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1 – 10 of over 88000Japan applies a quasi-mandatory approach to corporate environmental reporting by defining the desired norm through formal law and guidelines and pushing large companies to be role…
Abstract
Purpose
Japan applies a quasi-mandatory approach to corporate environmental reporting by defining the desired norm through formal law and guidelines and pushing large companies to be role models regardless of their sensitivity to environmental impacts. This study aims to analyze the change in Japanese companies reporting quality to justify this approach’s capability to produce normativity of environmental reporting.
Design/methodology/approach
This study examines the change in corporate environmental reporting quality and the effect of company characteristics on it. The analysis focuses on 88 companies for 2008, 2013 and 2018, resulting in 264 company-year observations.
Findings
The result shows a continuous upward trend, although it is unsatisfactory regarding the comparability and free from error characteristics. Then, company size positively affects the quality, and sensitivity to environmental impacts does not. Overall, the findings indicate that Japan is moving toward normativity through the quasi-mandatory approach and the norm entrepreneurship of its large companies, regardless of their sensitivity to environmental impacts.
Research limitations/implications
This study could relieve the belief that it is necessary to apply a mandatory approach to improve reporting quality and enrich views on the effect of company characteristics which mainly used only the legitimacy perspective.
Originality/value
This study proposes a more comprehensive measure of environmental reporting quality. The measure is based on the qualitative characteristics of useful information from the most influential accounting standard-setting bodies. In addition, the effect of company characteristics on the quality is explained based on the norm entrepreneurship view instead of the legitimacy perspective.
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Mohammad Alipour, Mehrdad Ghanbari, Babak Jamshidinavid and Aliasghar Taherabadi
The purpose of this paper is to examine the association between corporate environmental disclosure quality (EDQ) and earnings quality (EQ).
Abstract
Purpose
The purpose of this paper is to examine the association between corporate environmental disclosure quality (EDQ) and earnings quality (EQ).
Design/methodology/approach
The paper uses earnings persistence and accruals quality as a measures of EQ. The paper also uses panel data regression to examine the association between EDQ and EQ for a sample of 107 Iran non-financial firms. Two different theoretical frameworks are used to clarify whether and to what extent an association may exist as an explicit relationship between EDQ and EQ.
Findings
After controlling for several firm-specific characteristics, the results show that between 2011 and 2016, there has been a significant positive relationship between EDQ and EQ.
Practical implications
This study sheds light on the relevance of regulating corporate reporting within a setting where companies are already voluntarily reporting on environmental information. Findings have implications for policymakers who have mandated or considering mandating environmental reporting. To the policymakers, in particular, this study highlights the need for incorporating, within the listing rules, minimum requirements in relation to the nature and content of environmental reports.
Social implications
The findings have implications for stakeholders in terms of effective information quality. The findings are important as more environmentally responsible firms may provide higher quality, more reliable and more transparent information to meet the ethical expectations of stakeholders.
Originality/value
This is the first study in Iran that considered the impact of EDQ on EQ. This study contributes to the literature on the relationship between EDQ and EQ by showing that the EDQ in Iran is associated with the EQ.
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Akrum Helfaya, Mark Whittington and Chandana Alawattage
The purpose of this paper is to provide a multidimensional model for assessing the quality of corporate environmental reporting (CER) incorporating both preparer- and user-based…
Abstract
Purpose
The purpose of this paper is to provide a multidimensional model for assessing the quality of corporate environmental reporting (CER) incorporating both preparer- and user-based views.
Design/methodology/approach
As opposed to frequently used researcher-chosen proxies, the authors used an online questionnaire asking preparers and users how they assess the quality of a company’s environmental report.
Findings
The analysis of the responses of 177 users and 86 preparers shows that quantity was not perceived as the most significant element in determining quality. Besides quantity, the respondents also perceived information types, measures used, themes disclosed, adopting reporting guidelines, inclusion of assurance statement and the use of visual tools as significant dimensions/features of reporting quality.
Research limitations/implications
The online questionnaire has some limitations, especially in terms of researcher being absent to clarify meanings and, hence, possibilities that respondents may misinterpret the questionnaire elements.
Practical implications
Considering that robust, reliable measurement of reporting quality is difficult, preparers, standard setters and policy makers need multidimensional quality models that incorporate both users’ perceptions of quality and preparers’ pragmatic understanding of the quality delivery process. These will make the preparers informed of whether their disclosure may be falling short of users’ expectations.
Originality/value
Amid, increasing complexity of CER, the research contributes to the growing body of literature on assessing the quality of CER by developing a less subjective, multidimensional, preparer–user-based quality model. This innovative quality model goes beyond the traditional quality models, subjective author-based quality measures. Focussing on the three dimensions of reporting quality – content, credibility and communication – it also offers a high-level resolution of meaning of CER quality.
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Marwa Moalla, Bassem Salhi and Anis Jarboui
This study empirically tests a comprehensive set of relevant factors to explain environmental reporting quality. This study aims to understand whether environmental assurance has…
Abstract
Purpose
This study empirically tests a comprehensive set of relevant factors to explain environmental reporting quality. This study aims to understand whether environmental assurance has a direct effect on “environmental reporting quality”. In addition, this study also aims to examine the relationship between corporate governance and the quality of environmental reporting as measured by voluntary and timely reporting.
Design/methodology/approach
A number of econometric techniques are used including panel data specifications using a sample of French listed companies in SBF120 for the period 2012–2017.
Findings
The results demonstrate that the presence of an environmental audit committee and the size of the environmental external assurance firm has a significant effect on the level of voluntary reporting of environmental information. The results also reveal that the presence of the environmental audit committee, as well as the corporate social responsibility (CSR) committee, the size of the environmental external assurance and corporate governance index, affect the timely environmental reporting.
Research limitations/implications
This study helps all market participants to more comprehensively evaluate the quality of environmental reporting in the French context and highlights whether various factors could affect the quality of the environmental information disclosed using a multi-theoretical framework.
Originality/value
This paper fills the gap in the literature by highlighting an unexplored field of literature about the quality of environmental reporting by linking on the division of the quality of environmental information reporting into sub-dimensions (voluntary reporting and timely reporting) in the French context. To the knowledge, no empirical study has been done on the timely reporting of environmental information in the French context or other contexts. The originality of the work consists of the fact that it is one of the first works that deal with the relationship between environmental external assurance, corporate governance and the quality of environmental reporting.
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This paper aims to investigate the effect of audit quality and environmental auditing on integrated reporting and the effect of environmental auditing on audit quality.
Abstract
Purpose
This paper aims to investigate the effect of audit quality and environmental auditing on integrated reporting and the effect of environmental auditing on audit quality.
Design/methodology/approach
Data was collected from a sample of 300 international companies during the period 2010–2019. The author collected the data from the Thomson Reuters Eikon database, sustainability reports and annual reports. A multiple regression analysis was performed to test the hypotheses.
Findings
The finding of this study confirms a positive and significant relationship between audit quality and integrated reporting. It is also found that environmental auditing has a positive and significant effect on integrated reporting. Thus, this study found a positive and significant relationship between environmental auditing and audit quality.
Practical implications
The findings in this paper identify strategies for improving integrated reporting as a crucial element in the processing of financial and nonfinancial information, to help managers and investors and shareholders take a long-term perspective. Therefore, the results encourage companies to invest in economic, environmental and social aspects. This enables accounting professionals, stock exchange authorities and users of environmental and social information to be aware of the factors associated with environmental reporting, to improve the efficiency of those producing the audit service.
Originality/value
The originality of this study lies in its consideration of a particular aspect of auditing, namely, environmental auditing. However, despite the large body of research on auditing and integrated reporting, to the best of the author’s knowledge, this is the first study to examine the relationship between environmental auditing and integrated reporting. Furthermore, in this research, the author has emphasized the importance of the role played by environmental auditing on audit quality. This design has been neglected in previous studies. Finally, the choice of the field of investigation for the reliability of the data used and the generalization of the results obtained, enables us to make important contributions to the user of the information.
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A.H. Fatima, Norhayati Abdullah and Maliah Sulaiman
The purpose of this study is to investigate the environmental disclosure (ED) quality of public-listed companies (PLCs) in environmentally sensitive industries (ESI) in Malaysia…
Abstract
Purpose
The purpose of this study is to investigate the environmental disclosure (ED) quality of public-listed companies (PLCs) in environmentally sensitive industries (ESI) in Malaysia in 2005 and 2009 (two years before and two years after the mandatory corporate social responsibility (CSR) requirement of Bursa Malaysia (BM)). BM (The Stock Exchange of Malaysia) has made CSR, including ED in annual reports mandatory since 2007. This study compares environmental reporting (ER) before and after the 2007 mandatory reporting requirement to determine if this command and control mechanism has had any effect on the quality of ED.
Design/methodology/approach
The quality of ED was measured using a disclosure quality index adapted from various prior studies. The index consists of a total of 46 disclosure items grouped into 9 categories. Content analysis was utilized to extract data from the annual reports of 164 PLCs in ESI.
Findings
Overall, the quality of ED improved in 2009 from that of 2005. More importantly, companies disclosed more quantitative environmental information in 2009 than in 2005. However, the average quality of ED was still low in 2009 compared to the overall potential score. Results provide some support for legitimacy as well as institutional theories.
Research limitations/implications
The sample of the study consisted of listed companies in ESI only; the results cannot be generalized to other companies in non-environmentally sensitive sectors.
Practical implications
Prior studies that used data before the mandatory CSR requirement by BM found ED in annual reports mainly declarative in nature, generally low on quality and with little quantifiable data. The results of the present study provide evidence of the positive impact of mandatory environmental reporting on ED quality.
Originality/value
The use of a multi-theoretical perspective may offer a more meaningful explanation of ER behavior in Malaysia. The results of the study would provide the impetus for regulatory agencies in developing countries to perhaps consider legislating ER. The findings provide some evidence to support the influence of legitimacy and institutional factors behind improved ED of Malaysian PLCs. This outcome exhibits a positive influence on the government efforts in promoting sustainability. Finally, the study contributes to present a more up-to-date account of environmental commitment undertaken by Malaysian corporations through their environmental reporting, after the CSR mandatory listing requirement took effect in 2007.
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Panayis Pitrakkos and Warren Maroun
This paper aims to examine the differences in quality and quantity of disclosures dealing with greenhouse gas emissions among companies with a relatively large or small carbon…
Abstract
Purpose
This paper aims to examine the differences in quality and quantity of disclosures dealing with greenhouse gas emissions among companies with a relatively large or small carbon footprint. It also considers whether disclosures are being included in the primary report to stakeholders (an integrated report) or in a secondary source (a sustainability report).
Design/methodology/approach
A comprehensive carbon disclosure checklist was constructed based on professional and academic literature to identify and categorise carbon disclosures. Quality is gauged according to a multi-dimensional assessment derived from prior research based on density of reporting, disclosure attributes, management orientation, integration of information, ease of analysis, reporting on strategy, use of independent assurance and repetition. A content analysis is used to gauge the quantity and quality of carbon disclosures of 50 companies listed on the Johannesburg Stock Exchange. Differences in the quantity and quality scores of high- and low-carbon companies are tested using a Mann–Whitney U test.
Findings
Carbon disclosures are used as part of a legitimacy management exercise. This involves not just the use of additional environmental disclosure to placate stakeholders as environmental impact grows. The quality of reporting and location of disclosures are, perhaps, more important for understanding how companies are responding to stakeholder expectations for reporting on carbon emissions and climate change.
Practical implications
Despite mounting scientific evidence on the risks posed by climate changes, companies remain reluctant to commit to high-quality reporting on specific steps being taken to reduce carbon emissions. Even when disclosures are being targeted at key stakeholders, the possibility of impression management remains. It may, therefore, be necessary to have carbon reporting regulated and independently assured. More guidance on how companies should be managing and reporting on carbon emissions and climate change may also be required.
Social implications
Despite mounting scientific evidence on the risks posed by climate changes, companies remain reluctant to commit to high-quality reporting on specific steps being taken to reduce carbon emissions. Even when disclosures are being targeted at key stakeholders, the possibility of impression management remains. It may, therefore, be necessary to have carbon reporting regulated and independently assured. More guidance on how companies should be managing and reporting on carbon emissions and climate change may also be required.
Originality/value
The study merges the traditional approach of focusing on the quantity of disclosures to illustrate the application of legitimacy theory in a sustainability/integrated reporting setting with less-seldom-studied quality and location of reporting. This result provides a more nuanced perspective of how carbon disclosures are being used to manage stakeholders’ reporting expectations.
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Abdullah Hamoud Ismail, Azhar Abdul Rahman and Abdulqawi Ahmed Hezabr
This study aims to identify factors that influence corporate environmental disclosure (CED) quality.
Abstract
Purpose
This study aims to identify factors that influence corporate environmental disclosure (CED) quality.
Design/methodology/approach
Using content analysis, an index and scoring scheme were applied to annual reports, stand-alone reports and corporate homepages of a sample of 116 oil and gas companies in 19 developing countries (DCs).
Findings
The results of this study reveal that out of 12 hypothesized variables, only 5 variables (company size, foreign ownership, profitability, leverage and membership of industry’s associations) are positively related to the CED quality.
Practical implications
The study has implications in enhancing the understanding of CED practices by oil and gas companies in DCs and the factors that influence the quality of such disclosure. Thus, the results of the study serve as input toward the development of improved regulations concerning CED for the oil and gas industry and provide guidelines to the regulators to make relevant decisions on social and environmental information items to be incorporated in the regulatory standards.
Originality/value
The current study attempts to fill the gaps in the literature by examining CED quality (rather than its quantity), concentrating on environmental disclosure made on the three main mediums of reporting. The study also extends previous research of CED by investigating some factors that have the potential to influence the content-quality of environmental disclosure, such as type of company (independent or constrain company) and industry’s association membership which have never been examined in the related literature.
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The objective of this study was to investigate the quantity and quality of voluntary environmental disclosures in the annual reports of firms listed by market capitalisation on…
Abstract
The objective of this study was to investigate the quantity and quality of voluntary environmental disclosures in the annual reports of firms listed by market capitalisation on the Australian Stock Exchange. The periods examined were those immediately prior and subsequent to the release of the Exposure Draft Coalition for Environmentally Responsible Economics (CERES) Global Reporting Initiatives (GRI) issued in March 1999. Using content analysis to focus on the environmental aspects, the study compared 425 annual reports over a two‐year period and 60 environmental reports, in order to explore reporting practices in the periods surrounding this intervention. The results suggest a trend to triple‐bottom reporting, and a significant change in the quality and quantity of environmental information, albeit in specific categories.
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Yingjun Lu, Indra Abeysekera and Corinne Cortese
This paper aims to examine the influence of corporate social responsibility (CSR) reporting quality and board characteristics on corporate social reputation of Chinese listed…
Abstract
Purpose
This paper aims to examine the influence of corporate social responsibility (CSR) reporting quality and board characteristics on corporate social reputation of Chinese listed firms.
Design/methodology/approach
Firms chosen for this study are drawn from a social responsibility ranking list of Chinese listed firms. The social responsibility rating scores identified by this ranking list are used to measure the social reputation of firms studied. The model-testing method is used to examine hypothesised relationships between CSR reporting quality, board characteristics and corporate social reputation.
Findings
The results indicate that CSR reporting quality positively influences corporate social reputation but chief executive officer/chairman duality as a measure of board characteristics has a negative impact on corporate social reputation. Firm’s financial performance and firm size also positively influence corporate social reputation.
Research limitations/implications
The relatively small sample of firms for a cross-sectional study, and the proxies constructed for various concepts to empirically test hypotheses can limit generalising findings to firms outside the social responsibility ranking list. Future studies can undertake longitudinal analysis and compare socially responsible firms with others to expand empirical findings about corporate social reputation.
Originality/value
This paper investigates the influences of CSR reporting quality and board characteristics on corporate social reputation in the context of a developing country, China.
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