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

40 Pages Posted: 21 Sep 2004

See all articles by Jason D. Mitchell

Jason D. Mitchell

Singapore Management University - School of Accountancy

Majella Percy

Griffith University

Bridget McKinlay

BDO Kendalls

Date Written: July 2004

Abstract

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

Keywords: Environmental performance, environmental reporting, voluntary disclosure

JEL Classification: M14, M41, M44, M47

Suggested Citation

Mitchell, Jason D. and Percy, Majella and McKinlay, Bridget, Voluntary Environmental Reporting Practices: A Further Study of 'Poor' Environmental Performers (July 2004). Available at SSRN: https://ssrn.com/abstract=593182 or http://dx.doi.org/10.2139/ssrn.593182

Jason D. Mitchell (Contact Author)

Singapore Management University - School of Accountancy ( email )

60 Stamford Road
Singapore 178900
Singapore
+65 6808 7939 (Phone)

Majella Percy

Griffith University ( email )

170 Kessels Road
Nathan, Queensland QLD 4111
Australia

Bridget McKinlay

BDO Kendalls ( email )

Level 18, 300 Queen Street
Brisbane
Australia

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