Previous empirical evidence provided mixed results on the relationship between corporate environmental performance and environmental disclosures. We revisit this relation by testing economics based theories of voluntary disclosure using a more rigorous research design. In particular, we improve on the prior literature by focusing on purely voluntary environmental disclosures and by developing two reliable environmental performance measures using actual toxic emissions and waste management data. We also develop a content analysis index based on the Global Reporting Initiative sustainability reporting guidelines to assess the extent of discretionary disclosures in environmental and social responsibility reports. This index better captures firm disclosures related to its commitment to protect the environment than the indices employed by prior studies. Using a sample of 191 firms from the five most polluting industries in the U.S., we find a positive association between environmental performance and the extent of discretionary environmental disclosures. The result is consistent with the predictions of the economics based voluntary disclosure theory.
Includes the papers that discuss different aspects of sustainability, environmental performance, and environmental disclosures. This title analyzes what firms do about environmental issues and how these activities and their impact on the environment are disclosed in the financial statements.
The link between environmental performance and environmental disclosure is not clear, and previous studies in the U.S. and Canada have found mixed relationships. This studyresearched the disclosure behaviour of 53 Australian listed companies. Quantitative andqualitative research approaches were employed to provide explanations of the relationship between environmental performance and disclosure as the disclosure of environmental information still remains largely voluntary in Australia. Firms have the discretion to disclose additional information, which also gives them flexibility to determine the breadth and depth of their environmental reporting in the non-regulated sections of their annual report, and in other mediums such as environmental reports, sustainability reports and their websites. The quantitative relationship between environmental performance and disclosure was examined first, followed by interviews with company representatives and a review of each company's publicly available documents relating to environmental performance and disclosure. The findings from the quantitative component of the study revealed that environmentalperformance, measured by emissions divided by sales and Corporate Monitor environmental ratings, has no statistically significant association with environmental disclosure. In addition, the study also found that levels of environmental disclosure were generally low, and there was greater reliance on the use of soft or un-verifiable types of environmental disclosure than on hard or verifiable information. However, industry classifications, company size and capital intensity were found to affect the level of environmental disclosure. Firms may disclose environmental information if they belong to high polluting industries, are large and have outlayed considerable capital expenditure, as has been suggested by voluntary disclosure theory. However, disclosing firms were not found to receive perceived financial benefits such as lower cost of capital (equity), increased share price, better future financial performance, or lower cost of debts. This may suggest either that the financial market in Australia does not value environmental information in the same way that it values financial information, or that firms do not receive significant pressure from the financial market to disclose. Environmentaldisclosure may thus be limited as firms see the perceived costs as higher than the perceived financial benefits. Further, the findings from the qualitative study highlighted the different drivers of environmental disclosure across four groups, based on perceptual mapping of environmental performance and environmental disclosure. The study found that the high level of environmental disclosure for Greenwashing (poor performance and high disclosure) and Green Companies (good performance and high disclosure) was influenced by the demand of financial markets. In addition, for Green Companies, customers appear to have also demanded more transparency over firms' environmental practices. The low level of environmental disclosure for the Silent Con-panies (poorperformance and low disclosure) and Silent Achiever (good performance and low disclosure) groups may have been caused by low demand from their stakeholder base. Stakeholder theory is able to explain the environmental disclosure phenomena in Australia where firms tend to react to stakeholder groups' demands for environmental information. Disclosure can then be seen as a function of stakeholders' demands or pressures, and in the absence of such demand firms may disclose little or stay silent. This may suggest that they use disclosure practices as a public relations tool to satisfy stakeholder needs for information. The low level of environmental disclosure across the sample companies shows that Australian businesses do not appear to believe there is a strong business case to disclose environmental information. The study also revealed that the previous, largely voluntary, requirements for environmental disclosure enabled Australian businesses to disclose environmental information selectively, and this may not necessarily reflect their actual environmental performance. As a consequence, the users of these firms" environmental information may need to interpret the information carefully. The findings of this study also suggest regulators should avoid using a "one size fits all" approach. By understanding the drivers of disclosure, regulators can design regulations which cover all possible behaviours within the environmental performance and environmental disclosure relationship. Regulators may also need to endorse the development of an environmental reporting standard and mandatory audited environmental disclosure for Australian listed firms.
This book includes the proceedings of the 15th International Conference on Complex, Intelligent, and Software Intensive Systems, which took place in Asan, Korea, on July 1–3, 2021. Software intensive systems are systems, which heavily interact with other systems, sensors, actuators, devices, and other software systems and users. More and more domains are involved with software intensive systems, e.g., automotive, telecommunication systems, embedded systems in general, industrial automation systems, and business applications. Moreover, the outcome of web services delivers a new platform for enabling software intensive systems. Complex systems research is focused on the overall understanding of systems rather than its components. Complex systems are very much characterized by the changing environments in which they act by their multiple internal and external interactions. They evolve and adapt through internal and external dynamic interactions. The development of intelligent systems and agents, which is each time more characterized by the use of ontologies and their logical foundations build a fruitful impulse for both software intensive systems and complex systems. Recent research in the field of intelligent systems, robotics, neuroscience, artificial intelligence, and cognitive sciences is very important factor for the future development and innovation of software intensive and complex systems. The aim of the book is to deliver a platform of scientific interaction between the three interwoven challenging areas of research and development of future ICT-enabled applications: Software intensive systems, complex systems, and intelligent systems.
This study examines the relationship between the quality of a firm's voluntary environmental disclosures and firm value by exploring the relationship between the components of firm value (expected future cash flows and cost of equity) and voluntary environmental disclosure quality. We measure voluntary environmental disclosure quality using a disclosure index consistent with the Global Reporting Initiative disclosure framework for a sample of US firms across five industries. In addition to overall disclosure quality, we consider the type (i.e., hard/soft) and the nature (i.e., positive/neutral/negative) of the disclosure in our analysis. We also include controls for both positive and negative environmental performance. Based on this analysis, we document (1) a positive association between some aspects of voluntary environmental disclosure quality and future expected cash flows, and (2) both a negative and positive association between some aspects of voluntary environmental disclosure quality and a firm's cost of equity capital. Our findings are consistent with increased voluntary environmental disclosure quality being associated with firm value through both the expected cash flow and cost of equity capital components. The results also highlight the benefit of parsing broader measures (e.g. voluntary disclosure quality) when examining complex relationships.
Combines recent developments in resampling technology (including the bootstrap) with new methods for multiple testing that are easy to use, convenient to report and widely applicable. Software from SAS Institute is available to execute many of the methods and programming is straightforward for other applications. Explains how to summarize results using adjusted p-values which do not necessitate cumbersome table look-ups. Demonstrates how to incorporate logical constraints among hypotheses, further improving power.
Environmental and social performance measurement and reporting by business has become a high-profile issue during the 1990s. It is increasingly being requested by stakeholders and required by governments. Companies too are finding that they need better environmental and social performance data for effective internal management. And there are a growing number of standardisation initiatives – such as the ISO 14031 guidelines on environmental performance evaluation or the CERES Global Reporting Initiative (GRI) template for sustainability reporting – that are aimed at making it easier for more companies to take action, and for stakeholders to compare their progress.Sustainable Measures collects together most of the key work and individuals concerned with the topic from around the world. Contributions include: environmental and social reporting by John Elkington and colleagues at SustainAbility; the GRI discussion draft; Roger Adams and Martin Houldin on the FEE study of environmental reporting; Janet Ranganathan of the World Resources Institute on sustainability measures; and Martin Bennett and Peter James on ISO 14031 and the future of environmental performance evaluation. There are also chapters examining current practice in Austria, Denmark, India, Indonesia, Japan, the Netherlands and South Africa, developments in electronic reporting, as well as case studies of Baxter, Kunert, Niagara Mohawk, Unox, The Body Shop and the UK water industry, and an analysis of leading social reports.The book is essential reading for all academics, campaigners, policy-makers and practitioners with an interest in issues such as:The standardization and comparability of environmental and social performance measuresMeasuring and reporting on sustainable businessEco-points and other means of evaluating product impactsThe implementation of measurement and reportingBest practice in corporate environmental and social reportingNew means of communicating environmental dataEnvironmental performance evaluation in developing countries
This book provides perspectives on the latest developments and pertinent issues in the Indian financial sector in current times. The reforms initiated in the nineties in the financial sector have transformed the way financial markets and institutions function today. However, certain sectors like banking, and markets like the capital market have undergone sea changes. The research contributions in this book focus on the issues pertaining to such sectors like banking, NBFCs and the stock market. The opening up of financial markets and emergence of institutional investors have been a significant phenomenon in the Indian context. At this backdrop of increasing financial integration, the impact of financial liberalisation on the overall development of the sector, and how the global policies and events influence the Indian financial sector, are analysed in the book. The emergence of new regulations in the capital markets to instill more discipline and transparency, have also changed the way corporates take financing decisions. For example, regulatory authorities are continuously reviewing norms pertaining to issues like promoters’ shareholding owing to risks arising from excessive leverage and the linkages between financial intermediaries. Corporate governance, environmental aspects are some important additions in corporate financing norms in the recent past. The book incorporates a discussion on this, too. Apart from these, the book also has incorporated several aspects on an emerging concept called financial inclusion, its measurement and constraints to achieve the same. And finally, at the backdrop of the disruption created by the COVID-19 pandemic, the impact on the Indian capital market is also discussed. Contributions are based on rigorous empirical research and incorporate the perspectives of renowned academicians in the field of finance and financial economics across the country. Apart from the research community, this book will also be helpful for financial analysts working in the financial sector to have some idea about the current issues, the direction of research on those issues and different perspectives on them.
This study provides an integrated analysis of the interrelations among (1) environmental disclosure, (2) environmental performance, and (3) economic performance. Based on the argument that management's (unobservable) overall strategy affects each of these corporate responsibilities, we conjecture that prior literature's mixed results describing their interrelations may be attributable to the fact that researchers have not considered these functions to be jointly determined. After endogenizing these corporate functions in simultaneous equations models, we obtain results that suggest "good" environmental performance is significantly associated with "good" economic performance, and also with more extensive quantifiable environmental disclosures of specific pollution measures and occurrences.
