Journal of Environmental Management 145 (201 (2014) 4) 357e 357e367
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Journal of Environmental Management j o u r n a l h o m e p a g e : w w w . e l s e v i e r . co co m / l o c a t e / j e n v m a n
The relationship between corporate environmental performance and environmental disclosure: An empirical study in China X.H. Meng a d , S.X. Zeng a * , Jonathan J. Shi b , G.Y. Qi c, Z.B. Zhang d ,
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a
Antai School of Management, Shanghai Jiaotong University, 535 Fahuazhen Road, Shanghai 200052, China College of Design, Construction and Planning, University of Florida, Gainesville, FL 32611 e5703, United States c School of Business, East China University of Science and Technology, Shanghai 200237, China d School of Politics and Public Administration, Soochow University, Suzhou 215123, China
b
a r t i c l e
i n f o
Article history: Received 14 October 2013 Received in revised form 5 February 2014 Accepted 7 July 2014 Available online 9 August 2014 Keywords: Environmental Environmental disclosure Environmental Environmental performance Listed companies China
a b s t r a c t
Based on a content analysis of 533 Chinese listed companies, this study examines how corporate environmental performance affects not only the level of detail of a company's environmental disclosures, but also what information is disclosed. The results show that (1) both poor and good performers have more disclosure than the median (i.e., mixed ) performers, which provides empirical evidence to support a nonlinear relationship between corporate environmental environmental performance and environmental disclosure; (2) poor performers disclose more soft information on environmental performance than good performers, and good performers performers disclose disclose more solid information; information; and (3) although poor performers performers increase increase disclosure after being exposed as environmental violators, they avoid disclosing negative environmental information, such as the violation and the associated penalties. This study provides additional evidence for a nonlinear relationship between environmental performance and disclosure in emerging markets, and suggests environmental disclosure may not be a valid signal to differentiate good performers from poor performers in contemporary China. © 2014 Elsevier Ltd. All rights reserved.
1. Introduction As the general general public public worldwid worldwide e becomes becomes more concerned concerned about the environment, there is increasing demand for rms to disclose more information relevant to their performance in this area to demonstrate the extent to which they are ful lling their environmental responsibilities (Cho (Cho et al., 201 2010; 0; Criad Criado-Jim o-Jimenez enez et al., 2008; Delmas and Toffel, 2008; Evans et al., 2009). 2009). One of the most important issues affecting a rm's environmental information disclosure (EID) is the relationship between this disclosure and the rm's potentia potentiall environme environmental ntal performan performance ce (Clarkson et al., 2008). 2008). The topic has drawn broad interest from both practitioners and academics (Dawkins ( Dawkins and Fraas, 2011a; Hughes et al., 2001;; Patten, 2001 Patten, 2002 2002). ). Studie Studiess of the corpo corporat rate e enviro environme nmenta ntall performan performance-E ce-EID ID relationsh relationship ip show mixed mixed results results (Al-Tuwaijri et al., 2004; Clark Clarkson son et al., 2011; 2011; Fre Freedma edman n and Wasley, Wasley, 1990; Ingram Ingr am and Fr Frazier azier,, 19 1980; 80; Wang et al., 2004; Wisem Wiseman, an, 1982 982). ). During During the last last two two decade decades, s, enviro environme nmenta ntall degrad degradatio ation n resulting from rapid economic growth has become an increasing concern in China (Li (Li et al., 2008; Zeng et al., 2010, 2012; Zhu et al., * Corresponding
author. Tel.: þ 86 21 52302563; fax: þ 86 21 62932577. 62932577. E-mail address: zengsaixing@sjt
[email protected] u.edu.cn (S.X. (S.X. Zeng).
http://dx.doi.org/10.1016/j.jenvman.2014.07.009 0301-4797/ © 2014 Elsevier Ltd. All rights reserved.
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2013). 2013 ). The issue issue has attra attracte cted d intern internati ationa onall attent attention ion in the wake wake of high-prole incidents such as the blue-green algae at Tai Lake in Wuxi, the arsenic pollution in Hunan in 2007, and acidic waste water containing copper discharged by the listed company Zijin Mining in Fujian in 2010 (Xu (Xu et al., 2012), 2012), which have pushed the issue of Chinese corporate environmental disclosure to the fore. In recent years, the Chinese government has published several regulations to compel rms to implement EID.1 More and more listed rms have begun to disclose environmental information in their annual annual report reports, s, som some e even even prod produci ucing ng a sep separa arate te public publicatio ation n covering their practices in this area (Liu ( Liu et al., 2010; Park et al., 2010). 2010 ). With With respe respect ct to Chines Chinese e rms' EID behaviors behaviors,, some authors have examined the effects of organizational characteristics (e.g., industrial industrial sector, sector, size, and ownership ownership)) and external external stakeholders (e.g., government, shareholders, creditors, and community groups) on corporate EID (Dong ( Dong et al., 2011; 2011; Li et al., 2008; Liu and Anbumo Anb umozhi zhi,, 2009 2009;; Xu et al. al.,, 20 2012 12;; Zen Zeng g et al. al.,, 20 201 10, 20 2012 12). ). However However,, 1 Including the Bulletin on Disclosure of Environmental Performance by SEPA in 2003, Environmental disclosure rules by SEPA in 2007, Instruction of strengthening supervision on environmental protection of listed companies by SEPA in 2008, and Guide to environmental information disclosure for listed companies by Shanghai Stock Exchange in 2008.
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an important question arises: what is the relationship between a corporate entity's potential environmental performance and EID in China? We conduct three consecutive empirical analyses that address this question: (1) to examine the relationship between the level of EID and corporate environmental performance; (2) to compare the disclosure contents between groups of rms with different levels of environmental performance; and (3) to examine the change of disclosure behavior of the environmental violators after their violations were exposed. This paper aims to provide some useful insights into environmental disclosure among Chinese rms, and to help develop a theory to explain companies' disclosure behaviors in emerging markets. We evaluate the environmental disclosures of 533 Chinese listed companies (48 poor, 80 good, and 405 mixed performers) across nine industries in 2009 and 2010 in order to examine how a rm's environmental performance affects not only the level of detail (that is, the amount) of its EID, but also the content of what is disclosed. Our ndings show that both good environmental performers (based on Ministry of Environment of China designation or the meeting of various performance criteria) and poor environmental performers (rms with environmental violation events) have higher levels of environmental disclosure (measured using a content analysis scheme) than companies whose performance is classied as mixed. The results also reveal the different disclosure contents (e.g., more soft information by poor performers and more solid information by good performers) at the two ends of environmental performance, and show that poor performers tended not to disclose negative information (although both types demonstrated signi cantly higher EID in 2010 than in 2009), even after exposure by the environmental authorities and the media. This article contributes to the literature in several ways. Firstly, it reveals a nonlinear (rather than negative or positive) relationship between environmental performance and EID in an emerging economy, which is different from most previous ndings in developed countries. Secondly, moving the focus of enquiry beyond the simple level of disclosure, this study documents that the nonlinear relationship is actually caused by different disclosure contents or patterns at the two ends of environmental performance, which suggests that the traditionally competing linear theoretical explanations (namely the legitimacy and voluntary disclosure theories) need not be mutually exclusive, but can in fact be integrated to explain the disclosure behaviors of Chinese listed companies. Thirdly, the study uses a difference-in-differences estimation approach and discovers that while the level of EID for poor performers increased, little relevant negative/sensitive informationwas disclosedby companies, even after their environmental violations had been exposed. This nding presents researchers and external stakeholders with a challenge as to how to differentiate good performers from poor, since poor performers can easily imitate the disclosure behavior of good ones. The remainder of this article is organized as follows. The next section summarizes the literature, while section three presents the hypotheses. Section four describes the methodology and data collection, and the ndings are presented in section ve, followed by a summary and discussion. “
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2. Previous work A large number of studies have already examined the relationship between environmental performance and EID using various sample sizes and methodologies. However, previous research on the environmental performance-EID relationship has yielded mixed results. By comparing the content analysis ratings of EID in annual reports with environmental performance ratings obtained from the
Council on Economic Priorities (CEP), Ingram and Frazier (1980) showed that there was no association between environmental performance and EID. After studying the 26 largest CEP-rated companies in the US, based on an EID index comprising 18 items across four categories, Wiseman (1982) obtained the same results. Freedman and Wasley (1990) examined 49 CEP-rated companies and found that neither the annual report nor the 10-K environmental report was indicative of a rm's actual environmental performance. Patten (2002) argued that these studies failed to document any signicant relationship because of methodological shortcomings such as small sample sizes, inadequate environmental performance measures, and failure to control for rm size and industry sector. By normalizing the Toxic Release Index (TRI) by sales as a proxy for environmental performance for a sample of 131 US rms across 24 different industries, Patten (2002) generated a modied Wiseman index and demonstrated a negative relationship between environmental performance and EID. Hughes et al. (2001) examined differences in the environmental disclosures of 51 US manufacturing rms classied as good, mixed, or poor environmental performers by CEP. They reported a higher level of disclosure for poor performers. By contrast, however, some researchers have found a positive association between environmental performance and disclosure. Al-Tuwaijri et al. (2004) conducted a content analysis of environmental disclosure in four categories: potential responsible parties' designation, toxic waste (such as oil and chemical spills), environmental nes and penalties, and environmental performance based on TRI estimates of total recycled waste. They concluded that environmental performance is positively associated with EID. Clarkson et al. (2008) developed a content analysis index based on the GRI sustainability guidelines (2002) with a proxy for environmental performance using two TRI measures (TRI/sales and percentage of waste recycled). They showed that good performers disclosed more environmental information, based on a sample of 191 US rms in ve high-polluting industries (pulp and paper, chemicals, oil and gas, metals and mining, and utilities). Furthermore, using a similar measure of environmental performance, Clarkson et al. (2011) identied a positive relationship with environmental disclosure in 51 Australian rms. Dawkins and Fraas (2011a) studied a sample of the Standard & Poor (S&P) 500 rms included in Ceres' Carbon Disclosure Project of 2007. They evaluated environmental performance using the 2005 Kinder, Lydenberg, and Domini (KLD) ratings. EID was classied on three levels: (a) none, (b) partial, and (c) full disclosure. Using an ordinal regression, they reported a curvilinear environmental performance-EID relationship, which indicated that both superior performers and inferior performers disclosed more environmental information. While these studies have shed some light on the environmental performance-EID relationship from North American, Australian, and European perspectives, there is, to our knowledge, a paucity of studies examining the linkage between environmental performance and EID in emerging markets, especially investigating what content is disclosed and the difference therein between poor and good performers, as well as the response of poor performers after being exposed as environmental violators. This article is one of the few empirical studies in emerging markets using a large research sample, which provides the evidence needed to help developing countries, such as China, the largest developing economy in the world, draft relevant EID regulations. 3. Theories and hypothesis development As stated by the legitimacy theory, social disclosure is a reaction to the pressure exerted by institutional and public stakeholders (Magness, 2006). Firms whose environmental performance is poor
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face greater political and social pressures, which threaten their legitimacy. Hence, they are expected to provide more extensive offsetting or positive EIDs in their annual reports to external stakeholders (Cho and Patten, 2007). EID can be used as a tool to meet the increasing demand of stakeholders to legitimize the existence of the business despite environmental concerns (Fallan and Fallan, 2009; Patten, 2002). Legitimacy theory is based on perception. Any response from management must be accompanied by disclosure in order to change external views of the organization (Magness, 2006).Ifa rm suspects that its legitimacy is, or might be, threatened, it has an incentive to increase its EID in order to (1) educate and inform relevant public stakeholders about (actual) changes in performance; (2) change perceptions of the organization; (3) deect attention from the issue of concern by highlighting other accomplishments; and (4) seek to change public expectations regarding its performance (Lindblom, 1994; Patten, 2002). The voluntary disclosure theory, on the other hand, suggests that a rm with superior environmental performance will be strongly motivated to keep investors and other stakeholders informed by voluntarily disclosing more environmental information and hence differentiating itself from poor environmental performers (Clarkson et al., 2008). For such rms, conveying good performance can help improve their public image and reputation (Guthrie and Parker, 1990), build brand competitive advantage (Waddock and Graves, 1997), and win governmental support related to environmental protection (Liu and Anbumozhi, 2009; Zeng et al., 2010 Zhang et al., 2011). This last point is especially salient in China, where the government offers incentives such as environmental awards, renancing convenience, tradable permits, and a green credit policy. Such disclosure efforts may therefore be expected to lead to the rm outperforming its peers in terms of prot (Russo and Fouts, 1997). Legitimacy theory predicts a negative association between environmental performance and disclosure, while the voluntary disclosure theory predicts that this relationship will be positive. Most studies have regarded these theories as offering competing perspectives. However, between the extremes of good and poor performers, there are many mixed or average performers. These rms tend to meet basic performance disclosure expectations, since disclosure presents a low threat to their environmental legitimacy, while they have little to gain by highlighting their environmental performance. Therefore, it would not be surprising to see a phenomenon whereby poor performers disclose more than average performers (consistent with legitimacy theory), and good performers disclose more than average performers (consistent with the voluntary disclosure theory). Hence, we propose the following hypothesis: H1. Both good performers and poor performers have higher levels of EID than mixed performers. Both the legitimacy and voluntary disclosure theories predict an association between environmental performance and EID, but the reasons for such disclosure are different. This may result in a difference in the content of the information released by rms. If good performers can successfully convey their high performance by disclosure, as predicted by the voluntary disclosure theory, they are likely to provide credible information by adopting a form of objective and veriable EID (Clarkson et al., 2008). Conversely, a poor performer's legitimacy may be threatened by EID and hence its goal, based on legitimacy theory, may be to make a self-serving disclosure; if so, it may disclose more information, with the intention of changing public perception of its environmental performance, but the claims it makes will be less readily veriable (Clarkson et al., 2008, 2011). Therefore, the two theories imply
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differences in the content of EID. This leads to the following hypothesis: H2. Good and poor performers will exhibit different patterns of environmental disclosure. In this study, rms who have been involved in environmental violations are classied as poor performers. We also investigate whether such rms increase their EID after their violations have been exposed by the environmental authorities and media, and whether they disclose full and true information (such as the penalty, consequences and treatment of environmental events, and levels of excess pollutants) in their annual reports. Poor performers are expected to be subject to greater exposure to potential public and regulatory scrutiny. Studies show that rms with greater environmental exposure, and thus greater public visibility, may make higher disclosure (Al-Tuwaijri et al., 2004; Bewley and Li, 2000; Dawkins and Fraas, 2011a, b). Environmental violation affects the level of external pressure and adds the risk of a rm being adversely affected by stakeholders. It is therefore assumed that poor performers will disclose more environmental information to meet the higher expectations of their stakeholders. If a rm needs to relieve external pressures stemming from an environmental incident, it is likely to be more willing to discuss that incident (Bewley and Li, 2000). Hence, after an environmental violation, a rm may be expected to increase its EID, including details of its actual environmental performance, negative/sensitive environmental information, and corresponding positive organizational actions. Therefore, we present further hypotheses: H3a. A poor performer will disclose signicantly more relevant negative/sensitive environmental information after a violation has been exposed. H3b. A poor performer will increase its environmental disclosure more than others after a violation has been exposed.
4. Methodology 4.1. Data collection and sampling Studies seeking to assess environmental performance are constrained by data availability (Clarkson et al., 2011). Many studies have typically reliedon the TRI database, which focuses on negative outcome measures (see for example Al-Tuwaijri et al., 2004; Clarkson et al., 2008; Patten, 2002), the CEP environmental performance ranking (see for example Freedman and Wasley, 1990; Hughes et al., 2001; Ingram and Frazier, 1980; Wiseman, 1982), or the KLD social performance rating (see for example Cho et al., 2006; Cho and Patten, 2007; Dawkins and Fraas, 2011a). TRI, CEP, and KLD contain data only on US rms, which is why very little work has been done on the relation between environmental performance and environmental disclosure in other countries. Therefore, a key research design issue in this study is to measure environmental performance in the Chinese setting. Due to the lack of data from China, we address this challenge with a methodology similar to CEP to rank the environmental performance of the selected companies in three categories 2: poor,
2
Environmental performance is de ned as: (a) Poor: the company has a poor public record or signi cant violations, major accidents, and/or a history of lobbying against sound environmental policies; (b) Mixed: a mixed record: some positive programs such as use and encouragement of recycling, alternative energy sources, waste reduction, etc. Problems such as accidents, regulatory infractions, nes, complaints, etc. ; and (c) Good: positive programs, such as use and encouragement of recycling, alternative energy sources, waste reduction, etc. A record relatively clear of major regulatory violations (CEP, 1991, p.72; Hughes et al., 2001). “
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mixed, and good. We will not only compare the disclosure practices of poor and good performers but also examine the possibility of a nonlinear relationship between environmental performance and EID. In this study, rms were selected from those listed on the Chinese stock exchange. Poor performers were identi ed from details of environmental violation events (EVEs). The Ministry of the Environment of China (MEC) publishes a monthly list of companies that have failed to comply with national environmental laws and regulations. This list contained a total of 45 listed companies for the period April to November 2010 (Xu et al., 2012). Another three listed companies that had substantial penalties imposed were identied on major websites in 2010 in China. 3 Of the 48 sampled 4 rms, 11 had potential environmental risks and 37 had caused serious water or gas pollution. The companies with poor environmental performance fall into nine industry categories (see Table 1).5 Studies on environmental disclosure show that industry type is an important variable in multiple-industry analyses (see for example Bewley and Li, 2000; Clarkson et al., 2008, 2011; Cormier and Gordon, 2001; Dawkins and Fraas, 2011a; Patten, 2002; Li and Zhang, 2010; Zeng et al., 2010, 2012). In order to establish peer groups for poor performers in corresponding industries, other listed rmswere selected and matched with the nine sectors included here. All rms were pre-screened according to the following two criteria: (1) deleting listed companies subject to Special Treatment (ST) and Particular Transfer (PT) due to continuous losses over the past two years, to avoid selecting a company with abnormal nancial status; (2) including only listed companies which had gone public before December 31, 2007, to avoid the windowdressing effect at the early stages of going public. A total of 485 companies passed the pre-screening process in addition to the 48 poor performers and were further categorized into good and mixed performers. The good performers were identi ed based on a set of criteria: (1) the rst group of good performers were those rms that had been authenticated as environmentally friendly enterprise6 by the MEC and then had no record of environmental violation; and (2) the second group of good performers were those that met all of the ve indexes or criteria: “
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(1) Not listed as severe polluting enterprises by the MEC; (2) Not publicly exposed by the media as having had environmental accidents, regulatory infractions, nes, or complaints; (3) Not having documented levels of pollutant emissions beyond the limits of existing laws and regulations;
3
The ve main websites in China include sohu.com, sina.com, 163.com, qq.com, and xinhuanet.com. 4 Potential environmental risks refer to: (a) a rm that has no effective environmental protection measures for when pollutant emission has reached the maximum allowable level under the law; (b) a rm has no feasible plan to improve seriously degraded facilities although its pollutant emission currently conforms to the regulations (Xu et al., 2012). 5 Using the industry classi cation codes issued by the China Securities Regulation Commission in 2001. 6 The honor of National Environmentally Friendly Enterprise, assessed by the MEC, is granted to those rms that carry out cleaner production, utilize resources reasonably, and adopt advanced environmental techniques, thereby achieving low resource consumption and environmental pollution. They are typically rms complying with environmental laws and achieving a win ewin of both environmental and economic performance. From 2004 to 2010, 93 rms have been granted this honor, 64 of which are listed and 38 fall into the nine industries included in our study.
Table 1 Sampled rms by industries. Industry
Poor
Mixed
Good
Food and drink Textiles, clothing, and fur Paper making and printing Petroleum, chemicals, and plastics Metal, non-metal smelting Medicine, biological products Agriculture Extractive industry (coal, non-ferrous metal, oil, and gas) Power, coal, gas, water production and supply Subtotal
4 1 2 13 9 4 3 9
44 48 14 110 86 79 8 7
8 8 7 21 18 5 0 8
3 48
9 405
5 80
(4) Having introduced ISO 14000 or another environmental management system; (5) Having won at least two environmental honors 7 at the provincial or national level.8 In China, a small number of environmentally friendly enterprises were granted honors each year, particularly involving listed companies, so the ve indexes of the latter group represent the main reference standards for evaluating China's environmentally friendliness. Of the ve indexes, the rst two say that rms had no major environmental risk or regulatory violations, the third index indicates that rms meet environmental emission requirements, the fourth index re ects that rms had routine environmental management systems in place, and the fth index of environmental honor shows that rms have better environmental performance. Thus, the ve indexes or criteria also accord with the de nition of the CEP category of good performers. As a result, 80 of the rms studied here fell into the category of good performers. The remaining 405 companies could be classi ed as mixed performers. The 533 companies selected in this study represent 35% of all rms listed on the Chinese stock market. Table 1 shows the sampled rms categorized in industry groups. Environmental information for each company was then abstracted from the following sources, which are the main and most reliable channels of environmental information relating to listed companies open to the public in China: (1) annual reports, (2) independent CSR or environmental reports, and (3) bulletins related to the environment. The reports and bulletins can be obtained from the website of the Shanghai and Shenzhen stock exchanges, and another website nominated by the China Securities Regulatory Commission,9 which provides a link for all Chinese listed companies and presents the full operation information that
7
Some examples of environmental honors awarded at the provincial or national level are: Outstanding Unit of Emission Reduction and Energy Saving; Honor of China Environmental Awareness Unit; One of Ten Leaders of Pollution Reduction, Henan Province; Industrial Circular Economy Demonstration Enterprise, Zhejiang Province; Environmentally Friendly Enterprise in the Chemical Fiber Industry; Honor of Green Project in Shanghai; Advanced Enterprise of Emission Reduction in the Coal Industry; China Green Company Hundred; and First China Green Gold Award, and so on. 8 Criterion 1 can be veri ed by the list of severe polluting enterprises released by the MEC (http://www.mep.gov.cn ); Criterion 2 was screened using the ve main websites in China (that is, sohu.com, sina.com, 163.com, qq.com, and xinhuanet. com); Criterion 3 was treated as met when a de nite statement of having reaching the environmental standards was included in the annual report; Criterion 4 was veried according to the Certi cation and Accreditation Administration of China (www.cnca.gov.cn); and Criterion 5 was checked against the environmental section in each rm's website. 9 See http://www.cninfo.com.cn/information/lclist.html. “
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should be disclosed for each company. Firms' nancial data and other relevant information were drawn from the CSMAR database.10
4.2. Dependent variable Corporate EID can be gauged by the content and degree of detail given in environmental disclosure (Beck et al., 2010; Bewley and Li, 2000; Cho and Patten, 2007; Hughes et al., 2001; Patten, 2002; Wiseman, 1982; Zeng et al., 2010). Some researchers have measured the content of EID based on a content analysis index (see for example Bewley and Li, 2000; Hughes et al., 2001; Patten, 2002; Wiseman, 1982). Others proposed environmental reporting frameworks using the GRI Sustainability Reporting Guidelines (see for example Clarkson et al., 2008, 2011; Liu and Anbumozhi, 2009). In order to use a disclosure-scoring methodology derived from content analysis, as has been extensively deployed to appraise levels of disclosure (Al-Tuwaijri et al., 2004), it is necessary to dene clearly what environment-related information comprises. Obviously, environmental disclosure regulations vary across countries (Darnall et al., 2010; Fallan and Fallan, 2009; Gray et al., 2001). In China, the rst regulation Environmental Disclosure Rules were issued by the China State Environmental Protection Administration (SEPA) in 2007.11 They require enterprises to disclose whether or not they have caused pollution and, if so, to report the remedial measures implemented. Drawing on the SEPA rules, in 2008 the Shanghai Stock Exchange also issued CSR guidelines encouraging listed companies to disclose more information involving investment and nance related to environmental protection. Liu and Anbumozhi (2009) proposed denitions of six items of environmental information relevant to Chinese listed companies by reviewing and comparing the reporting guidelines suggested by GRI and the SEPA rules. Zeng et al. (2010) developed a 10-item list of environmental disclosure items as identied by SEPA's 2007 rules and those of the Shanghai Stock Exchange in 2008. The MEC further published a new policy in 2010, Environmental Information Disclosure Guidelines for Listed Companies in China, which species the outline and detailed contents of annual environmental reports for all Chinese listed companies. In practice, more and more listed rms have begun to disclose environmental information according to the requirements of these national regulations. Based on these measurements and policies, we identi ed 43 items across eight categories to measure environmental information (see Appendix I). An indexing technique was employed to quantify the level of EID, using monetary- and nonmonetary-related environmental disclosure, as an effective tool to gauge level of disclosure (Bewley and Li, 2000; Cho and Patten, 2007). Each item was scored according to its level of disclosure, ranging between 0 and 3: 3 if the item was described in monetary or other quantitative terms; 2 if described speci cally; 1 if discussed in general; and 0 if no information was provided (see for example Al-Tuwaijri et al., 2004; Bewley and Li, 2000; Cho and Patten, 2007; Hughes et al., 2001; Wiseman, 1982; Zeng et al., 2010). Thus, each rm was scored by evaluating its total level of EID based on Equation (1):
SEIDi
¼
n X
I ij
(1)
j¼1
10 The database of CSMAR (China Stock Market Accounting Research) is administered by the China Accounting and Finance Research Center of Hong Kong Polytechnic University and Shenzhen GTI Financial Information Limited. 11 SEPA was the predecessor of the MEC prior to 2008.
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where SEIDi is the total score of EID for rm i; and I ij is the score of the jth item for rm i, inwhich j ¼ 1, 2, …, 43. Information disclosed in 2009 and 2010 for the 533 companies and the average scores of each item is presented in Appendix I. Note that each of the eight categories are scored separately and the average scores are calculated for poor, mixed, and good performers when we analyze the difference of disclosure structure for poor and good performers to test H 2. 4.3. Explanatory variables The independent variable here was environmental performance, which is divided into three types (that is, poor, mixed, and good). Mixed performers were set as the base group. Two dummy variables were dened for poor ( good) performers (1 if the rm has poor (good) environmental performance, 0 otherwise). In order to prevent the results from being driven by rms' heterogeneity, additional independent variables were also adopted as control variables to describe rm characteristics (Gray et al., 2001; Patten, 2002; Zeng et al., 2010, 2012). A rm's size has been shown to be positivelycorrelatedwith environmental disclosure(Boesso and Kumar, 2007; Patten, 2002). Larger rms generally face more public pressure and have more resources through which to achieve environmental protection. They are therefore more likely to disclose environmental information. In this study, size was measured by the natural logarithm of year-end total assets as a proxy variable ( Gray et al., 2001). Industry is also considered an important factor affecting EID (Bewley and Li, 2000; Cormier and Gordon, 2001), because pollution propensity and outside monitoring vary from industry to industry (Dawkins and Fraas, 2011a). To serve the needs of the nine industry sectors in this study, eight dummy variables were used, with the foodand drinkindustryas thebase group.If a company belonged to a certain industry, it was assigned a value of 1, and 0 otherwise (Cormier and Gordon, 2001). Another dummy variable was used to describe the ownership of a listed company to control for the type of controlling shareholders (that is, state- or non-state ownership). A state-owned rm is owned or controlled by central or local government by which it is supported (Liu and Anbumozhi, 2009). Studies show that state-owned rms engage in more EID to demonstrate their social responsibility (Zeng et al., 2010, 2012; Zhang et al., 2011). Ownership was a dummy variable (1 for a state-owned enterprise and 0 otherwise). Leverage and nancial performance were used to capture the nancial risk and availability of a company's nancial resources (Brammer and Pavelin, 2006; Karim et al., 2006). Leverage was measured as the ratio of a rm's total debt to its total assets, and nancial performance was measured as return on assets (ROA). The descriptive statistics of the explanatory variables and SEID, and the pairwise Pearson correlations between them, are reported in Table 2. 5. Results and analysis Table 3 reports the results of a multiple regression analysis testing the relationship between EID and environmental performance in 2010 (Sample A) and 2009 (Sample B). Table 3 indicates that the two models arehighlysignicant, with F-statistic values of 32.40 and 25.29, respectively. With respect to the model for 2010, the coef cient values of the variables Poor Per formers (14.29) and Good Performers (18.93) are both statistically signicant at the 0.001 level, suggesting that both poor and good performers disclosed more environmental information than mixed performers. Moreover, the F test rejected the hypothesis of the equityof two coef cient values of Poor Performers and Good Performers at the 0.05 level, which also shows that good performers disclosed signicantly more environmental information than poor ones.
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Table 2 Descriptive statistics and pairwise correlations of continuous variables.
1. 2. 3. 4. 5. 6. 7.
SEID Poor Performers Good Performers Size Ownership ROA Leverage
Mean
SD
Min
Max
1
2
15.25 0.09 0.15 21.79 0.61 0.04 0.56
14.06 0.29 0.36 1.49 0.49 0.13 0.41
0 0 0 13.08 0 0.92 0.00
76 1 1 28.14 1 2.06 5.49
0.25 c 0.48 c 0.51c 0.24 c 0.01 b 0.08
3
4
5
6
c
0.13
c
0.27 0.12c 0.01 0.03
0.30c 0.07a 0.02 0.05
0.30c 0.02
c
0.13
a
0.07 0.03
c
0.19
a
p < 0.05; b p < 0.01; c p < 0.001.
This nding provides evidence to support the nonlinear relationship between environmental performance and EID. The data thus support Hypothesis 1. Sample B in Table 3 presents the results for 2009, the year before the MEC started publishing details of poor performers in the form of its list of rms that have committed environmental violations. To test the difference in disclosure content between poor and good performers (Hypothesis 2), Table 4 summarizes the disclosure scores across the eight categories and the pairwise differences across poor, mixed, and good performers in 2009 and 2010. Table 4 reveals that both poor and good performers disclosed signicantly more information than the mixed performers in every category in 2010. Of special interest is the structural difference between poor and good performers. Sample A in Table 4 shows that the difference in the sum of the average score of eight categories of 5.98 versus 6.48 is statistically signicant at the 0.05 level. For category I1, environmental values, policy, and organization, the average scores for good and poor performers are 1.70 and 2.04, respectively. This difference of 0.34 is signicant at the 0.05 level, suggesting that poor performers seek greater soft disclosure to legitimize their violations of environmental regulations and requirements (Patten, 2002). For categories I2, I4, and I5, the average scores for good performers are much higher than for poor performers, at 0.26, 0.16, and 0.27, respectively (all differences are signicant at the 0.05 level). This indicates that, relative to poor performers, good performers engage in signicantly more EID Table 3 Regression results for tests of the relationship between SEID and environmental performance. Variables
Poor performers Good performers Size Ownership ROA Leverage Industry effects Constant F-statistic Adj. R 2 N a
Sample A: year 2010
Sample B: year 2009
Coef cient estimate (Robust std. err.)
Coef cient estimate (Robust std. err.)
14.29 c (2.18) 18.93c (1.90) 2.38c (0.37) 3.19b (1.06) 2.60 (3.29) 0.23 (0.71) Controlled c 42.29 (7.91) 32.40 c 0.47 533
8.14c (2.23) 13.90c (1.70) 3.00c (0.39) 2.66b (0.95) 0.88 (1.79) 0.44 (0.65) Controlled c 54.78 (8.32) 25.29c 0.42 533
p < 0.05; b p < 0.01; c p < 0.001. The dependent variable is the level of SEID. Coef cients are estimated by OLS regression with robust (Eicker-Huber-White) standard errors(presentedin parentheses). F test fornullhypothesisof theequity of two coef cient valuesof Poor Performers andGoodPerformersin 2010 ( F (1, 517) ¼ 5.52, p ¼ 0.019)) and 2009 (F (1, 517) ¼ 9.10, p ¼ 0.003), respectively; the difference between these two values was statistically signi cant at the level of 0.05.
about environmental systems and initiatives, resource consumption and pollutant control, and environmental performance improvement. For category I3, environmental technology, investment, and expenditure, the difference between good and poor performers is 0.22, which is signi cant at the 0.10 level. However, there is no signi cant difference between the two for category I 6, important environmental issues and impact, and I7, environmental compliance. Obviously, the structural difference between good and poor performers is signi cant. Sample B of Table 4 provides similar results for 2009. Hence, the results provide evidence that poor performers disclose more soft information on environmental performance than good performers, but good performers disclose more solid information, thus supporting Hypothesis 2. The overall disclosure structure for poor and good performers exhibits similar characteristics. As shown in Sample A of Table 4, these rms disclosed more environmental information in the areas of I1 (values, policy, and environmental organization), I3 (technology, investment, and expenditure related to environment) and I5 (environmental performance improvement), followed by I2 (environmental management system and initiatives), and disclosed less in the areas of I6 (important environmental issues and environmental impact) and I7 (compliance with environmental regulations). It is not surprising that the most sensitive information, category I4 (resource consumption and pollutant control), is disclosed the least, in addition to environmental public welfare activities and others. Sample B in Table 4 shows a similar overall disclosure structure for 2009. It seems to be dif cult for stakeholders to distinguish poor from good performers based only on the level of disclosure, because on the one hand, while poor performers provide more soft information than good performers, they also supply more solid information than the mixed performers, and on the other hand, both poor and good performers demonstrate similar overall disclosure patterns despite statistically signi cant differences in several individual areas. To test Hypothesis 3a, Table 5 reports the disclosure of negative or sensitive information by poor performers after violations had been exposed by the MEC. Table 5 clearly indicates that poor performers disclosed very little relevant negative or sensitive environmental information, even after violations had been exposed by the MEC and the media. Of the 48 poor performers, only four rms reported the penalty, two admitted not having met environmental standards, and ve mentioned the existence of major risks. Most companies kept silent about negative information. Some disclosed sensitive information such as the environmental impact of construction projects (13 rms), the amount of sewage charges (19), and the substantial quantity of emissions (8). However, more rms (22) mentioned the inuence of environmental regulations generally. Hence, even with more disclosure, most of the poor performers cannot be easily identi ed by investors or other stakeholders if they have not been exposed by the MEC. There is therefore no strong evidence to support Hypothesis 3a. Models 1 and 3 in Table 6 report that poor and good performers signicantly increased their total level of EID from 2009 to 2010,
X.H. Meng et al. / Journal of Environmental Management 145 (2014) 357 e 367
363
Table 4 Structural analysis of differences in scores of eight categories among poor, mixed, and good performers. Average scores Poor (n Sample A: Year 2010 I1. Values, policy, and environmental organization I2. Environmental management systems and initiatives I3. Technology, investment, and expenditure related to the environment I4. Resource consumption and pollutant control I5. Environmental performance improvement I6. Important environmental issues and environmental impact I7. Compliance with environmental regulations I8. Environmental public welfare activities and other Total Sample B: Year 2009 I1. Values, policy, and environmental organization I2. Environmental management systems and initiatives I3. Technology, investment, and expenditure related to the environment I4. Resource consumption and pollutant control I5. Environmental performance improvement I6. Important environmental issues and environmental impact I7. Compliance with environmental regulations I8. Environmental public welfare activities and other Total
¼
48)
Difference in scores Mixed (n
¼
405)
Good (n
¼
80)
Poor-mixed
Good-mixed
Good-poor
2.04 0.69 1.43
0.48 0.23 0.78
1.70 0.96 1.65
1.56 d 0.46 d 0.65d
1.22d 0.72d 0.87d
0.34
b
0.16 0.92 0.30 0.24 0.19 5.98
0.02 0.30 0.15 0.10 0.03 2.09
0.32 1.20 0.26 0.28 0.12 6.48
0.14 c 0.62 c 0.14 c 0.14 c 0.17 c 3.88 d
0.30d 0.90d 0.11c 0.18d 0.09a 4.38d
0.16b 0.27b 0.04 0.04 0.07 0.50b
1.57 0.51 1.26
0.46 0.22 0.73
1.55 0.78 1.53
1.11 d 0.29 d 0.53b
1.09d 0.56d 0.80d
0.02
0.15 0.86 0.09 0.17 0.27 4.88
0.03 0.31 0.05 0.08 0.03 1.92
0.26 1.08 0.10 0.21 0.10 5.61
0.11 0.55 c 0.05 0.09 0.24 c 2.96 d
0.23 c 0.77d 0.05 b 0.13 c 0.07 3.69d
0.26c 0.22a
0.26d 0.27b 0.12b 0.22b 0.01 0.04 c 0.17 0.73c
a
p < 0.10; b p < 0.05; c p < 0.01; d p < 0.001. Samples A andB contain 533 rms(48 poor, 80 good, and405 mixed performers) that were assessed in 2009 and2010,respectively. The scores of the eight categories are calculated according to a set of index items (see Appendix I). The average disclosure scores in all eight categories are reported and pairwise differences acrosspoor, mixed,and good performers in the years of 2009 and2010 arelisted inthe last threecolumns.To test the signi cance of pairwise differences, OLS regression with robust (Eicker-Huber-White) standard errors was also used, but the dependent variables were each average scores of eight categories in turn rather than the total level of SEID in Table 3. The variables (rm s size, type of ownership, ROA, leverage, and industry dummies) are also included to control the effects of rms characteristics. Signi cance levels shown in Table 4 are based on t-statistics of regression results. ’
’
5.67 and 4.98, respectively, while Model 2 in Table 6 shows that mixed performers increased the total level of EID less from 2009 to 2010, a value of only 0.81 and statistical insignicance at the 0.05 level. It seems that poor performers increased their environmental disclosure more than mixed performers (i.e., 5.67 e0.81), but not much more than good performers (i.e., 5.67e4.89). To test whether poor performers with EVEs would increase the level of EID significantly more than other companies after violations had been exposed by the MEC (Hypothesis 3b), a regression analysis was designed including interaction effects for the time dummy variable and environmental performance, using the data pooled over the two-year period. The point of interest here is the interaction term,
Table 6 Regression results for tests of the difference of SEID between the year of 2009 and 2010. Variables
T 2010
“
“
Poor Performers
Size Ownership
Quantity of samples
”
”
ROA Leverage
4 44
Constant
27 21 2 17 29 8 13 22 0 19 5 48
Items 4e9 report the number of rms that disclosed related information; the remaining rms did not disclose any information.
Model 3
Model 4
Poor
Mixed
Good
Entire sample
5.67b (2.82)
0.81 (0.64)
4.98b (2.24)
0.82 (0.64) 8.93 d (2.14) 14.57d (1.62) 4.60b (2.25) 3.74b (1.81) 2.66d (0.27) 2.94d (0.71) 1.43 (1.78) 0.33 (0.47) d 48.30 (5.67) Controlled 48.56d 0.46 1066
Good Performers
Table 5 Disclosure of negative/sensitive information by poorperformers afterviolations had been exposed by the MEC.
1. Penalty A statement of the penalty by MEC No information 2. Listed among severe polluting enterprises A statement of no inclusion No information 3. Reached environmental standards Stated no Stated yes No information 4. Disclosed the quantity of emissions 5. Mentioned environmental impacts of construction projects 6. Mentioned the in uence of environmental regulation 7. Complaints and cases of collective environmental petition 8. Stated the amount of sewage charges 9. Mentioned the existe nce of major risk source Total
Model 2
Poor Performers
Good Performers
Dimensions
Model 1
Industry effects F-statistic Adj. R 2 N a
T 2010
T 2010
0.92 (0.99) 4.08 (4.28) 10.93c (2.86) 3.57 (10.45) 13.50 (20.30) controlled 16.08 d 0.40 96
2.80d (0.28) 2.78d (0.67) 0.83 (1.76) 0.004 (0.43) d 51.42 (6.02) controlled 19.87d 0.22 810
2.01a (1.10) 2.52 (3.25) 19.38 (19.45) a 10.54 (5.72) 11.34 (23.71) controlled 5.49b 0.14 160
p < 0.10; b p < 0.05; c p < 0.01; d p < 0.001.The dependentvariable is thelevel of SEID. T 2010 is a dummy variable equal to 1 if the year is 2010, and 0 if the year is 2009. Signicance levels are based on OLS regression with robust (Eicker-Huber-White) standard errors (reported below the estimated coef cient). Model 1, 2, and 3 reported poor, mixed, and good performers increased more on their disclosure from 2009 to 2010, respectively. Model 4 reported that poor performers signi cantly increased their disclosure from 2009 to 2010, more than the mixed performers, and that good performers signi cantly increased their disclosure from 2009 to 2010 more than the mixed performers. In Model 4, the F test shows no statistical signicance between the coef cient values of Poor Performers T 2010 and Good Performers T 2010 (F ¼ 0.09, p ¼ 0.75).
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X.H. Meng et al. / Journal of Environmental Management 145 (2014) 357 e 367
which is known as the difference-in-differences estimator in empirical economics (Green, 2003). As Model 4 in Table 6 shows, both the coef cients for the Poor Performers T 2010 and good Performers T 2010 variables (4.60 and 3.74, respectively) are statistically signicant atthe 0.05level( p ¼ 0.041, 0.038, respectively), indicating that both poor and good performers increased their disclosure from 2009 to 2010 signicantly more than did the mixed performers. However, a further F test of the difference between the coef cient values of the two interaction terms shows no statistical signicance (F ¼ 0.09, p ¼ 0.75). Table 6 reveals that poor performers provided signicantly more environmental disclosure after being exposed by the MEC than did mixed performers. However, compared with good performers, such exposure did not have a signicant impact. Thus, Hypothesis 3b is partially supported. 6. Discussion and conclusion This study has examined three questions about the relationship between a rm's environmental performance and EID, including (1) how EID relates to underlying environmental performance; (2) whether there is a difference in the nature of environmental disclosure between poor and good performers; and (3) whether or not poor performers increase their EID and release relevant negative or sensitive environmental information after their violations have been exposed by the authorities. Using discrete environmental performance variables (good/mixed/poor performers), a disclosure scheme in the Chinese context, as well as more than one year of data, we obtained some ndings. First, we provided empirical evidence to reveal a nonlinear relationship between environmental performance and EID. By introducing a large number of mixed performers, our results show that both poor and good performers disclosed signi cantly more environmental information than mixed performers, which provides additional evidence to support Dawkins and Fraas's nding (2011a) of a curvilinear environmental performanceedisclosure relationship. However, we also documented that good performers disclosed signi cantly more environmental information than poor performers, and showed structural differences in disclosure components at the two ends of environmental performance. Second, though it is dif cult to distinguish poor from good performers, there is a statistically signicant difference in what they are releasing: that is, poor performers disclose more soft information on environmental performance than good performers, while good performers disclose more solid information. Our ndings also revealed that good performers communicate with stakeholders by using more objective and veriable disclosure as predicted by the voluntary disclosure theory (Dye, 2001; Verrecchia, 1983), but they also legitimize their operations with soft claims; poor performers communicate with stakeholders using more soft and unveri able disclosures, as the legitimacy theory predicts (Patten, 2002), but they still use objective disclosure to communicate their environmental efforts. Our ndings indicate that the two competing linear explanations (that is, voluntary disclosure theory and legitimacy theory) need not be mutually exclusive, but can instead be integrated to explain Chinese rms' EID behaviors. Considering that the Chinese government is currently exploring ways to encourage rms to undertake environmental disclosure in a way that complements the existing regulatory system (Zeng et al., 2012; Zhu et al., 2013) in order to incentivize proactive implementation of environmental management, we would have expected good performers to disclose more information including soft claims in order to qualify for those tangible benets (e.g., environmental awards, convenience of renancing and investment examination options, tradable permits, and
support for a green credit policy). However, the mixed performers disclosed signicantly less environmental information in almost every category than both poor and good performers. This suggests that a large number of mixed performers merely meet basic expectations and adopt a baseline strategy, not seeking opportunities to highlight their environmental performance in a proactive manner, but also not reacting to the threat to their legitimacy. Third, we found that poor performers increased their environmental disclosure after their violations were exposed by the MEC but released very little actual negative/sensitive environmental information, which suggests that companies do not report their environmental news objectively (Deegan and Rankin, 1996). This may be attributable to the fact that the increasing pressure from the Chinese government has had a certain effect on environmental disclosure (Liu and Anbumozhi, 2009), but the weak legal system and low penalties may still give rms some leeway to be selective. The public and investors still do not have enough inuence on poor performers in China, as also concluded by Xu et al. (2012), who demonstrated that at present negative environmental violation events have a certain impact on stock markets. Considering this nding together with ours, it seems that the reliability of environmental disclosure remains a concern for the Chinese market. A poor performer may mislead investors by increasing its disclosure in order to appear to be a good performer, although very little factual information is actually given. Thus, though there is a statistically signicant difference in disclosure patterns, it still seems quite dif cult for investors or other stakeholders to identify good or poor performers by considering only the level and content of their environmental disclosure. These results have important implications for academics, managers, and regulators. From an academic perspective, focusing on what is disclosed, we provide evidence from the existing literature trying to reconcile the legitimacy and voluntary disclosure theories in the Chinese context. An integration of these theories provides a comprehensive view of environmental disclosure, showing that more than one theory can be used in future research to explain managerial behaviors in emerging markets. Our study also provides useful information for corporate practice. Proactive environmental disclosure can be used as a strategy, for good performers in particular, to provide more objective and veriable disclosure to communicate actual operating capacity and good performance. Such efforts help improve the corporate public image and bring about a green competitive advantage (Brammer and Pavelin, 2006). For poor performers, the discrediting effects of EVEs and negative publicity threaten environmental legitimacy and further harm corporate pro tability and survival (Xu et al., 2012; Meng et al., 2013) if rms passively respond to environmental management, gloss over information, or use strategic ways to lter it selectively. Since it is dif cult for external stakeholders to measure the accuracy of EID and to distinguish good and poor performers, it is certainly possible to publish reports that dress up companies (Pava and Krausz, 1996). Also, given the fact that a large number of mixed performers disclosed little environmental information of any kind, it is necessary to encourage top executives to shoulder corporate responsibility, especially for poor and mixed performers, in accordance with social and ethical judgments about appropriateness, acceptance, and desirability (Patten, 2002). Initiatives such as the China Entrepreneur Club's promotion of environmental friendliness may change top executives' views of environmental issues and therefore bring about a shift in corporate behavior (Zeng et al., 2012). Berrone and Gomez-Mejia (2009), Mahoney and Thorn (2006), and McGuire et al. (2003) also suggest that executive compensation (such as salary, bonuses, and stock options) can be an effective tool to encourage rms to be more socially responsible. “
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X.H. Meng et al. / Journal of Environmental Management 145 (2014) 357 e 367
Our ndings also have certain policy implications. Firstly, in China, given the large gaps in information and the split of regulatory functions, it is necessary to share information about rms' environmental activities between the MEC and the China Securities Regulatory Commission (CSRC). Particularly for severe environmental events, it is important for investors and other stakeholders in the stock market to have easy access to information that will help them to identify a company's environmental performance. Secondly, in order to avoid selective disclosure or the concealing of key environmental facts, mandatory reporting requirements should be dened for disclosure items. Thirdly, the CSRC should improve enforcement, increasethe cost penalties for disclosure violation, and, if possible, establish environmental audit systems. The goal must be to raise the visibility of corporate environmental performance and thereby incentivize rms to be environmentally friendly.
365
This study has only provided a snapshot of the environmental performance-EID relationship in the early stages of the development of environmental disclosure in China. A longitudinal study to assess the validity of the relationship we have identi ed would be of signicant future benet.
Acknowledgments We would like to thank the Associate Editor and two anonymous referees for very helpful suggestions that substantially improved this article. This research is supported by the National Natural Science Foundation of China (Grant No. 71025006, 71373161, 71390525) and funded by the Ministry of Education of Humanities and Social Science Project (Grant No. 14YJC630100).
Appendix I. EID scoring index for content analysis.
Item
(I1) 1. 2. 3. (I2) 1. 2. 3. 4. 5. 6. 7. 8. 9. (I3) 1. 2. 3. 4. 5. 6. (I4) 1. 2. 3. 4. (I5) 1. 2. 3. 4. (I6) 1. 2. 3. 4. 5.
Values, policy, and environmental organization Top executive's statement on values and principles related to environmental protection Firm's environmental protection policy, annual goals, and plan Department or of ce for pollution control, a nd its personnel, r esponsibilities and o perations Environmental management system and initiatives Information related to ISO 14000 environmental system and/or product eco-labeling certication Situation of voluntary cleaner production Employee training in environmental management and operations Greening plant and improving employees' operating environment Communication with stakeholders (such as suppliers, consumers, and communities) on environmental information Implementation of environmental management accounting Voluntary agreement with environmental authority for improvement of environmental practices External environmental honors or rewards Independe nt verication/assurance of environmental information disclosed in the annual report Technology, investment, and expenditure related to the environment Firm's investment expenditure for environmentally friendly products/energy-saving technologies Technological innovation/imports related to treatment of generated waste, recycling, and integrated utilization of waste products Construction and operation of environmental protection facilities Loans related to environmental protection Government funds, subsidies, and tax rebates related to the environment Firm's routine expenditure related to restoring the environment (land, water, air) Resource consumption and pollutant control Yearly total consumption of resources (materials/fuel/power/other energy) Type, quantity, concentration, and destination of gas emissions Type, quantity, concentration, and destination of ef uents Type, quantity, and destination of solid waste/toxic substances disposal and treatment Environmental performance improvement Reduce resource consumption (such as raw materials, water, and energy) per unit of product Reduce pollutant discharge (such as waste gas, water, and major pollutants) per unit of product En vir onme nta l be ne ts, such as waste income, environmental by-products income, and sewage charges savings, etc. Statement on other social/environmental bene ts of energy conservation, pollutant reduction, or resource utilization Important environmental issues and environmental impact Violation of environmental regulations and punishment (such as public criticism, lawsuits, heavy nes, suspension, and closure) Existence of new, reforming and/or expansion construction projects that have a signi cant environmental impact A s t at eme nt a b ou t whe the r t he rm/plant is listed as a severely polluting enterprise by SEPA A statement about whether there is a major risk source and plans for environmental emergency Signicant in uence of gove rnment environmental law, standards, and/or industrial policy
Firms disclosing the item
Average score
N
%
2009
2010
654 429 512 343 682 213
61.4 40.2 48.0 32.2 64.0 20.0
0.72 0.73 0.87 0.57 0.33 0.39
0.80 0.81 0.91 0.69 0.38 0.47
201 181 153 135
18.9 17.0 14.4 12.7
0.29 0.29 0.22 0.18
0.35 0.31 0.26 0.21
334 139
31.3 13.0
0.84 0.25
0.92 0.28
256 53
24.0 5.0
0.49 0.04
0.58 0.10
841 493
78.9 46.2
0.90 0.96
0.97 0.99
269
25.2
0.57
0.59
380 397 583 206 90 41 26 37 23 463 330 285
35.6 37.2 54.7 19.3 8.4 3.8 2.4 3.5 2.2 43.4 31.0 26.7
0.80 0.98 1.60 0.49 0.08 0.09 0.08 0.09 0.05 0.48 0.75 0.61
0.85 1.08 1.65 0.64 0.08 0.12 0.07 0.08 0.05 0.49 0.77 0.62
108
10.1
0.23
0.25
203
19.0
0.31
0.32
354 13
33.2 1.2
0.06 0.01
0.18 0.04
57
5.3
0.09
0.09
185 69
17.4 6.5
0.01 0.08
0.69 0.11
118
11.1
0.15
0.16
(continued on next page)
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X.H. Meng et al. / Journal of Environmental Management 145 (2014) 357 e 367
(continued) Item
6. (I7) 1. 2. 3. 4. 5. 6. 7. 8. (I8) 1. 2. 3.
Complaints of local residents/community and/or cases of collective environmental petition Compliance with environmental regulations Statement about whether pollutants of gas emissions reach speci c environmental standards Statement about whether pollutants of ef uents reach specic environmental standards Statement about whether noise meets speci c environmental standards Statement about the treatment of general solid waste in accordance with the law Statement about the safe treatment of toxic substances or risk waste in accordance with the law Discharge permission, sewage charges in accordance with the law, and actual amount paid The progress/schedule of tasks of total emission reduction at the plant and/or rm level Environmental assessment of construction projects in accordance with the law Environmental public welfare activities and other An overview of environmental public welfare activities (such as environmental education, tree-planting afforestation, and biodiversity conservation) An overview of potential environmental in uences on global warming, ozone layer, acid rain, or water eutrophication. Other environmental-related information
Firms disclosing the item
Average score
N
%
2009
2010
1 321 150
0.1 30.1 14.1
0.00 0.11 0.16
0.00 0.14 0.20
177 59 65 16
16.6 5.5 6.1 1.5
0.21 0.06 0.08 0.02
0.24 0.08 0.10 0.03
71 54 89 87 57
6.7 5.1 8.3 8.2 5.3
0.17 0.09 0.11 0.06 0.11
0.21 0.09 0.14 0.06 0.09
7
0.7
0.01
0.01
36
3.4
0.06
0.07
Index items areclassied intoeight categories. The sample contains 533 rms assessed in 2009 and2010.The third andfourth columns present thenumber andpercentage of rms disclosing each item, respectively. The average score on each item for the full sample of rms is reported in the last column.
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