Corporate Social Responsibility and Environmental Management · 2014 · 246 citations · 52 references
Environmental PerformanceCorporate TransparencyEngineeringIntegrated ReportingEnvironmental Impact AssessmentSustainable DevelopmentStakeholder AnalysisEnvironmental PolicyDisclosure ToneSustainability AccountingManagementSound Environmental PoliciesEnvironmental ManagementAccountingEnvironmental Disclosure ToneCorporate Social ResponsibilityEnvironmental AccountingCorporate GovernanceNon-financial ReportingBusinessEnvironmental ReportingSocial Responsibility
The study examines whether environmental reporting functions as a transparency tool or a manipulation tool for stakeholder perceptions. The authors analyze how disclosure tone relates to future environmental performance and how board monitoring and stakeholder orientation shape this relationship. They find that positive disclosure tone signals future environmental performance, that boards with stakeholder orientation enhance transparency, and that these insights aid investors and policymakers in interpreting managers' language. © 2014 John Wiley & Sons, Ltd and ERP Environment.
Abstract We study whether environmental reporting serves as a transparency tool to communicate sound environmental policies to stakeholders or rather as a manipulation tool of stakeholders' perceptions. In particular, we focus on the relationship between environmental disclosure tone and future environmental performance and we furthermore explore the role of the board of directors' monitoring and stakeholder orientation in shaping this relationship. Using a sample of 288 US oil and gas firms, we find that the bias towards positive language does not reflect purely opportunistic managerial reasons, but rather is a transparency tool to signal future environmental performance. In addition, we document that the stakeholder orientation of the board plays a transparency role in communicating the firm's superior performance. Our findings contribute to the debate on whether discretionary strategies in environmental reporting are more about increased transparency or about stakeholder manipulation. Moreover, they help investors and policymakers to interpret managers' language choices. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment.
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