Environmental disclosure in the mining industry: A signaling paradox?
Sustainability, Environmental Performance and Disclosures
ISBN: 978-1-84950-764-6, eISBN: 978-1-84950-765-3
Publication date: 16 December 2009
Abstract
An environmental accident at a Placer Dome mine triggered a contagion effect across the Canadian mining industry. The decline in equity prices was moderated by prior disclosure of a high-level commitment to environmental management. Investors appear to interpret this information as a signal of expertise in the management of environmental risks and costs. The same companies are positioned to make the most credible financial disclosures about environmental management, and yet the evidence suggests that financial disclosures themselves have a negative impact on company value. There may be a miscommunication between investors and analysts on the one hand and mining company executives on the other, which could explain why mining company managers report their companies’ shares are undervalued.
Citation
Magness, V. (2009), "Environmental disclosure in the mining industry: A signaling paradox?", Freedman, M. and Jaggi, B. (Ed.) Sustainability, Environmental Performance and Disclosures (Advances in Environmental Accounting & Management, Vol. 4), Emerald Group Publishing Limited, Leeds, pp. 55-81. https://doi.org/10.1108/S1479-3598(2010)0000004006
Publisher
:Emerald Group Publishing Limited
Copyright © 2009, Emerald Group Publishing Limited