedding some light on whether SED is used as a signal or rather as a legitimacy tool. Our empirical evidence shows that the stakeholders’ orientation of corporate governance is positively associated with CSP and SED. On the other hand, we do not find support for the monitoring intensity of corporate governance being negatively associated with social performance. We also find that CSP in the “product” dimension is positively associated with the extent and quality of SED whilst CSP in the “people” dimension is negatively associated with the extent and quality of SED. At a time when shareholders and stakeholders share more common aspects in their relationships with firms, this is a significant area to explore and this research fills an important lacuna in this respect. (shrink)

The Global Reporting Initiative (GRI) has successfully become institutionalized as the preeminent global framework for voluntary corporate environmental and social reporting. Its success can be attributed to the “institutional entrepreneurs” who analyzed the reporting field and deployed discursive, material, and organizational strategies to change it. GRI has, however, fallen short of the aspirations of its founders to use disclosure to empower nongovernmental organizations (NGOs). The authors argue that its trajectory reflects the power relations between members of the (...) field, their strategic choices and compromises, their ability to mobilize alliances and resources, and constraints imposed by the broader institutions of financial and capital markets. The authors draw three notable implications from this study. First, institutional theory needs to pay more attention to economic structures, strategies, and resources. Second, institutional entrepreneurship by relatively weak societal groups such as NGOs is inherently constrained by the structural power of wider institutions and by the compromises required to initiate change. Third, the strategies of NGOs represent a form of power capable of shifting, if not transforming, the field of corporate governance. (shrink)

As global warming continues to attract growing levels of attention, various stakeholders have put climate change on corporate agendas and expect firms to disclose relevant greenhouse gas information. In this paper, we investigate the consistency of the GHG information voluntarily disclosed by French listed firms through two different communication channels: corporate reports and the Carbon Disclosure Project. More precisely, we contrast the amounts of GHG emissions reported and the methodological explanations provided in each channel. Consistent with a stakeholder theory (...) perspective, we find that GHG amounts are significantly lower in the CR than in the CDP. We also find that firms increase the CR figures’ traceability when there is a discrepancy between disclosures in the two channels. We suggest that the aim of this greater traceability is to enhance information credibility across the different channels used. (shrink)

This article recommends that the U.S. Securities and Exchange Commission (SEC) not regulate corporate social responsibility (CSR) disclosure. Accounting disclosures, whether voluntary or regulated, increase transparency and credibility for all companies. Regulated disclosure increases costs and results in few gains; thus, this article recommends against CSR disclosure regulation. Varying definitions of CSR and nonuniform disclosure make CSR project analysis difficult for investors and analysts. This article presents a model that defines CSR items such as organizational (...) size, CSR project size, amount invested in the project, and what standard companies use for CSR definition and reporting for easy voluntary disclosure. Based on a review of the literature, this article recommends that CSR disclosure stay voluntary. The model suggests allowing SEC oversight in the collection and verification of information but not regulating CSR disclosure. This article suggests that the SEC issue a CSR “seal of approval,” increasing firm values, stock prices, and firm legitimacy. (shrink)

This study utilises higher objectives postulated in Islamic moral economy or themaqasid al-Shari’ahtheoretical framework’s novel approach in evaluating the ethical, social, environmental and financial performance of Islamic banks.Maqasid al-Shari’ahis interpreted as achieving social good as a consequence in addition to well-being and, hence, it goes beyond traditional (voluntary) social responsibility. This study also explores the major determinants that affectmaqasidperformance as expressed through disclosure analysis. By expanding the traditionalmaqasid al-Shari’ah,, we develop a comprehensive evaluation framework in the form (...) of amaqasidindex, which is subjected to a rigorous disclosure analysis. Furthermore, in identifying the main determinants of themaqasiddisclosure performance, panel data analysis is used by including several key variables alongside political and socio-economic environment, ownership structures, and corporate andShari’ahgovernance-related factors. The sample includes 33 full-fledged Islamic banks from 12 countries for the period of 2008–2016. The findings show that although during the nine-year period the disclosure ofmaqasidperformance of the sampled Islamic banks has improved, this is still short of ‘best practices’. Through panel data analysis, this study finds that the Muslim population indicator, CEO duality,Shari’ahgovernance, and leverage variables positively impact the disclosure ofmaqasidperformance. However, the effect of GDP, financial development and human development index of the country, its political and civil rights, institutional ownership, and a higher share of independent directors have an overall negative impact on themaqasidperformance. The findings reported in this study identify complex and multi-faceted relations between external market realities, corporate andShari’ahgovernance mechanisms, andmaqasidperformance. (shrink)

This paper investigates potential motivations for late adopting U.S. companies to begin disclosing environmental liability amounts in their financial statements. Based on a review of 10-K reports filed from 1998 through 2012, inclusive, we identified 55 firms initiating environmental liability disclosure over the period, with all but three doing so by 2006. Focusing on the disclosers up through 2006, we argue that the companies may have used the disclosure as a tool of impression management to avoid (...) potential stakeholder mis-estimation of previously undisclosed liability exposures. We first compute tests to identify firms that may have begun the disclosure due to (1) materiality and (2) concerns of having proprietary costs imposed upon them due to changes in their environmental media coverage and environmental performance, and we find very few cases where these explanations might hold. For the remaining companies, we compared their newly disclosed liability amount, on average, with the mean level of environmental liability being disclosed by other firms in the year prior to the sample companies’ initiation, and find that it is significantly smaller, thus supporting our impression management argument. Finally, we find that overall level of environmental liability amounts was consistently decreasing over the time frame examined, suggesting that earlier adoption would have made more sense. However, it may also explain why almost no new firms began disclosing after the mid-2000s. (shrink)

We examine the link between a firm’s environmental and social disclosures and measures of its risk including total, systematic, and idiosyncratic risk. While we do not find any link between a firm’s E and S disclosures and its systematic risk, we find a negative and significant association between these disclosures and a firm’s total and idiosyncratic risk. These are novel findings and are consistent with the predictions of the stakeholder theory and the resource-based view of the firm suggesting that (...) firms which make extensive and objective E and S disclosures promote corporate transparency that can help them build a positive reputation and trust with their stakeholders. This in turn can help mitigate the firms' idiosyncratic/operational risk. These findings are important for all corporate stakeholders including managers, employees, and suppliers who have a significant economic interest in the survival and success of the firm. (shrink)

This paper reports on an exploratory study of the preferences of users of non-financial reporting for regulatory or voluntary approaches to integrated reporting. While it is well known that companies prefer voluntary approaches to non-financial reporting, considerably less is known about the preferences of the users of non-financial information. IR is the latest development in attempts over 30 or more years to broaden organisational non-financial reporting and accountability to include the wider social and environmental impacts of business. (...) It promises to provide a more cohesive and efficient approach to corporate reporting by bringing together financial information, operational data and sustainability information to focus only on material issues that impact an organisation’s ability to create value in the short, medium and long term. The study found more support for voluntary approaches to IR as the majority of participants thought that it was too early for regulatory reform. They suggested that IR will become the reporting norm over time if left to market forces as more and more companies adopt the IR practice. Over time IR will be perceived as a legitimate practice, where the actions of integrated reporters are seen as desirable, proper, or appropriate. While there is little appetite for regulatory reform, half of the investors support mandatory IR because, in their experience, voluntary sustainability reporting has not led to more substantive disclosures or increased the quality of reporting. There is also evidence that IR privileges financial value creation over stewardship, inhibiting IR from moving beyond a weak sustainability paradigm. (shrink)

As a tool for regulating the environment in China, does environmental information disclosure reduce pollutant discharge? To answer this question, we empirically analyzed the emission data of “the three wastes” in unit industrial GDP in 31 provincial units. As a measure to reduce institutional emission, environmental information disclosure only slightly influenced waste discharge reduction in the implementation period of the Eleventh Five-Year Plan of China. Instead, command control and market-based tools significantly affected waste discharge reduction. Representative (...) measures included penalties and charges. With the continuously enhanced pressure of control, environmental information disclosure facilitates the effects of command control tools on waste discharge reduction. Content analysis of environmental information disclosed by sample listed companies in Jiangsu Province was conducted. The disclosure of insufficient environmental information on emission reduction can be attributed to “adverse selection” in system performance and to the limited quality of overall environmental information disclosure. This study provides empirical evidence for Chinese policy makers to improve the system for environmental information disclosure of listed companies. (shrink)

Corporate social responsibility involvement and disclosure has been becoming increasingly popular among US public firms, including those that qualify as real estate investment trusts. This paper aims to discover the relationship between CSR involvement and potential determinants such as growth opportunities, profitability, visibility, and agency costs. Types of CSR involvement are assessed in terms of environmental, community, and governance disclosures and are quantified using word count from the company’s voluntary disclosure. Our results support the hypothesis that (...) CSR has a strategic element and that REITs have greater CSR involvement when they have greater growth and investment opportunities. When the type of disclosure is broken into subcategories, the results show that not all dimensions of CSR are alike: environmental, community, and governance CSR disclosures appear to be motivated by different sets of incentives and reasons. (shrink)