The Effect of Disclosure Regulation and Guidelines on the Association between Environmental Disclosure and Environmental Performance

• In Event: The Environment & Pedagogy

Abstract

In this study, we attempt to understand the impact of disclosure regulation and enforcement by regulators on curbing firms’ use of environmental disclosures as self-laudatory tools. Different disclosure media are subject to various disclosure regulations and different enforcement levels. While disclosures made in 10-K reports are highly regulated and enforced by the SEC, disclosures in sustainability reports - and to a large extent, annual reports - are completely voluntary and are left to the discretion of firms. The study reviews environmental disclosure made in annual, 10-K, and sustainability reports between 1997 and 2010 for 78 firms to understand the type of information disclosed in each media. Furthermore, the study examines the association between environmental disclosure and environmental performance - a symbol of reporting bias - in each media to understand whether disclosure guidelines and enforcement moderate this relationship.

Authors

• Hani Tadros, Elon University

• Michel L Magnan, Concordia University