How does environmental performance map into environmental disclosure?

Hani Tadros (Department of Accounting, Elon University, Elon, North Carolina, USA)
Michel Magnan (John Molson School of Business, Concordia University, Montreal, Canada and CIRANO, Montreal, Canada)

Sustainability Accounting, Management and Policy Journal

ISSN: 2040-8021

Publication date: 4 March 2019



Focusing on a sample of firms from environmentally sensitive industries over several years, this study aims to reexamine the association between environmental disclosure and environmental performance.


The authors use a panel data analysis to examine how the interaction between environmental performance and economic and legitimacy factors influence firms’ environmental disclosures.


Results suggest that environmental performance moderates the effect of economic and legitimacy incentives on firms’ propensity to provide proprietary environmental disclosure, with both sets of incentives being influential. More specifically, there appears to be a reporting bias based on the firm’s environmental performance whereas the high-performers disclose more environmental information in the three following vehicles: annual report, 10-K and sustainability reports combined. Results also show that economic and legitimacy factors influence the disclosure decisions of the low and high environmental performers differently.

Practical implications

Understanding the determinants of environmental disclosure for high and low environmental performers helps regulators to close the reporting gap between these firms.

Social implications

There is little evidence to suggest that firms with low-environmental performance attempt to use their disclosures to legitimize their environmental operations.


The study examines environmental disclosures of 78 firms over a period of 14 years in annual, 10-K and sustainability reports. The panel data analysis controls for significant cross-sectional and period effects.



The authors thank participants at the American Accounting Association Mid-Atlantic Region Meeting for their comments and suggestions. Hani Tadros acknowledges funding from the Lawrence Bloomberg Chair in Accountancy (Concordia University). Michel Magnan acknowledges funding from the Lawrence Bloomberg Chair in Accountancy and the S.A. Jarislowsky Chair in Corporate Governance (both from Concordia University) and the Institute for the Governance of Private and Public Organizations.


Tadros, H. and Magnan, M. (2019), "How does environmental performance map into environmental disclosure?", Sustainability Accounting, Management and Policy Journal, Vol. 10 No. 1, pp. 62-96.

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