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In 2009, Newsweek published a report in which they ranked the 500 largest US companies and the 100 largest global companies based on its environmental performance measures (http://greenrankings2009.newsweek.com/). This ranking is referred to as Newsweek’s Green Ranking. Included in this ranking is information about water and air pollution, solid waste disposal, toxic wastes, carbon emissions, and enforcement actions. The question we are addressing in this study is how well it measures pollution performance? The question is relevant to environmental accounting/reporting since it is part of a dilemma yet to be answered: Aggregated environmental indices/scores are easy for average information users to percept, while specific information may not be preserved when it is aggregated into the overall score(s).

Specifically, we examine whether Newsweek’s Green Ranking is correlated with pollution measures based on Toxics Release Inventory (TRI) in order to determine how valid or reliable Newsweek’s Green Ranking is – in other words, how much Newsweek’s Green Ranking can explain the pollution by the toxic releases. We find that there is no significant correlation between Newsweek’s Green Ranking and the TRI measures except for the firms in the utilities industry. Concluding that on one measure, which we consider a very important one, there is no justification for the overall Green Ranking Score presented by Newsweek. However, in Newsweek’s three-part score the element that is termed the Environmental Impact Score captures pollution performance measured based on TRI. The contrast between the overall ranking and performance ranking indicates that a composite index that incorporates hard performance and soft measures can dilute the information carried by performance data.

The purpose of this paper is to provide a reflection on our time of creating and editing AEAM. Our planet is and will continue to experience some environmental turmoil in the future. Accounting educators and the professionals need to determine how they can contribute to abating the environmental consequences of past and present political and economic decisions that have placed the planet in this perilous state. The volumes we produced included articles discussing accounting’s role in assessing and reporting on environmental conditions and some suggest how accounting can contribute to alleviating some of these problems. The reflections we provide are our understandings of the contributions that the works in the first five volumes of the series have made in advancing the discussion in the field of environmental accounting. As editors we have a unique view of these contributions.

In February 2010, the US Securities and Exchange Commission (SEC) issued an interpretive release clarifying the information that registrants should disclose about climate change in their annual filings. Based on the industries the European Union targeted for its cap-and-trade carbon trading mechanism, this study investigates climate change disclosures for Fortune 500 firms operating in these same sectors. Using an equal-weighting scheme for content analysis of Form 10-Ks from 136 firms, we completed a comparative analysis on the extensiveness of climate change disclosures for the pre- and post-periods surrounding the SEC pronouncement. We observed a statistically significant increase in the disclosure of information related to climate change in 2010 compared to 2008, but no similar effect when comparing 2010–2009 reporting. There was a significant disclosure increase in 2009 compared to 2008. We conclude – based on a hypothesized anticipation of the SEC actually mandating climate change information in filings – that firms augmented their disclosures during 2009 in advance of the official guidance being published. This is a rather significant outcome given the historical lack of environmental disclosure subsequent to previous SEC mandates.

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.

This chapter evaluates whether disclosures on global warming by companies from the European Union are more extensive than disclosures by Japanese and Canadian firms. The study is based on disclosures made on websites, annual reports, social, environmental and sustainability reports and on a questionnaire developed by the Carbon Disclosure Project by 282 of the largest firms from these countries. Content analysis is utilized to asses their disclosures. The results indicate that the EU firms make significantly less global warming disclosures than firms from Japan or Canada. We also find no relation between the changes in carbon emissions and global warming disclosures indicating that these disclosures do not truly reflect emission performance. These findings suggest that the EU requirements of reducing GHG pollution have not improved GHG disclosures. Regulatory disclosure requirements may be the answer to improve disclosures.

This research provides accounting-ethics authors and administrators with a benchmark for accounting-ethics research. While Bernardi and Bean (2010) considered publications in business-ethics and accounting’s top-40 journals this study considers research in eight accounting-ethics and public-interest journals, as well as, 34 business-ethics journals. We analyzed the contents of our 42 journals for the 25-year period between 1991 through 2015. This research documents the continued growth (Bernardi & Bean, 2007) of accounting-ethics research in both accounting-ethics and business-ethics journals. We provide data on the top-10 ethics authors in each doctoral year group, the top-50 ethics authors over the most recent 10, 20, and 25 years, and a distribution among ethics scholars for these periods. For the 25-year timeframe, our data indicate that only 665 (274) of the 5,125 accounting PhDs/DBAs (13.0% and 5.4% respectively) in Canada and the United States had authored or co-authored one (more than one) ethics article.

This research investigates whether authoritative guidance regarding financial statement disclosures is incorporated into practice as envisioned by the promulgating body. Such assimilation is important from the standpoint of corporate accountability reporting as well as development of greater transparency in the extant accounting model. Specifically, we empirically test whether American Institute of Certified Public Accountants Statement of Position 96-1 led to improved reporting of environmental remediation costs and liabilities.

A repeated-measures design was used to assess the level of disclosure by 126 large U.S. firms, each of which had been identified by the Environmental Protection Agency as being potentially responsible for the cost of cleanup efforts at multiple Superfund sites. By performing a content analysis of the pre- and post-issuance annual reports of these companies, a disclosure score was derived for each. Comparison of disclosures in the two fiscal periods following the effective date of this new guidance with the pre-issuance reporting shows no overall enhancement or improvement in either the level or quality of disclosures. We conclude that when viewed from the perspective of the two years subsequent to its effective date the promulgation of this additional authoritative reporting and display guidance did not attain the espoused objective.

We investigate the state of environmental financial reporting since the increased regulation imposed by the Securities and Exchange Commission and other regulatory bodies during the 1990s by examining mandatory environmental disclosures for a sample of petroleum firms. Our results indicate that while the majority of firms stated that they accrued remediation liabilities and environmental exit costs, only about half or less of these firms disclosed the amount of the accrual, even though disclosure is required if the amount is material. Consistent with prior research, we find that cross-sectional variation in disclosure is positively related to firm size and financial leverage. Our results show that environmental disclosures increased during the 1990s, concurrent with increased regulatory pressure and corresponding threats to oil companies’ legitimacy. Firms’ disclosure levels in 1998 were strongly related to their disclosure levels in 1989 –i.e., those companies that reported more (less) information in 1989 did the same in 1998. Thus, individual firms appear to have distinctive environmental disclosure policies.