The role of environmental disclosures as tools of legitimacy: A research note

    Authors

    C. H. Cho;D. M. Patten

    Comments

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    Abbreviated Journal Title

    Account. Organ. Soc.

    Keywords

    CORPORATE SOCIAL PERFORMANCE; Business, Finance

    Abstract

    Legitimacy theory suggests companies with poorer environmental performance would be expected to provide more extensive off-setting or positive environmental disclosures in their financial reports. However, recent investigations of the performance/disclosure relation [Al-Tuwaijri, S. A., Christensen, T. E., & Hughes 11, K. E. (2004). The relations among environmental disclosure, environmental performance, and economic performance: a simultaneous equations approach. Accounting, Organizations and Society, 29,447-471; Hughes, S. B., Anderson, A., & Golden, S. (2001). Corporate environmental disclosures: are they useful in determining environmental performance? Journal of Accounting and Public Policy, 20, 217-240; Hughes, S. B., Sander, J. F., & Reier, J. C. (2000). Do environmental disclosures in US annual reports differ by environmental performance? Advances in Environmental Accounting and Management, 141-161; Patten, D. M. (2002). The relation between environmental performance and environmental disclosure: a research note. Accounting, Organizations and Society, 27, 763-773] report mixed results. In this study, we use size-matched groups based on industry membership (environmentally sensitive versus non-environmentally sensitive) and environmental performance (worse. performers versus better performers, based on data from KLD Research and Analytics, Inc.) to test for differences in the use of monetary and non-monetary non-litigation related environmental disclosure. Results indicate that the use of monetary and non-monetary components of the non-litigation related environmental disclosure varies across groups. In general, the findings provide additional support for the argument that companies use disclosure as a legitimizing tool. (C) 2006 Elsevier Ltd. All rights reserved.

    Journal Title

    Accounting Organizations and Society

    Volume

    32

    Issue/Number

    7-8

    Publication Date

    1-1-2007

    Document Type

    Article

    Language

    English

    First Page

    639

    Last Page

    647

    WOS Identifier

    WOS:000249550000002

    ISSN

    0361-3682

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