The 100 plus corporate environmental report study: A survey of an evolving environmental management tool

An emerging environmental management tool is the corporate environmental report, a free-standing document, analogous to the corporate annual report, but which covers environmental and often health and safety issues. This study examines the nature of the corporate environmental reports of large, public, US companies to determine which companies produce reports, what type of information is reported, how this information is presented, and who might be the audiences for this information. This study also seeks to identify state of the art practice in corporate environmental reports, drawing on the US reports and leading environmental reports from Europe and Canada. Over 100 US companies now publish corporate environmental reports. These companies are primarily from the manufacturing sector, although they are increasingly part of the service sector. Report issuers identified employees and shareholders as their primary audiences. Both overall report organization and composition as well as report distribution, including the use of the Internet for environmental reporting, were examined. Topics which reflect leading edge environmental practice are identified and examples from reports are given. These topics include integrating business and environmental performance, environmental policy, goals and measurement, management and organizational structure, environmental and resource data presentation, third-party verification, disclosure of negative information, and sustainability. The paper discusses trends in reporting and makes recommendations to improve reports.© 1997 John Wiley & Sons, Ltd and ERP Environment.     

Sustainability reporting in Norway – an assessment of performance in the context of legal demands and socio‐political drivers

This article explores the influence of societal, political and regulatory characteristics and developments on the quality of corporate sustainability disclosures in Norway. The paper presents an assessment both of mandatory reporting under the Norwegian Accounting Act, and of voluntary reporting in annual and separate non‐financial reports, by the 100 largest firms in Norway. Our results reveal that only 10% of the companies comply with the legal requirements on environmental reporting, while only half of the firms comply with the legal reporting provisions on working environment and gender equality. The vast majority of firms also report unsatisfactorily on non‐financial issues in the voluntary disclosures assessed. Analysing the causes of these results, we contend that the situation is characterized by (1) an apparent lack of political and social drivers for sustainability reporting in Norway and (2) an absence of sufficient monitoring and enforcement of the environmental reporting legislation on the part of Norwegian authorities. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Environmental,Social and Governance Reporting in China

What is the current state of environmental, social and governance (ESG) reporting and what is the relation between ESG reporting and the financial performance of Chinese companies? This study analyses corporate ESG disclosure in China between 2005 and 2012 by analysing the members of the main indexes of the biggest Chinese stock exchanges. After discussing theories that explain the ESG performance of firms such as institutional theory, accountability and stakeholder theory we present uni‐ and multivariate statistical analyses of ESG reporting and its relation to environmental and financial performance. Our results suggest that ownership status and membership of certain stock exchanges influence the frequency of ESG disclosure. In turn, ESG reporting influences both environmental and financial performance. We conclude that the main driver for ESG disclosure is accountability and that Chinese corporations are catching up with respect to the frequency of ESG reporting as well as with respect to the quality. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Institutional Constraints,Stakeholder Pressure and Corporate Environmental Reporting Policies

Within the theoretical framework of socio‐political economics, and more specifically of stakeholder theory, this work examines whether companies operating under different institutional constraints and stakeholder pressure tend to emphasize different models of corporate environmental reporting. Furthermore, the paper tests whether different corporate environmental reporting policies are driven by the countries' corporate governance systems. A sample of 3931 international companies was examined through a logistic biplot and conditional mean linear regression models. The main results reveal that companies follow two distinct environmental reporting approaches, which depend on specific stakeholders and institutional requirements. The first model, which is followed by firms within codified law countries, mostly focuses on water and emissions. The second approach, mainly followed by companies operating in common law countries, emphasizes materials and energy issues. This finding reveals that companies gradually modify their environmental strategies to make themselves more compatible with the characteristics of the social and institutional environment, which will result in several corporate benefits. The paper provides several outstanding implications for companies' strategic managers, national institutions and firms' stakeholders, especially for investors and customers. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Climate Change and Mandatory Carbon Reporting: Impacts on Business Process and Performance

As part of their annual directors' report, UK‐listed companies are now required to disclose their greenhouse gas emissions and account publicly for their contributions to climate change. This paper uses this mandatory carbon reporting to explore wider debates about corporate social responsibility and the purpose, practice, and impacts of such non‐financial reporting. Empirically, it combines documentary analysis of the carbon reporting practices of 176 large firms listed in the FTSE100 and/or subject to the UK government's adaptation reporting power with 60 interviews with stakeholders involved in carbon reporting. Firms disclose their emissions in response to financial incentives, social pressure and/or regulatory compulsion. In turn, rationales shape whether and how carbon reporting influences internal business processes and performance. The importance of reporting to the bottom line varies by sector depending on two variables – energy intensity and economic regulator status – yet there is limited evidence that carbon reporting is driving substantial reductions in emissions. Findings suggest reasons for caution about hopes for ‘nudging’ firms to improve their environmental performance and social responsibility through disclosure requirements.     

Defining Eco‐efficiency: A Case Study on the Finnish Forest Industry

Environmental reporting is a tool of corporate environmental management that can also be used as research material. The aim of this paper is to produce a comprehensive definition of eco‐efficiency based on the literature and then compare it with definitions identified in the environmental reports published by selected companies. In addition, this paper presents a conceptual framework of the relationship between environmental and economic performance in the companies. Three Finnish companies in the forest industry are selected as case companies. This analysis reviews environmental reports published by the companies from 1998 to 2007. In short, eco‐efficiency can be seen either as an indicator of environmental performance, or as a business strategy for sustainable development. The case companies very seldom give an exact definition of eco‐efficiency in their environmental reports. However, different aspects of eco‐efficiency are often referred to. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.     

The mediating role of natural and social resources in the corporate social responsibility—corporate financial performance relationship

Failure to obtain definitive results regarding the influence of corporate social responsibility (CSR) on corporate financial performance (CFP) has prompted scholars to investigate mechanisms behind this relationship. This paper follows the same path and distinguishes two dimensions of CSR (social and environmental) to expand the pool of potential mediators on the basis of natural‐ and social resource‐based view (RBV) of the firm. In a unique dataset comprising seven potential mediators for 300 companies, a direct relationship only existed between environmental CSR and CFP, in contrast to the “new road” from social CSR to CFP that goes through external reputation and innovativeness—variables that form an opposing mediation.     

Corporate social responsibility and sustainability reporting on the Internet

All material related to environmental and social performance on the corporate internet sites of 454 Fortune Global 500 and Fortune 1000 companies in 25 industrial sectors was analyzed using the Pacific Sustainability Index. Maximum scores for individual sectors were 20–75 percent of the total possible, highest in the largest and most environmentally sensitive sectors and ranging generally linearly, as shown by plotting score versus rank, down to nearly zero in every sector. None of the variation in score is explained by corporate revenue in the Asian and European firms in this sample (revenues greater than about $9 billion), but there is a very weak correlation between score and revenue for American firms of this size, and a stronger one when Fortune 1000 companies (all American) with revenues smaller than this are included, suggesting that, as corporate size reaches a certain threshold, sustainability reporting becomes independent of it. Copyright © 2009 John Wiley & Sons, Ltd and ERP Environment.     

Determinants of Internet Financial Reporting by New Zealand Companies

The development of the Internet as a global medium for the dissemination of corporate financial information creates a new reporting environment. Extensive literature examines the determinants of voluntary financial reporting through traditional media such as print–based annual reports. This paper extends this literature by examining the voluntary adoption of the Internet as a medium for transmitting financial reports and determinants of such voluntary practice by New Zealand companies. The results indicate that some determinants of traditional financial reporting—firm size, liquidity, industrial sector and spread of shareholding—are determinants of voluntary adoption of Internet financial reporting (IFR). However, other firm characteristics, such as leverage, profitability and internationalization do not explain the choice to use the Internet as a medium for corporate financial reporting.     

User needs in sustainability reporting: Perspectives of stakeholders in Ireland

Abstract

By means of a questionnaire survey, this paper ascertains and analyses the views of a number of Irish stakeholders regarding the adequacy and potential of corporate sustainability reporting to meet their information needs and help them hold corporations to account. The study focuses on ascertaining the views of a sample of Irish social and environmental non-governmental organisations (NGOs), who we argue constitute an important group of non-financial stakeholders. This emphasis on examining NGO perceptions represents an attempt to fill a gap in the academic sustainability reporting research literature whereby the views of non-managerial stakeholders are largely absent. The paper represents the second phase of a determined effort to examine the adequacy of sustainability reporting from the perspective of less economically powerful stakeholders in Ireland and responds specifically to O'Dwyer's (2002) call for research to examine the nature of stakeholder demand for sustainability reporting in Ireland in order to inform the future development of Irish sustainability reporting practices. The results present evidence of a widespread demand for mandated, externally verified sustainability reporting in either the annual report or a separate stand-alone report. This demand is primarily driven by a desire to gain knowledge of companies' commitment to responsible business practices but is also, albeit to a lesser extent, influenced by the perceived ability of sustainability reporting to facilitate increased NGO pressure on companies. Current sustainability reporting practice is viewed negatively with regard to its credibility and sufficiency, as well as the opportunities it provides for engagement with companies, particularly among environmental NGO respondents. While respondents tended to be suspicious of corporate motives for sustainability reporting, many were optimistic about the potential for NGO engagement with companies aimed at tackling social and environmental issues and improving current sustainability reporting practice. Drawing on the survey results, the paper makes some recommendations for future research aimed at improving sustainability reporting practices in Ireland and more broadly.     

The Effect of Country‐Level Investor Protection on the Voluntary Assurance of Sustainability Reports

Over the last several years, sustainable (or socially responsible) investing has experienced rapid growth around the world reflecting an increasing awareness by investors of social, environmental, ethical, and corporate governance issues. This heightened awareness among investors has resulted in a demand for sustainability reporting and a corresponding increase in demand for assurance of sustainability information to enhance its credibility. Using an investor‐based view, we examine the impact of country‐level investor protection on reporting companies’ voluntary sustainability assurance decisions. We find that both the decision to obtain voluntary sustainability report assurance and the decision to obtain higher quality assurance are more likely for firms domiciled in countries that have weaker investor protection. Our results indicate that managers in low investor protection countries use voluntary sustainability assurance as a substitute monitoring mechanism.     

Reporting on sustainability and HRM: a comparative study of sustainability reporting practices by the world's largest companies

As a response to the growing public awareness on the importance of organisational contributions to sustainable development, there is an increased incentive for corporations to report on their sustainability activities. In parallel with this has been the development of ‘Sustainable HRM’ which embraces a growing body of practitioner and academic literature connecting the notions of corporate sustainability to HRM. The aim of this article is to analyse corporate sustainability reporting amongst the world's largest companies and to assess the HRM aspects of sustainability within these reports in comparison to environmental aspects of sustainable management and whether organisational attributes – principally country-of-origin – influences the reporting of such practices. A focus in this article is the extent to which the reporting of various aspects of sustainability may reflect dominant models of corporate governance in the country in which a company is headquartered. The findings suggest, first and against expectations, that the overall disclosure on HRM-related performance is not lower than that on environmental performance. Second, companies report more on their internal workforce compared to their external workforce. Finally, international differences, in particular those between companies headquartered in liberal market economies and coordinated market economies, are not as apparent as expected.     

Environmental and Social Policy and Earning Persistence

In recent years, the effect of disclosure on environmental and social information has been the subject of much research in an Anglo‐Saxon context. The European field, and especially the French companies, have not been sufficiently discussed. In this paper, we investigate the relationship between social and environmental disclosure and earning persistence (as a proxy of earning quality). We use the content analysis method with annual reports as a measure of social and environmental disclosure; the empirical validation is applied to the companies listed in the SBF 250 French stock market index over the 2005–2010 period. To measure earning persistence we opt for a regression of a time‐series model on panel data. The findings show that French companies are characterized by a high level of social and environmental reporting; this situation may affect positively the quality of earnings such as more persistent earnings. This means that companies with a higher level of social and environmental commitment are more likely to take benefits and to communicate more persistent earnings and be desirable to investors. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.     

Environmental business strategy: the Portuguese case

This study focuses on the adoption of environmental management systems and corporate social responsibility reporting as mechanisms for creating a differential advantage, looking at how different stakeholders in an organization perceive the importance of instituting these mechanisms as determinants of market success. The paper then aims to focus on environmental business strategy and corporate social responsibility reporting in companies, rather than prescribing policy for the entire sector. In so doing it postulates that compliance with market requirements on environmentally related issues, by instituting proper environmental management mechanisms and corporate social responsibility reporting, is a pre‐requisite for acceptance of the firm and its products in the market. The paper is methodologically based on a set of 60 interviews conducted with various agents in the Portuguese textile industry, ranging from policy‐makers to industrialists and NGOs, with a view to determining differences in perception between the various stakeholders. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Corporate social and environmental disclosure as a sustainable development tool provided by board sub-committees: Do women directors play a relevant moderating role?

The aim of this research is to examine the impact of three audit committee characteristics on corporate social and environmental responsibility (CSR) disclosure: the existence of an audit committee, audit committee independence, and audit committee financial expertise. Moreover, this research analyzes the moderating effect of board gender diversity between these audit committees' attributes and CSR reporting. The results of analyzing 13,178 firm-year observations of non-financial companies show that the presence of an audit committee and audit committee financial expertise are positively associated with CSR disclosure. However, a higher proportion of non-executive directors in audit committees has a negative effect on the disclosure of CSR information. These findings suggest that some audit committees' features play an important role in ensuring the reporting of environmental, social, and economic information. Our evidence also indicates that the presence of female directors on boards increases the positive impact of financial expert membership of audit committees on CSR disclosure, while women directors moderate any negative effect of the percentage of independent directors on audit committees on CSR reporting by increasing the latter. In addition, female directors moderate the positive impact of the existence of an audit committee on the disclosure of CSR information by reducing the latter.     

The impact of national culture on integrated reporting quality. A stakeholder theory approach

Integrated reporting (IR) is a new corporate‐reporting system that aims to represent the firm's value creation in the short, medium, and long term. In contrast to other disclosure systems focusing on non‐financial dimensions, including social and environmental aspects, IR is characterized by information connectivity. In recent years, integrated reporting has received increasing interest, both academic and professional. However, report quality is still a critical aspect of IR. Although several studies investigate IR, few focus on quality and its determinants. This study aims to fill this gap by investigating the impact of national culture, an external determinant, from a stakeholder theory perspective. The results show that IR quality is related to five dimensions of Hofstede—power distance, individualism, masculinity, and indulgence negatively and uncertainty avoidance positively. This study contributes to the relevant literature by analysing an additional factor that influences the quality of corporate reports, namely, national culture. This is the first study that investigates national culture as a determinant of integrated‐reporting quality.     

Relationship Between Sustainable Development and Financial Performance: International Empirical Research

The aim of this paper is to clarify the relationship between companies' sustainable behavior and their financial performance (FP), which has been studied for several years without reaching a consensus on the effect and the direction of it. Hypotheses are tested for an unbalanced sample of 1960 multinational non‐financial listed companies from 25 countries and one administrative region for the period between 2002 and 2010. Due to the use of an international database and the differences among countries, it is possible to observe divergence between institutional settings. For this reason, a corporate governance system (Anglo‐Saxon, Germanic, Latin and Asian) is used as characteristic of the macro‐environment. Results obtained via the generalized method of moments estimator allow us to support the existence of a positive bidirectional relationship between corporate social responsibility and FP, evidencing the existence of a synergistic circle. The use of market value indicated that investors are able to identify economic, social and environmental practices generating a positive effect on FP. These relationships differ between corporate governance systems, due to the specific characteristics of each system. Findings are robust for each sustainable sub‐index (society, human rights, environmental and board). Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

ESG表现与企业金融化——内外监管双“管”齐下的调节效应

以2011—2018年A股非金融、非房地产上市公司为样本,探讨环境、社会责任及公司治理（ESG）表现对企业金融化的影响效应。研究表明：ESG表现抑制了企业金融化,而企业内部监管会放大ESG表现对企业金融化的负向效应,外部金融监管则弱化了两者之间的负向关系。抑制效应、放大效应和弱化效应在环境、社会责任方面体现较为明显,而在公司治理方面不明显。进一步研究发现,ESG表现以及环境、社会责任能通过融资约束抑制企业金融化行为,融资约束在公司治理对企业金融化的影响中不具有中介作用;异质性分析发现ESG表现以及环境、社会责任对企业金融化的抑制效应在国有企业、研发能力较强企业中较为显著,而公司治理在非国有企业和研发能力较强的企业中表现出正向的金融化效应。研究结果丰富了ESG表现影响企业金融化的理论机制,为完善上市公司监管制度体系、夯实实体经济发展根基提供了依据。     

Corporate motivations for environmental sustainable development: exploring the role of consumers in stakeholder engagement

This paper examines the extent to which the end‐consumer appears to influence corporate behaviour towards reporting specific environmental management activities, through examination of environmental disclosures by the UK FTSE 100 companies. The paper also explores whether proximity to the end‐consumer is associated with particular motivations for environmental management – whether cost‐reducing or reputational benefits, hypothesizing that close‐to‐consumer companies (C2C) will have a greater focus on reputational benefits than their counterparts. The results established that C2C companies were significantly more active in particular environmental measures (climate change and management processes) than their counterparts. They were also more likely to undertake environmental activities for which there was no explicit cost‐reduction benefit, suggesting that reputation with consumers/society may be a particular business motivator for them. These findings are important to policy makers, government and investors in terms of identifying which companies are leading particular aspects of the corporate environmental agenda and understanding the driving forces for it. Copyright © 2009 John Wiley & Sons, Ltd and ERP Environment.     

Immediate trends in Internet reporting

The Internet is increasingly used by companies to disseminate financial information. However, the extent to which the use of this new medium will change corporate reporting practice has received surprisingly little debate in the published literature. To widen the participation in the debate, this paper posits that the future of Internet-based financial reporting is contingent on technological and non-technological factors. This proposition is evaluated using the opinions of the immediate trends in online reporting obtained from seventeen UK experts in accounting and/or the Internet who responded to an open-ended questionnaire. These experts were drawn from academics, auditors, regulators, reporting companies and users of corporate reports. While the experts concur on some issues, they provide a range of different views in other areas. Some views are technology-driven, whereas others pay more attention to non-technological factors such as resistance to technological change, users' reluctance to read financial reports and the slow reaction of regulators. Some experts foresee minimum changes in financial reporting over the short term, while others adopt a more progressive or even radical perspective. This paper has synthesized these views into nine major categories which provide information on the role of the Internet in financial reporting. The results have important implications for all parties involved in financial reporting and also indicate avenues for further research.