The Economic Relevance of Environmental Disclosure and its Impact on Corporate Legitimacy: An Empirical Investigation

Business Strategy and the Environment

Volumn 24, Issue 6, 2015, Pages 431-450

  Cormier, Denis ^a   Magnan, Michel ^b  

^a UNIVERSITÉ DU QUÉBEC À MONTRÉAL   (Canada)

^b Dept of Electrical and Computer Engineering   (Canada)

Author keywords

Analyst forecasts; Environmental disclosure; Environmental legitimacy; Environmental performance

Indexed keywords

EMPIRICAL ANALYSIS; ENVIRONMENTAL ECONOMICS; FINANCIAL MARKET; FORECASTING METHOD; STAKEHOLDER; SUSTAINABLE DEVELOPMENT;

EID: 84942365192     PISSN: 09644733     EISSN: 10990836     Source Type: Journal    
DOI: 10.1002/bse.1829     Document Type: Article

References (82)

1. Aerts W, Cormier D. 2009. Media legitimacy and corporate environmental communication. Accounting, Organizations and Society 34(1): 1-27.
2. Aerts W, Cormier D, Magnan M. 2008. Corporate environmental disclosure, financial markets and the media: an international perspective. Ecological Economics 64(3): 643-659.
3. Al-Tuwaijri S, Christensen TE, Hughes KE II. 2004. The relations among environmental disclosure, environmental performance, and economic performance: a simultaneous equations approach. Accounting, Organizations and Society 29(5/6): 447-471.
4. Ambec S, Lanoie P. 2008. Does it pay to be green? A systematic overview. Academy of Management Perspectives 22(4): 45-62.
5. Bansal P, Clelland I. 2004. Talking trash: legitimacy, impression management, and unsystematic risk in the context of the natural environment. Academy of Management Journal 47(1): 93-103.
6. Bansal P, Hunter T. 2003. Strategic explanations for the early adoption of ISO 14001. Journal of Business Ethics 46(3): 289-299.
7. Barron OE, Kim O, Lim S, Stevens DE. 1998. Using analysts' forecasts to measure properties of analysts' information environment. The Accounting Review 73(4): 421-433.
8. Basu K, Palazzo G. 2008. Corporate social responsibility: a process model of sensemaking. Academy of Management Review 33(1): 122-136.
9. Berthelot S, Coulmont M, Serret V. 2012. Do investors value sustainability reports? A Canadian study. Corporate Social Responsibility and Environmental Management 19(6): 355-363.
10. Berthelot S, Magnan M, Cormier D. 2003. Environmental disclosure research: review and synthesis. Journal of Accounting Literature 22: 1-44.
11. Bewley K, Li Y. 2000. Disclosure of environmental information by Canadian manufacturing companies: a voluntary disclosure perspective. Advances in Environmental Accounting and Management 1: 201-226.
12. Bird R, Hall AD, Momente F, Reggiani F. 2007. What corporate social responsibility activities are valued by the market? Journal of Business Ethics 76(1): 189-206.
13. Botosan CA. 1997. Disclosure level and the cost of equity capital. The Accounting Review 72(3): 323-350.
14. Brammer S, Pavelin S. 2008. Factors influencing the quality of corporate environmental disclosure. Business Strategy and the Environment 17(2): 120-136.
15. Brown N, Deegan C. 1998. The public disclosure of environmental performance information - a dual test of media agenda setting theory and legitimacy theory. Accounting and Business Research 29(1): 21-41.
16. Buhr N. 1998. Environmental performance, legislation and annual report disclosure: the case of acid rain and Falconbridge. Accounting, Auditing and Accountability Journal 11(2): 163-190.
17. Busch T. 2011. Organizational adaptation to disruptions in the natural environment: the case of climate change. Journal of Industrial Ecology 15(1): 160-163.
18. Bushman M, Piotrosky JD, Smith AJ. 2004. What determines corporate tranparency? Journal of Accounting Research 42(2): 207-252.
19. Cho C, Guidry RP, Hageman AM, Patten D. 2012. Do actions speak louder than words? An empirical investigation of corporate environmental reputation. Accounting, Organizations and Society 37(1): 14-25.
20. Cho CH, Patten DM. 2007. The role of environmental disclosures as tools of legitimacy: a research note. Accounting, Organizations and Society 32(7/8): 639-647.
21. Cho C, Roberts R, Patten D. 2010. The language of U.S. corporate environmental disclosure. Accounting, Organizations and Society 35(4): 431-443.
22. Clarkson P, Fang XH, Li Y, Richardson G. 2010. The Relevance of Environmental Disclosures For Investors and Other Stakeholder Groups: Are Such Disclosures Incrementally Informative? Working paper.
23. Clarkson P, Li Y, Richardson GD. 2004. The market valuation of environmental capital expenditures by pulp and paper companies. The Accounting Review 79(2): 329-354.
24. Clarkson P, Li Y, Richardson GD, Vasvari FP. 2008. Revisiting the relation between environmental performance and environmental disclosure: an empirical analysis. Accounting, Organizations and Society 33(4/5): 303-327.
25. Cormier D, Gordon IM. 2001. An examination of social and environmental reporting strategies. Accounting, Auditing and Accountability Journal 14(5): 587-616.
26. Cormier D, Gordon I, Magnan M. 2004. Corporate environmental reporting: contrasting management's values with reality. Journal of Business Ethics 49(2): 143-165.
27. Cormier D, Magnan M. 2003. Environmental reporting management: a European perspective. Journal of Accounting and Public Policy 22(1): 43-62.
28. Cowen SS, Ferreri LB, Parker LD. 1987. The impact of corporate characteristics on social responsibility disclosure: a typology and frequency-based analysis. Accounting, Organizations and Society 12(2): 111-122.
29. Dawkins C, Fraas J. 2011. Coming clean: the impact of environmental performance and visibility on corporate climate change disclosure. Journal of Business Ethics 100(2): 303-322.
30. Deegan C, Gordon B. 1996. A study of the environmental disclosure practices of Australian corporations. Accounting and Business Research 26(3): 187-199.
31. Deegan C, Rankin M. 1996. Do Australian companies report environmental disclosures by firms prosecuted successfully by Environmental Protection Authority. Accounting, Auditing and Accountability Journal 9(2): 50-67.
32. Deegan C, Rankin M, Tobin J. 2002. An examination of the corporate social and environmental disclosures of BHP from 1983-1997 - a test of legitimacy theory. Accounting, Auditing and Accountability Journal 15(3): 312-343.
33. Deegan C, Rankin M, Voght P. 2000. Firms' disclosure reactions to major social incidents: Australian evidence. Accounting Forum 24(1): 101-130.
34. Delmas M, Blass VD. 2010. Measuring corporate environmental performance: the trade-offs of sustainability ratings. Business Strategy and the Environment 19(4): 245-260.
35. De Villiers CJ, Van Staden CJ. 2006. Can less environmental disclosure have a legitimating effect? Evidence from Africa. Accounting, Organizations and Society 31(8): 763-781.
36. Dhaliwal DS, Zhen Li O, Tsang A, Yang YG. 2011. Voluntary nonfinancial disclosure and the cost of equity capital: the initiation of corporate social responsibility reporting. The Accounting Review 86(1): 59-100.
37. Doh JP, Howton SD, Howton SW, Siegel DS. 2010. Does the market respond to an endorsement of social responsibility? The role of institutions, information, and legitimacy. Journal of Management 36(10): 1461-1485.
38. Elsbach KD. 2003. Organizational perception management. Research in Organizational Behavior 25: 297-332.
39. Fanelli A, Misangyi VF. 2006. Bringing out charisma: CEO charisma and external stakeholders. Academy of Management Review 31(4): 1049-1061.
40. Fekrat MA, Inclan C, Petroni D. 1996. Corporate environmental disclosures: competitive disclosure hypothesis using 1991 annual report data. The International Journal of Accounting 31(2): 175-195.
41. Fifka MS. 2013. Corporate responsibility reporting and its determinants in comparative perspective - a review of the empirical literature and a meta-analysis. Business Strategy and the Environment 22(1): 1-35.
42. Fombrun C. 1996. Reputation: Realizing Value from the Corporate Image. Harvard Business School Press: Boston, MA.
43. Fowler SJ, Hope C. 2007. A critical review of sustainable business indices and their impact. Journal of Business Ethics 76(3): 243-252.
44. Freedman M, Wasley C. 1990. The association between environmental performance and environmental disclosure in annual reports and 10Ks. Advances in Public Interest Accounting 3: 183-193.
45. Gray R, Kouhy R, Lavers S. 1995. Corporate social and environmental reporting: a review of the literature and a longitudinal study of UK disclosure. Accounting, Auditing and Accountability Journal 8(2): 47-77.
46. Guthrie J, Parker LD. 1989. Corporate social reporting: a rebuttal of legitimacy theory. Accounting and Business Research 19(76): 343-352.
47. Hackston D, Milne MJ. 1996. Some determinants of social and environmental disclosures in New Zealand companies. Accounting, Auditing and Accountability Journal 9(1): 77-108.
48. Hannan MT, Freeman J. 1989. Organizational Ecology. Harvard University Press: Cambridge, MA.
49. Hassan A, Ibrahim E. 2012. Corporate environmental information disclosure: factors influencing companies' success in attaining environmental awards. Corporate Social Responsibility and Environmental Management 19(1): 32-46.
50. Hogner RH. 1982. Corporate social reporting: eight decades of development at U.S. Steel. Research in Corporate Social Performance and Policy 4: 243-250.
51. Hope OK. 2003. Disclosure practices, enforcement of accounting standards and analysts' forecasts accuracy: an international study. Journal of Accounting Research 41(2): 235-272.
52. Huang CL, Kung KH. 2010. Drivers of environmental disclosure and stakeholder expectation: evidence from Taiwan. Journal of Business Ethics 96(2): 435-451.
53. Ingram RW, Frazier KB. 1980. Environmental performance and corporate disclosure. Journal of Accounting Research 18(2): 615-622.
54. Jaggi B, Freedman M. 1982. An analysis of the informational content of pollution disclosures. The Financial Review 19(5): 142-152.
55. Janis IL, Fadner R. 1965. The coefficient of imbalance. In Language of Politics, Lasswell H, Leites N and associates (eds). MIT Press: Cambridge, MA; 153-169.
56. Kim EH, Lyon TP. 2011. When does institutional activists increase shareholder value? The Carbon Disclosure Project. The BE Journal of Economic Analysis and Policy 11(1): 93-121.
57. Lee S-Y, Park Y-S, Klassen RD. 2013. Market responses to firms' voluntary climate change information disclosure and carbon communication. Corporate Social Responsibility and Environmental Management. DOI: 10.1002/CST.13.
58. Margolis JD, Walsh JP. 2003. Misery loves companies: rethinking social initiatives by business. Administrative Science Quarterly 48(4): 655-689.
59. Meng XH, Zeng SX, Tam CM. 2013. From voluntarism to regulation: a study on ownership, economic performance and corporate environmental information disclosure in China. Journal of Business Ethics 116(1): 217-232.
60. Neu D, Warsame H, Pedwell K. 1998. Managing public impressions: environmental disclosures in annual reports. Accounting, Organizations and Society 23(3): 265-282.
61. Nunnaly J. 1978. Psychometric Theory. McGraw Hill: New York.
62. O'Donovan G. 2002. Environmental disclosures in annual report - extending the applicability and power of legitimacy theory. Accounting, Auditing and Accountability Journal 15(3): 344-371.
63. O'Dwyer B. 2002. Managerial perceptions of corporate social disclosure - an Irish story. Accounting, Auditing and Accountability Journal 15(3): 406-436.
64. Orlitzky M, Schmidt FL, Rynes SL. 2003. Corporate social and financial performance: a meta-analysis. Organization Studies 24(3): 403-441.
65. Patten DM. 1991. Exposure, legitimacy, and social disclosure. Journal of Accounting and Public Policy 10(4): 297-308.
66. Patten DM. 1992. Intra-industry environmental disclosures in response to the Alaskan oil spill: a note on legitimacy theory. Accounting, Organizations and Society 17(5): 471-475.
67. Patten DM. 2002. Media exposure, public policy pressure, and environmental disclosure: an examination of the impact of tri data availability. Accounting Forum 26(2): 153-171.
68. Patten DM. 2005. The accuracy of financial reports projections of future environmental capital expenditures: a research note. Accounting, Organizations and Society 30(5): 457-468.
69. Patton AJ, Verardo M. 2012. Does Beta Move with News? Firm-Specific Information Flows and Learning about Profitability. Review of Accounting Studies 25(9): 2789-2839.
70. P Farrer MD, Pollock TG, Rindova VP. 2010. A tale of two assets: the effects of firm reputation and celebrity on earnings surprises and investors' reactions. Academy of Management Journal 53(5): 1131-1152.
71. Rao H. 1998. Caveat emptor: the construction of nonprofit consumer watchdog organizations. American Journal of Sociology 103(4): 912-961.
72. Reid EM, Toffel MW. 2009. Responding to public and private politics: corporate disclosure of climate change strategies. Strategic Management Journal 29(10): 1027-1055.
73. Rockness JW. 1985. An assessment of the relationship between US corporate environmental performance and disclosure. Journal of Business Finance and Accounting 12(3): 339-354.
74. Savage AA, Cataldo AJ, Rowlands J. 2000. A multi-case investigation of environmental legitimation in annual reports. Advances in Environmental Accounting and Management 1: 45-81.
75. Scott WR. 1995. Institutions and Organizations. Sage: Thousand Oaks, CA.
76. Siegel DS. 2009. Green management matters only if it yields more green: an economic/strategic perspective. The Academy of Management Perspective 23(2): 5-16.
77. Spence C. 2009. Social and environmental reporting and the corporate ego. Business Strategy and the Environment 18(4): 254-265.
78. Walden DW, Schwartz BN. 1997. Environmental disclosures and public policy pressure. Journal of Accounting and Public Policy 16(2): 125-154.
79. Weber RP. 1990. Basic Content Analysis (2nd edn). Sage: Newbury Park, CA.
80. Williams SM, Ho Wern Pei CA. 1999. Corporate social disclosures by listed companies on their web sites: an international comparison. The International Journal of Accounting 34(3): 389-419.
81. Wilmshurst TD, Frost GR. 2000. Corporate environmental reporting: a test of legitimacy theory. Accounting, Auditing and Accountability Journal 13(1): 10-26.
82. Wiseman J. 1982. An evaluation of environmental disclosures made in corporate annual reports. Accounting, Organizations and Society 7(1): 53-63.