Charles H. Cho

This study investigates the relation between the disclosure of corporate social responsibility (CSR) bad news and reputation. In particular, our analysis focuses on the moderating effect that such disclosure may have on corporate reputation. A large and growing number of studies in the CSR accounting literature provides empirical evidence supporting the argument that CSR disclosure – which has been criticized for its self-laudatory style – may serve as a reputation management tool used to camouflage a company’s image among stakeholders, hence protect its reputation. These studies suggest that an optimistically biased reporting may enhance reputation. However, recent research in the financial accounting area shows that a non-or less-optimistically biased reporting may actually have positive effects on the credibility of the information disclosed. Therefore, the paper argues that the disclosure of CSR-related bad news could be beneficial and turn into better reputation. Based on data from a sample of the most visible companies in the US, this study shows that the disclosure of bad CSR news may have positive reputational outcomes.

In this study, we investigate the potential differences in topic-specific corporate social responsibility (CSR) disclosure between companies located in liberal market economies (LMEs) and coordinated market economies (CMEs). We also examine the potential convergence of the reporting practices that characterise these two economies over time. We analyse a sample of 5,939 CSR reports issued by European and U.S. firms over 2008–2019. We use textual analysis to examine how explicitly such reports address specific CSR topics. Following Matten and Moon (2008), we focus on three thematic areas: ‘human resources’, ‘environmental protection’, and ‘society at large’. Each area comprises three distinct topics. Our results show that companies operating in LMEs report more explicitly on these thematic areas, with one exception: those operating in CMEs report more explicitly on parental policies. Additionally, the reporting practices of companies operating in these two types of economies converge for most of the topics under study. For the disclosure of parental leave policies, biodiversity, and waste, no distinct trend is observable.

We examine the relation between environmental disclosure and the cost of capital by exploiting the Fukushima nuclear disaster as a source of variation in the relevance of environmental information for investors. Using a large hand-collected sample of Japanese firms, we find that firms disclosing carbon emissions experience a lower increase in the cost of capital than non-disclosing firms. Cross-sectional analyses suggest that the association between disclosure and the cost of capital is driven by the increase in investor uncertainty about the energy supply shortage that followed the disaster rather than future regulatory costs. Moreover, we find that after the disaster, non-disclosing firms in the pre-disaster period increase their environmental disclosures to a greater extent relative to disclosing firms. Taken together, our results provide insight into the link between non-financial, unregulated disclosures and the cost of capital.

We investigate how local actors in the Romanian financial reporting field mobilize their indigeneity to enact and operationalize transnational financial reporting models in a context where neoliberal ideas represent a substantive change in respect to the past. We mobilize interviews with local key actors, evidence from multiple data sources, and Bourdieu’s concept of habitus to investigate how inertia and change are intertwined. We explain how the Romanian state continues to draw on and reproduce the local accounting inclinations inherited from communist times. At the macro level, the state’s actions (through the role of financial reporting regulator) suggest a strong agency exerted in the backstage, paralleling the appearance of accepting International Financial Reporting Standards (IFRS) in the frontstage. At the micro level, where rules are operationalized, indigenous professionals deal with their historically created habitus and with various destabilizing influences from newcomers to the financial reporting field, which reflects diverse relationships and power imbalances between nascent actors of a market economy. We show that habitus is critical in understanding the complicated dynamics of inertia and change in accounting practices. Our results illustrate a web of improvisation, imitation, hybridization, and reinterpretation of both locally traditional and Western principles as local accounting rules and practices become global and remain local.

This study investigates the effect of corporate environmental information disclosure (EID) on green innovation in China’s heavily polluting industries during 2009–2020 and the moderating effect of Chief Executive Officer (CEO) visibility. The results show that: (1) corporate EID increases green innovation, and CEO visibility strengthens the positive impact of corporate EID on green innovation. (2) The green innovation fostered by EID comes from the leverage effect, not from the crowding-out effect at the expense of other existing innovations; EID stimulates green innovation by alleviating financing constraints and increasing R&D expenditures. (3) Corporate EID has a greater impact on substantive green innovation than on strategic green innovation, and hard EID makes a more significant contribution to green innovation than soft EID does. (4) State-owned, large, and established enterprises benefit more from the promotion effect of EID on green innovation as well as the positive moderating effect of CEO visibility.

When implemented effectively, interdisciplinary research can produce practical impact towards addressing societal “grand challenges” while also generating novel conceptual insights that advance theory. However, despite decades of calls for interdisciplinarity, research communities continue to become more siloed and less impactful. This paper aims to highlight the obstacles to interdisciplinary work contained within the accounting community, specifically those associated with Interdisciplinary Accounting Research (IAR). We argue that, in order to overcome these obstacles and produce more effective and impactful interdisciplinary work, we require four IAR practices: Problem-solving, Public engagement, Professionalism and Performance Revision. Our purpose is to identify challenges as well as solutions that reduce the friction that accounting academics experience when collaborating with scholars outside their research discipline, especially when it concerns addressing grand challenges.

This study explores firm responses to stakeholder-initiated involuntary disclosures, which are disclosures made by stakeholders about an organization but are against the will of managers, and subsequent stakeholder reactions. We analyzed 134,977 firm Twitter replies from seven companies to identify their responses to involuntary corporate social responsibility (CSR) disclosures and find that companies demonstrate different attitudes toward engagement in the exchange about involuntary disclosures. Whereas some companies communicate with stakeholders, others are almost silent. When a company engages in communication with its stakeholders, the communication is mostly one-way, and mortification or dissent is the likely response strategy. We also find that while stakeholders generally do not continue to engage with corporate communications, they are likely to respond when companies deny the information revealed by involuntary disclosure. Our results suggest that involuntary disclosures on social media are not able to improve communication between stakeholders and companies.

To commemorate 40 years since the founding of the Journal of Business Ethics, the editors-in-chief of the journal have invited the editors to provide commentaries on the future of business ethics. This essay comprises a selection of commentaries aimed at creating dialog around the theme Bringing Excitement to Empirical Business Ethics Research (inspired by the title of the commentary by Babalola and van Gils). These editors, considering the diversity of empirical approaches in business ethics, envisage a future in which quantitative business ethics research is more bold and innovative, as well as reflexive about its techniques, and dialog between quantitative and qualitative research nourishes the enrichment of both. In their commentary, Babalola and van Gils argue that leadership research has stagnated with the use of too narrow a range of perspectives and methods and too many overlapping concepts. They propose that novel insights could be achieved by investigating the lived experience of leadership (through interviews, document analysis, archival data); by focusing on topics of concern to society; by employing different personal, philosophical, or cultural perspectives; and by turning the lens on the heroic leader (through “dark-side” and follower studies). Taking a provocative stance, Bal and Garcia-Lorenzo argue that we need radical voices in current times to enable a better understanding of the psychology underlying ethical transformations. Psychology can support business ethics by not shying away from grander ideas, going beyond the margins of “unethical behaviors harming the organization” and expanding the range of lenses used to studying behavior in context. In the arena of finance and business ethics, Guedhami, Liang, and Shailer emphasize novel data sets and innovative methods. Significantly, they stress that an understanding the intersection of finance and ethics is central to business ethics; financial equality and inclusion are persistent socio-economic and political concerns that are not always framed as ethics issues, yet relevant business policies and practices manifest ethical values. Finally, Charles Cho offers his opinion on the blurry line between the “ethical” versus “social” or “critical” aspects of accounting papers. The Journal of Business Ethics provides fertile ground for innovative, even radical, approaches to quantitative methods (see Zyphur and Pierides in J Bus Ethics 143(1):1–16, https://doi.org/10.1007/s10551-017-3549-8, 2017), as part of a broad goal of ethically reflecting on empirical research.

In this paper, we reflect and provide insights on the environmental implications of post-COVID-19 economic recoveries. More specifically, we highlight the connection(s) between the environment and the COVID-19 crisis, in particular the intertwined links between Mother Nature and the virus. We then raise some concerns about the ‘illusionary’ positive and negative effects of the crisis on the environment before evoking some past lessons about crisis management and recovery. We contend that the current accounting and accountability mechanisms employed in economic stimulus programs, as well as traditional environmental accounting approaches, are inadequate and limiting to achieve long-term sustainability change. The paper concludes by offering accounting practitioners and researchers some possibilities to take a step forward and develop new understandings of social and environmental value consistent with ecological principles and sustainable development—and hope that these reflections will contribute to a broader debate on the role of accounting for sustainable development in the Anthropocene.

Building a coherent discourse on professionalism is a challenge for corporate social responsibility (CSR) practitioners, as there is not yet an established knowledge basis for CSR, and CSR is a contested notion that covers a wide variety of issues and moral foundations. Relying on insights from the literature on micro-CSR, new professionalism, and Boltanski and Thévenot’s (2006 [1991]) economies of worth framework, we examine the discourses of fifty-six CSR practitioners in South Korea on their claimed professionalism. Our analysis delineates four distinct discourses of CSR professionalism—strategic corporate giving, social innovation, risk management and sustainability transition—that are derived from a plurality of more or less compatible moral foundations whose partial overlaps and tensions we document in a systematic manner. Our results portray these practitioners as compromise makers who selectively combine morally distant justifications to build their own specific professionalism discourse, with the aim to advance CSR within and across organizations. By uncovering the moral relationality connecting these discourses, our findings show that moral pluralism is a double-edged sword that can bolster the justification of CSR professionalism but also threaten collective professionalism at the field level. Overall, our study suggests paying more attention to the moral relationality and tensions that underlie professional fields.

We investigate whether air pollution harms business ethics from the perspective of earnings manipulation, which exerts a real effect on the economy and social welfare. Using a large sample and a comprehensive air quality index in China, we find that firms located in cities with more severe air pollution exhibit higher levels of discretionary accruals and are more likely to restate their financial statements, consistent with exposure to air pollution leading to more earnings manipulation. We further provide causal evidence using propensity score matching and a discontinuity regression design (RDD) exploiting the Qinling Mountain–Huai River Heating Policy Line, which exogenously leads to more air pollution to cities located immediately north of the Line but not those in the south. Our findings are robust to controlling for weather conditions and alternative samples and measures of air pollution and earnings manipulation. Overall, this study unveils how the ecological environment shapes business ethics.

This study investigates whether shareholders are willing to pay for higher levels of corporate financial, social, and environmental disclosure. We conduct a choice-based conjoint experiment wherein 65 shareholders are asked to make 12 choices, choosing each time between two predetermined randomized combinations of different levels of investment returns, financial disclosure, environmental disclosure, and social disclosure. Results indicate that whereas shareholders are willing to pay for financial disclosure and environmental disclosure, they are unwilling to pay for social disclosure. Hence, the latter finding does not provide conclusive evidence on the overall question. However, the result that investors are willing to pay for non-financial disclosures – such as environmental information – constitutes our main contribution as prior research has not been able to provide strong evidence that investors are willing to forfeit investment returns in order to gain access to more corporate disclosures. The use of a choice-based conjoint experiment to examine these matters is novel and potentially opens avenues for future research. We believe our theoretical and practical contributions to be of interest to various stakeholders, including firms in making decisions about disclosure levels and regulators in assessing the need for financial disclosure regulation.

A growing number of studies use a dichotomous variable indicating the presence of a standalone CSR report to capture impacts of CSR disclosure.  Our concern is that, without considering differences in the information provided, such an approach could lead to incorrect inferences regarding those impacts.  Accordingly, we extend prior research by examining whether, similar to differences in environmental disclosure, the mere presence of a standalone CSR report mitigates negative market reactions at times of regulatory cost exposure. We focus on the 2011 Fukushima Daiichi disaster and a sample of international utilities with nuclear power generation.  Controlling for other factors related to social and regulatory cost exposures, we find only the environmental disclosures appear to reduce negative market effects.  We thus argue that, in exploring the impacts of CSR disclosure, researchers need to carefully consider, beyond just the presence of a CSR report, differences in the extent of information being provided.

Purpose – This paper highlights the emergency budgetary measures taken by the French government in response to the COVID-19 pandemic health crisis and identifies some of the key political, economic, social and environmental factors and consequences associated with those measures. Design/methodology/approach – The authors conduct a thorough analysis of official reports, bills and academic and news articles related to the pandemic management in France. The authors’ analysis covers the period from January 24 to July 31, 2020. Findings – Despite previous austerity policies, France faced the health crisis with a very high level of debt, which has complicated the management of the COVID-19 crisis. Although significant, the response brought by the French government seems in the end to be rather choppy. Originality/value – This paper highlights three elements of analysis that allow a better understanding of the budgetary management process in France. The authors first discuss the notion of budgetary flexibility. Then, they show that the growth of participatory budgets in local communities gives hope for a possible and much needed decentralization process implying a stronger commitment of citizens. Finally, they highlight a budgetary paradox; that is, massive funding of polluting industries versus ecological issues. These three elements of analysis all advocate the need for a deeper engagement among different levels of government and actors.

Purpose Mobilizing a theoretical framework combining institutional logics and “imprinting” lenses, this paper provides an in-depth contextualized analysis of how historical imprints affect social and environmental reporting (SER) practices in Romania, a post-communist country in Eastern Europe. Design/methodology/approach The authors conduct a qualitative field study with a diverse dataset including regulations, publicly available reports and interviews with multiple actors involved in the SER field in Romania. The authors follow a reflexive approach in constructing the narratives by mobilizing their personal experience and understanding of the field to analyze the rich empirical material. Findings The authors identify a blend of logics that combine local and Western conceptualizations of business responsibilities and explain how the transition from a communist ideology to the free market economy affected SER practices in Romania. The authors also highlight four major imprints and document their longitudinal development, evidencing three main patterns: persistence, transformation and decay. The authors find that the deep connections that form between logics and imprints explain the cohabitation of logics rather than their straight replacement. Originality/value The paper contributes by evidencing the role of imprints’ dynamics in the institutionalization of SER logics. The authors claim that the persistence (decay) of imprints from a former regime such as communism hinders (facilitates) the institutionalization of Western SER logics. Transformation instead has more uncertain effects. The pattern that an imprint takes hinges upon its usefulness for business interests.

COVID-19 brought a high degree of disruption for society, firms, and consumers. Retail, grocery, and food services have been particularly affected as they were expected to maintain their operations while mitigating marketplace risks. Furthermore, epistemic uncertainty arising from the frequent and shifting scientific and lay knowledge on the virus required agile responsibilization of market actors. Using Canadian policy-maker, firm, and consumer communication data, our article maps the unfolding of the risk perceptions in the marketplace and highlights the strategies implemented by policy makers and firms in responsibilizing different market actors against risk. Our work contributes to the responsibilization literature and provides insights for managers and policy makers regarding compliance with health and safety guidelines.

The purpose of this study was to identify the current state of sustainability integration into Canadian government procurement and make recommendations on how to deepen current integration in order to accelerate the advancement of existing sustainability goals. We reviewed 50 publicly available Requests for Proposals (RFPs) issued between 2016 and 2019 and evaluated the significance of sustainability integration and the expanse of considerations using two measurement schemes. Our analysis suggests that sustainability integration into RFPs is currently superficial with limited integration into the evaluation process. We also found that the integration of sustainability was narrow with significant gaps in the breadth of environmental and social impact areas that were considered. As such, we provide insights and recommendations that will enable governments to accelerate the advancement of sustainability through the use of procurement.

Purpose The purpose of this paper is two-fold. The first is to provide insight into the academic life, teaching and research activities of active participants in the sustainability accounting and management academic community in North America. The second is to provide readers with an overview of the papers in this special issue. Design/methodology/approach To meet the first objective, we specifically sought out those who self-identify as sustainability accounting and management academics, based in North American universities and who actively engage in the sustainability academic community in North America. Using an anonymous online survey, this group was asked to respond to various questions about their academic life, research and teaching activities. Findings Survey respondents report that they choose to focus on sustainability accounting and management because they want to make a difference (change the world). To that end, the respondents identify carbon emissions and climate change, social issues such as inequalities, as well as grand challenges and sustainable development goals, as important research topics to pursue in the future. While passionate about their research topics, respondents generally note that research outlets that will serve to significantly move their careers forward are difficult to find. A relatively small number of respondents teach sustainability accounting or management, however, most courses taught are dedicated to the topic and teaching sustainability was identified as amongst the most enjoyable aspects of their academic lives. Practical implications With study respondents feeling closed out of a number of mainstream journals, career paths at North American institutions could appear somewhat limited for those choosing sustainability accounting and management research as a focus, interest and even passion. This is perhaps even more profound on the teaching side where from a practical perspective, we need to be teaching accountants and managers the significance of sustainability in and for the profession, yes – but even more so for society broadly. Social implications As we move into the digital age, it is important that professionals bend their minds to sustainability as much as they do to keep up with the “pace of change” on other fronts. A potential risk is that “high-tech” subsumes equally important social aspects that need to be embedded in the process of generating accounting and management professionals. Originality/value To the best of our knowledge, this is the first time a survey on the work experiences of a sample of scholars teaching and doing research in the area of sustainability accounting and management has been presented for publication. It is meant to provide some descriptive insights into what drives some active participants in this group of academics and reflect on where the future might lead as sustainability becomes an urgent necessity rather than a choice. These descriptive insights and reflections provide a starting point for future inquiries.

Purpose This paper summarizes the emergency measures taken by Canada in response to the COVID-19 pandemic, and discusses the key political, economic, and social factors that influenced the design of these measures. Design/methodology/approach This paper collects the announcement of emergency measures in the Canadian provincial and federal governments between March 18 and May 30, 2020 in response to the COVID-19 pandemic and categorizes them by type of emergency response. Findings Canada has a diversified response of emergency measures mediated by its various provinces. This suggests that Canada may be more robust to biological and economic threats than nations that have less policy diversity. Originality/value Canada’s diversity of emergency measures allows for several different avenues for future research, including countercyclical spending by subnational polities, organizational diversity’s effect on resilience, the effect of tax breaks versus direct or indirect payments, effectiveness of public-private partnerships, and the effect of transparency on citizen satisfaction.

Purpose – This paper investigates how organisations are responding to mandatory modern slavery disclosure legislation. Experimentalist governance suggests that organisations faced with disclosure requirements such as those contained in the UK Modern Slavery Act 2015 will compete with one another, and in doing so, improve compliance. The authors seek to understand whether this is the case. Design/methodology/approach – This study is set in the UK public sector. The authors conduct interviews with over 25% of UK universities that are within the scope of the UK Modern Slavery Act 2015 and examine their reporting and disclosure under that legislation. Findings – The authors find that, contrary to the logic of experimentalist governance, universities’ disclosures as reflected in their modern slavery statements are persistently poor on detail, lack variation and have led to little meaningful action to tackle modern slavery. They show that this is due to a herding effect that results in universities responding as a sector rather than independently; a built-in incapacity to effectively manage supply chains; and insufficient attention to the issue at the board level. The authors also identity important boundary conditions of experimentalist governance. Research limitations/implications – The generalisability of the authors’ findings is restricted to the public sector. Practical implications – In contexts where disclosure under the UK Modern Slavery Act 2015 is not a core offering of the sector, and where competition is limited, there is little incentive to engage in a “race to the top”in terms of disclosure. As such, pro-forma compliance prevails and the effectiveness of disclosure as a tool to drive change in supply chains to safeguard workers is relatively ineffective. Instead, organisations must develop better knowledge of their supply chains and executives and a more critical eye for modern slavery to be combatted effectively. Accountants and their systems and skills can facilitate this development. Originality/value – This is the first investigation of the organisational processes and activities which underpin disclosures related to modern slavery disclosure legislation. This paper contributes to the accounting and disclosure modern slavery literature by investigating public sector organisations’ processes,activities and responses to mandatory reporting legislation on modern slavery.

Research Question: How is neoliberal control exercised over football fans? What is the effect of neoliberal control devices on football fans? Motivation: We draw upon Foucault’s work to explore the various disciplining control devices targeting Paris Saint-Germain Football Club (PSG) fans. At a time of increasing social strife in France, Yann Lorence was killed in a factional dispute between two PSG “ultra” fans groups in 2010. Following this, drastic measures were taken to tighten control over various PSG fan groups. After the acquisition of PSG by Qatar Sports Investments (QSI) in 2011, these control measures were reinforced to the point where they came under the scrutiny of the French commission protecting individual liberties (CNIL)—as one of them resulted in the exclusion of some fans directly from or around the stadium on reportedly “arbitrary” – but actually social – grounds. Idea: We explore the extent to which going one degree further into the market society and implementing a neoliberal rationality can impact social life. More specifically, we examine how social discrimination can be created and encouraged through neoliberal control devices. Data: We use both “netnographic” data and interviews with key actors and stakeholders in the football field. Tools: We examine and analyze the neoliberal control devices implemented by PSG management, in collaboration of the French government, in order to change the sociodemographics of its fan base and ultimately change its image and identity, to consider the operation of control systems from a Foucauldian perspective. Findings: The various methods of control exercised by and around the club significantly blurred the distinction between PSG as a private enterprise and the French state as a legislative/judicial entity. This resulted in fan self-exclusion and self-policing (“control of the self”), and also the enforced removal of a largely working-class portion of the club’s fans. Contribution: We contribute to the study of the articulation of “discipline” and “government” (the two major power techniques in Foucault’s work) and to the management control literature by showing how neoliberal control devices can discriminate against people on sociological grounds, thereby impeding the development of an equal and harmonious social life.

Recent discussions at accounting conferences and workshops suggest that academics are ‘deeply divided’ on the role and purpose of corporate social responsibility (CSR) accounting. This ‘rift’ has been created by moves from mainstream accounting researchers to contribute to a body of evidence that is almost 50 years old without—many believe—being cognizant, or even respectful, of the work that has gone before. The existing work by CSR accounting scholars puts sustainability of the planet at its core, rejecting narrow or instrumental approaches to the fundamental issues; in contrast, more recent ‘capital market-based’ work takes investor-centric, or market-driven approaches to ‘sustainability’ and CSR. While there are calls for greater understanding of, and empathy for, each other’s views and perspectives, this essay identifies some particular pain-points, and calls for new wave researchers—those who recently ‘(re)discovered’ CSR accounting research—to ‘step up (to their plate)’ or simply ‘stay in their own lane (or, out of the game)’.

This study examines the progress Canada’s largest companies are making in their environmental, social, and governance (ESG) disclosures. Given the introduction of the Global Reporting Initiative (GRI) Standards and the United Nations Sustainable Development Goals (UN SDGs) as well as the issuance of the Task Force on Climate‐Related Financial Disclosures (TCFD) recommendations, our research reflects the uptake of these guidance documents by both mature and new reporters. Our analysis suggests that challenges persist—processes and progress often fail to reach investors as they are “lost in translation” when issued through third‐party ESG information providers, and reporters are also pressured to respond to a myriad of requests for information from rating and reporting agencies. Nevertheless, we note that Canada has new reporting sectors that must mature to survive the scrutiny of the markets and also hope that stock markets will respond to the recent announcement by the 181 CEOs of the U.S. Business Roundtable, who committed to lead their companies for the benefit of all stakeholders—customers, employees, suppliers, communities, and shareholders. Overall, we believe that our research will provide food for thought for companies interested in continuous improvement.

While many extant studies focus on the relation between financial performance and corporate social responsibility (CSR) reporting, less attention has been given to the shifting role of financial performance in CSR reporting in a changing institutional environment. The objective of this study is to investigate whether, why, and how institutional transitions affect the role of financial performance in CSR reporting. Using samples of A‐share listed companies from 2008 to 2015, we separately examine the impacts of institutional transitions on firms’ propensity to issue standalone CSR reports, the quality of voluntary CSR reports, and the quality of mandatory CSR reports. We find that financial performance buffers against external pressures brought by institutional transitions rather than only serving as a slack resource. By highlighting the buffer role of financial performance, our study provides deeper insights on the relation between financial performance and CSR reporting and contributes to extant institutional research on CSR reporting.

In the current study, we examine the changes in disclosure practices on compliance and the fight against corruption at Siemens AG, a large German multinational corporation, over the period 2000–2011 during which a major corruption scandal was revealed. More specifically, we conduct a content analysis of the company’s annual reports and sustainability reports during that period to investigate the changes of Siemens’ corruption and compliance disclosure using both quantitative and qualitative methods. Through the lens of legitimacy theory, stakeholder analysis, and organizational façades, we find evidence that Siemens changed its compliance and corruption disclosure practices to repair its legitimacy in the wake of the 2006 corruption scandal. We analyze these strategies more closely by using the rational, progressive, and reputation façades framework (Abrahamson and Baumard in The Oxford Handbook of Organizational Decision Making, pp 437–452, 2008). Our primary findings suggest that the annual reports show peaks of disclosure amounts on corruption and compliance disclosures earlier than sustainability reports, which can be partly explained by analyzing the disclosures made about—and to—the different stakeholder groups. We find that the annual report focuses more on internal stakeholders such as employees, while the sustainability report focuses more on external stakeholders such as suppliers. We also find that the company uses the façades differently depending on which report is being analyzed.

While proponents of sustainability reporting believe in its potential to help corporations be accountable and transparent about their social and environmental impacts, there has been growing criticism asserting that such reporting schemes are utilized primarily as impression management tools. Drawing on Erving Goffman’s (1959) self-presentation theory and its frontstage/backstage analogy, we contrast the frontstage sustainability discourse of a sample of large U.S. oil and gas firms to their backstage corporate political activities in the context of the passage of the American-Made Energy and Good Jobs Act, also known as the Arctic National Wildlife Refuge (ANWR) Bill. The ANWR Bill was designed to allow oil exploration within the most sensitive environmental areas in the Refuge and this bill was vigorously debated in the United States Congress in 2005 and 2006. Our results suggest that the firms’ sustainability discourse on environmental stewardship and responsibility contrasts sharply with their less visible but proactive political strategies targeted to facilitate the passage of the ANWR Bill. This study thus contributes to the social and environmental accounting and accountability literature by highlighting the relevance of Goffman’s frontstage/backstage analogy in uncovering and documenting further the deceptive nature of the discourse contained in stand-alone sustainability reports. In addition, it seeks to contribute to the overall understanding of the multifaceted nature of sustainability reporting by placing it in relation to corporate political activities.

We present a longitudinal qualitative case study to elaborate on how a social venture forms reference points for social performance. Although organizations increasingly use various social performance targets to direct their operations, the scholarly knowledge on social performance reference points remains limited. We make use of the prior accounting literature and draw on the idea of compromising accounts to discuss how provisional and performative metrics can have a significant role in how organizations develop new ways to evaluate their social performance. Given that the social performance reference point criteria are ambiguous and the corresponding referents malleable, performative accounts are helpful as they can intervene in the organizational life by making particular things visible, providing space for interpretations, and facilitating discussion, thus creating temporary settlements and enabling opportunities for productive compromises between different organizational groups and evaluative principles. The recursive feedback loops between reference point referents, criteria and accounting artefacts help the organization to make sense of its own social performance and interpret the associated performance feedback, and thereby provide ground for organizational decisions on further action. Moreover, we discuss how imperfect accounts can be useful for social businesses in their pursuit of developing their activities and achieving social impact.

The purpose of this study is to examine whether different levels of assurance statements of environmental disclosures affect investment choices in the French context where environmental assurance was voluntary until 2012 and became regulated and mandatory since then.,The authors conducted an experiment during the voluntary context – which represents the vast majority of countries – on a sample of 108 financial analysts.,Environmental disclosure has a positive impact on investment recommendations. More surprisingly, financial analysts are less likely to give recommendations in favor of a company that displays environmental disclosure with low-level assurance than for a company with no assurance statement at all.,When assurance is voluntary and there are at least two levels, this study results suggest that firms should avoid selecting the lowest level of assurance because it negatively affects investor decisions. From this perspective, firms should devote sufficient effort and resources to obtain at least Level 2 environmental disclosure assurance.,Given the recommendations made by financial analysts, the authors could expect that firms may prefer to engage in a higher level of assurance or to provide no assurance rather than minimize their financial efforts and resources to select a lower level of voluntary assurance regarding environmental disclosure.,This study has implications for the voluntary assurance practices of environmental disclosure and can provide support to regulators to promote higher standards in environmental assurance. It documents the relevance to increase the level of requested assurance for environmental disclosure.,To the best of the authors’ knowledge, very few studies have examined the additional effect of assurance on environmental disclosure in investors’ decisions. The experiment is conducted with financial analysts in the context of voluntary assurance.

What are the types of interactions in the discursive struggles between the two parties involved in a hostile takeover bid? How is the legitimacy of the bid (de) constructed by both the bidding and target companies during their discursive struggles? This paper aims at addressing these research questions. Discursive struggles between the bidding and target companies are studied in a sample of 66 press releases related to seven hostile takeover bids approved by the French Market Regulator between December 2006 and December 2014. A study of the sequence followed by each party in issuing their press releases confirms the existence of strong interactions in all the hostile takeover bids studied. Using a manual content analysis methodology, we find that the disclosures made by the bidding and target companies consist of a series of attacks and defenses in which target companies are particularly offensive. We also give evidence that the two companies use legitimation, (de) legitimation and (re) legitimation arguments during discursive struggles, revealing the reciprocity of the communication between the two protagonists. We underline the symbolic or strategic dimensions of these legitimacy strategies in the view of the outcome of bids. Finally, we discuss the implications of our findings for regulators and make suggestions for future research. Based on the metaphor of ventriloquism, our research highlights the importance of considering disclosures as a dynamic and mutual influence process.

Given the recent rise in the evolution and maturity of social and environmental accounting (SEA) research and scholarship, we provide a literature review of the current trends within this area in a concise and harmonized manner for a wider audience in academia and practice. More specifically, we visit the current state of scholarly work, which can be useful in facilitating future research questions and further development of SEA research associated with relations between corporate social performance (CSP), corporate social disclosure (CSD), and corporate financial performance (CFP). Our goal is to offer insights to the current state of SEA research that is informative to both novice and expert SEA scholars, with the hope to promote and stimulate further advancement of research in this particular area. Drawing knowledge from relevant disciplines such as accounting, management, finance, and economics, this article visits the current trends within SEA research in terms of definition, research topics, theoretical viewpoints, methodological approaches, as well as suggestions for future research.

Purpose The purpose of the paper is to examine the impact of investor sentiment on managers’ decisions to provide CSR disclosures. The core issue focuses on whether, why and how managers adjust their approach to CSR disclosure to cater to the investor sentiment. Design/methodology/approach On the basis of 13,488 observations of A-share listed companies, the authors examine the impacts of investor sentiment on CSR disclosure, which is measured separately by the propensity to issue a standalone CSR report and the quality of CSR reports. Furthermore, the authors examine the moderating role of institutional factors in China. Findings The authors find that during low-sentiment periods, managers are more likely to issue a standalone CSR report and the quality of CSR reports is higher, and vice versa. Additionally, the authors find that the negative correlations between CSR disclosure and investor sentiment are stronger in state-owned enterprises. Research limitations/implications First, the measurement of investor sentiment reflects only a part of characteristics of investor sentiment. Second, the authors pay less attention to the specific items of a CSR report. Originality/value The study contributes to the literature on CSR disclosure and investor sentiment by combining the two fields together. Furthermore, the study deepens the understanding of the institutional context in China and contributes to research on the predictors of CSR disclosure.

According to our data, 38.5% of S&P 1500 firms have at least one professor on their boards. Given the lack of research examining the roles and effects of academic faculty as members of boards of directors (professor-directors) on corporate outcomes, this study investigates whether firms with professor-directors are more likely to exhibit higher corporate social responsibility (CSR) performance ratings. Results indicate that firms with professor-directors do exhibit higher CSR performance ratings than those without. However, the influence of professor-directors on firm CSR performance ratings depends on their academic background—the positive association between the presence of professor-directors and firm CSR performance ratings is significant only when their academic background is specialized (e.g., science, engineering and medicine). Finally, this positive association weakens when professor-directors hold an administrative position at their universities.

In this article, we demonstrate the relevance of eye-tracking experiments in social and environmental accounting (SEA) research. Up to now, this type of design has been used in some areas within accounting research, but SEA has been neglected. If one is to adopt a user perspective [Merkl-Davies, D. M., and N. M. Brennan. 2007. “Discretionary Disclosure Strategies in Corporate Narratives: Incremental Information or Impression Management?” Journal of Accounting Literature 27: 116–196; 2011. “A Conceptual Framework of Impression Management: New Insights from Psychology, Sociology and Critical Perspectives.” Accounting and Business Research 41 (5): 415–437], the investigation and the understanding of the way social and environmental information affects user perceptions and decisions requires, among other tools, the use of eye-tracking setups. We discuss the need for eye-tracking experiments in SEA research and provide some preliminary evidence on their usefulness by conducting an illustrative experiment.

In this paper, we focus on a relatively underexplored aspect of sustainability—workforce reductions. We investigate the determinants and consequences of the decisions made by French firms to use press releases in order to announce downsizing operations. We also examine whether the content of press releases has an impact on investor reactions to downsizing announcements. Particularly in the French context, downsizing operations reflect negatively on corporate social responsibility with respect to employees, and we anticipate that French managers will use disclosure strategies to counter a potential legitimacy threat. Our sample consists of 227 downsizing operations announced between 2007 and 2012 by 119 French listed firms. We find that the disclosure of press releases is driven by both contextual and legitimacy factors. We also find that press releases are associated with more negative reactions to downsizing announcements than when there is no press release, particularly in the case of proactive operations (i.e., implemented by firms with improving performance). A content analysis of press releases indicates that firms, on average, engage in a reactive impression management strategy in their disclosure that consists of attributing downsizing operations to external factors. Moreover, investors penalize the use of proactive arguments, particularly when they are used to justify proactive operations. Overall, our results show that, in the French case, disclosure strategies and their consequences on the financial markets relate to a legitimacy perspective.

Purpose The purpose of this study is to examine the usage of non-financial information related to corporate social responsibility (CSR) issues from the perspective of sell-side analysts (SSAs) and buy-side analysts (BSAs) employed in Poland-based financial institutions. Design/methodology/approach The authors conducted a survey among financial analysts with the use of the computer-assisted telephone interview (CATI) method and an online questionnaire. The adopted methods included purposeful, quota sampling and snowball sampling. Findings Results indicate that financial analysts make use of CSR disclosures very rarely and attribute little importance to such information. Despite the limited use of CSR information and negative assessments of its quality, respondents are in favor of making a more frequent use of CSR disclosures. Finally, except for an analyst’s attitude toward the “comparability in time” information characteristic, results do not indicate any significant differences between SSAs’ and BSAs’ responses. Research limitations/implications The limited number of questionnaires prevented the use of more sophisticated statistical methods and the formulation of conclusions that could apply to the entire population. In addition, although the adopted CATI method provides a number of advantages, it also has its limitations – interviews had limited time and the questions along with the answers had to take into account the respondents’ limited perception ability. Practical implications The results of this study suggest that CSR disclosures have limited usage for financial analysts, at least in the Polish context. Further, not only do respondents rarely make use of CSR disclosures but they also give low assessments to their quality. This implies that the concept of CSR remains relatively far from becoming a priority; hence, some measures and incentives may be necessary. Originality/value The paper adds to a relatively small number of studies that have dealt with the issue of non-financial information and its usefulness for SSAs and BSAs in Central and Eastern Europe.

This paper reviews the literature on the association between environmental disclosure and environmental performance. Results from previous studies are mixed. While some studies conducted in an economic perspective document a positive association between these two environmental dimensions, other studies obtain a negative association that they mainly explain using arguments drawn from socio-political theories. Given these conflicting results, we conduct a meta-analysis to provide an average direction and magnitude of the association between environmental disclosure and environmental performance. The meta-analysis reveals that there is no association between the environmental disclosure and the environmental performance of the 2,672 companies of our cumulated sample, and that this non-association remains constant over time despite the continuous reinforcement of environmental regulations. Based on these results, we discuss theoretical and methodological issues associated with prior literature that could explain this overall non-association and we suggest avenues for future research.

Astroturf organizations are fake grassroots organizations that hide their true identity by using deceptive and fraudulent tactics as propaganda, but try to convince the public that they are authentic. In this study, we focus on the potential influences of astroturf organizations within the context of prosocial behaviors. Building on the notion that deceptive advertisements engender distrust and undermine the trustworthiness of subsequent advertising, we suggest that people who read messages from astroturf organizations will become more distrustful toward nonprofit organizations and will display lower willingness to engage in prosocial behaviors than people who read messages from grassroots organizations. Results from studies 1 and 2 indicate that messages from astroturf organizations can engender people’s distrust toward nonprofit organizations, thereby lowering their willingness to engage in prosocial behaviors. In addition, the negative effect of astroturf organizations is moderated by skepticism toward advertising. Given that the insidious use of astroturf organizations is growing in popularity, we provide meaningful insights into the influence of fake grassroots organizations, with the possibility to forewarn the public about their undesirable effects on the community.

In 2001, France became one of the few countries to require corporate social responsibility (CSR) reporting through its Nouvelles Régulations Économiques #2001-420 (NRE). However, initial compliance with the statute was low, a factor implying the law lacked normativity. In this exploratory study, we attempt to determine whether there is movement toward normativity by examining the change in CSR disclosure from 2004 in comparison to 2010 for a sample of 81 publicly traded French firms. We measure both the space and the quality of CSR disclosures, including in the latter a measure based on informational quality attributes as discussed by the International Accounting Standards Board, the Financial Accounting Standards Board, and the Global Reporting Initiative. We find significant increases in the space allocated to CSR disclosure, as well as some evidence of increased quality; although the informational quality of the disclosures remains quite low and fewer firms are including negative performance information in their reports. Finally, we document that differences in disclosure space and quality in 2004 appeared to be associated with legitimacy-based variables and that those relations remain largely unchanged in 2010. As such, it appears that the NRE’s goals of increased transparency remain unmet.

Sustainability discourse is becoming ubiquitous. Still, a significant gap persists between corporate sustainability talk and practice. Prior research on corporate sustainability reporting has relied primarily on two competing theoretical framings, signaling theory and legitimacy theory, which often produce contradictory results regarding the significance and effects of such disclosures. Thus, despite this substantial body of research, the role that sustainability disclosures can play in any transition toward a less unsustainable society remains unclear. In an effort to advance our collective understanding of voluntary corporate sustainability reporting, we propose a richer and more nuanced theoretical lens by drawing on prior work in organized hypocrisy (Brunsson, 1989) and organizational façades (Abrahamson & Baumard, 2008; Nystrom & Strabuck, 1984). We argue that contradictory societal and institutional pressures, in essence, require organizations to engage in hypocrisy and develop façades, thereby severely limiting the prospects that sustainability reports will ever evolve into substantive disclosures. To illustrate the use of these theoretical concepts, we employ them to examine the talk, decisions, and actions of two highly visible U.S.-based multinational oil and gas corporations during the time period of significant national debate over oil exploration in the Alaskan National Wildlife Refuge. We conclude that the concepts of organizational façade and organized hypocrisy are beneficial to the sustainability disclosure literature because they provide theoretical space to more formally acknowledge and incorporate how the prevailing economic system and conflicting stakeholder demands constrain the action choices of individual corporations.

This paper examines how the U.S. accounting profession, through the American Institute of Certified Public Accountants (AICPA), sought to restore its damaged reputation and re-legitimize its claim to self-regulation after the Enron scandal. We do so by analyzing the content of AICPA leaders’ web communications to members and outsiders of the Institute between 1997 and 2010 and draw upon the concepts of logics and discourse. We argue that the marketing language surrounding the AICPA’s “Vision Project” prior to Enron (1997–2001) is not durably supplanted by the language of parrhesia, celebrated during the Enron crisis management episode (2002–2004) – it reemerges after 2005, juxtaposed to parrhesia. This study contributes to increasing our understanding of the institutional complexity of the accounting professional field by suggesting that this complexity is, in part, cultivated and reproduced by AICPA leaders’ navigation between different conceptions of being an accountant. Institutional complexity can thus be viewed as a resource, rather than a constraint, which provides flexible impression management opportunities.

In this paper, we seek to provide a description of disclosures arising from various stakeholder groups in the social sphere. As such, we extend Rodrigue’s article “Contrasting Realities: Corporate Environmental Disclosure and Stakeholder-Released Information” (2014. Accounting, Auditing and Accountability Journal 27 [1]: 119–149) by conducting a case study to examine and compare corporate and stakeholder communications made over a three-year period. We specifically focus on the volume and tone of environmental disclosures. We explore the topics emphasised by each party in their respective disclosures and analyse their tone by categorising the information as positive, negative or neutral. Through a detailed quantitative analysis, we highlight the differences in how various actors portray the organisation and its activities. We argue that this is of relevance since neither corporate nor stakeholder disclosures are merely passive reflections of reality, but rather, they play a part in constructing, forming and legitimating particular discourses and constructions of worldviews within society. Our findings demonstrate how these disclosures differ with regard to the topics covered and the tone used; hence, the stakeholder disclosures we analysed present an alternative view of the organisation’s activities. By systematically analysing and comparing different parties’ disclosures, we contribute to the literature by extending our understanding of stakeholder information releases in the light of corporate disclosures.

In this paper we investigate whether, and how, corporate management strategically uses disclosure to manage the perceptions of different organizational audiences. In particular, we examine the interactions between the FIAT Group and three of its key organizational audiences—the local press, the international press, and the financial analysts, which are characterized by different levels of salience for the company. We focus on both how management reacts to the optimism level existing within each audience and how the narrative disclosure tone adopted by FIAT influences the ex-post optimism in the local and international press or in the financial analyst community. We investigate the disclosure of the FIAT Group over a 6-year period (2004–2009), during which 70 price-sensitive press releases were published. On the basis of 1,887 (331) news articles published in Italian (international) newspapers and 411 analyst reports, we report evidence of different strategic patterns in the interaction processes between FIAT and its audiences. Our findings also indicate some differences in the way FIAT is affected by, and in turn, affects the sentiment of each audience, thus highlighting that the salience of the stakeholder is an important driver of the adoption of impression management techniques. Taken together, our findings point to issues related to setting the ‘‘tone at the top’’ and potential ethical matters.

Purpose – CSR disclosure is receiving increased attention from the mainstream accounting research community. In general, this recently published research has failed to engage significantly with prior CSRthemed studies. The purpose of this paper is threefold. First, it examines whether more recent CSR reporting differs from that of the 1970s. Second, it investigates whether one of the major findings of prior CSR research – that disclosure appears to be largely a function of exposure to legitimacy factors – continues to hold in more recent reporting. Third, it examines whether, as argued within the more recent CSR-themed studies, disclosure is valued by market participants. Design/methodology/approach – Using Fortune 500 data from the late 1970s (from Ernst & Ernst, 1978) and a more recent sample (2010), we identify differences in CSR disclosure by computing adequate measures in terms of disclosure breadth and comparing them for any potential changes in the influence of legitimacy factors between 1977 and 2010. In the second stage of our analysis, we use a standard valuation model to compare the association between CSR and firm value between the two time periods. Findings – We first find that the breadth of CSR disclosure increased significantly, with respect to both environmental and social information provision. Second, we find that the relationship among legitimacy factors and CSR disclosure does not differ across our two time periods. However, our analysis focusing on environmental disclosure provides evidence that industry membership is less powerfully related to differences in reporting, but only for the weighted disclosure score. Finally, our results indicate that CSR disclosure, in apparent contrast to the arguments of the more recent mainstream investigations, is not positively valued by investors. Research limitations/implications – We explore changes in CSR disclosure only for industrial firms and as such we cannot generalize findings to companies in other industries. Similarly, we focus only on companies in the United States while different relationships may hold in other countries. Further, our disclosure metrics are limited by the availability of firm-specific information provided by Ernst & Ernst. Limitations aside, however, our findings appear to suggest that the failure of the new wave of CSR research in the mainstream accounting community to acknowledge and consider prior research into social and environmental accounting is potentially troublesome. Specifically, recent CSR disclosure research published in mainstream journals often lends credence to voluntary disclosure arguments that ignore previous contradictory findings and well-established alternative explanations for observed empirical relationships. Practical implications – This paper provides supporting evidence that the unquestioned acceptance by the new wave of CSR researchers that the disclosure is about informing investors as opposed to being a tool of legitimation and image enhancement makes it less likely that such disclosure will ever move meaningfully toward transparent accountability. Originality/value – Our study suggests that CSR disclosure, while used more extensively today than three decades ago, may still largely be driven by concerns with corporate legitimacy, and still fails to provide information that is relevant for assessing firm value. As such, the failure of the mainstream accounting community to acknowledge this possib

This paper investigates potential motivations for late adopting U.S. companies to begin disclosing environmental liability amounts in their financial statements. Based on a review of 10-K reports filed from 1998 through 2012, inclusive, we identified 55 firms initiating environmental liability disclosure over the period, with all but three doing so by 2006. Focusing on the disclosers up through 2006, we argue that the companies may have used the disclosure as a tool of impression management to avoid potential stakeholder mis-estimation of previously undisclosed liability exposures. We first compute tests to identify firms that may have begun the disclosure due to (1) materiality and (2) concerns of having proprietary costs imposed upon them due to changes in their environmental media coverage and environmental performance, and we find very few cases where these explanations might hold. For the remaining companies, we compared their newly disclosed liability amount, on average, with the mean level of environmental liability being disclosed by other firms in the year prior to the sample companies’ initiation, and find that it is significantly smaller, thus supporting our impression management argument. Finally, we find that overall level of environmental liability amounts was consistently decreasing over the time frame examined, suggesting that earlier adoption would have made more sense. However, it may also explain why almost no new firms began disclosing after the mid-2000s.

Purpose: This study aims at providing a proof of the factors associated with sustainability assurance demand by French companies.

Design/methodology/approach: This research used panel data methodology.

Findings: The study results demonstrate that institutional ownership and the presence of corporate social responsibility (CSR) committee within the management board have an effect on the demand for sustainability assurance. The results also reveal that three types of stakeholders (employees, environment and customers) positively affect the demand of voluntary sustainability assurance.

Originality/value: The paper provides a preliminary proof on the effects of the governance of corporation and pressure of some groups of stakeholders on the voluntary demand of sustainability assurance in France.

The purpose of this editorial is twofold. First, to present the reasons as to why we asked Financial Reporting to host a Special Forum on Social and Environmental Accounting and Accountability (SEAA) research. Second, to summarize the contributions that are published therein and provide Financial Reporting readers with insights on the hot topic of SEAA research today. The idea of this Special Forum was conceived during a period in which Italian Academia was (and still is) undergoing many changes, including both an active involvement but also, and unfortunately, passive reforms – especially when these changes are brought into the system with a pronounced top-down approach. Undoubtedly, internationalization in Italy has become one of the major challenges and a sensitive topic in academic debates, particularly after the new national procedures on the accreditation to become Associate or Full Professor were put in place. Too often, internationalization is interpreted as the necessity to merely publish in international journals but we believe this outcome is “only” the result of a much more complex process. In fact, internationalization requires being open to new and different methodological approaches, being ready to identify relevant research questions with wide implications and, above all, the ability to work and study in an international environment and collaborate within an international network.

In contrast to most other countries, South Korea’s Ministry of Environment has been providing substantial guidance for corporate stand-alone environmental reporting. Motivated by the existence of such support, we investigate the extensiveness of environmental disclosure for a sample of South Korean firms. Results show higher disclosure scores than those reported in other studies using the same scale. Further, South Korean disclosure is more extensive than that of a matched sample of comparable US companies. While conceding that disclosure extensiveness is not necessarily associated with higher quality, our results suggest authoritative guidance for stand-alone reporting may improve corporate environmental disclosure practices.

The emergence of environmental governance practices raises a fundamental question as to whether they are substantive or symbolic. Toward that end, we analyze the relationship between a firm’s environmental governance and its environmental management as reflected in its ultimate outcome, environmental performance. We posit that substantive practices would bring changes in organizations, most notably in terms of improved environmental performance, whereas symbolic practices would portray organizations as environmentally committed without making meaningful changes to their operations. Focusing on a sample of environmentally sensitive firms, results are consistent with environmental governance mechanisms being predominantly part of a symbolic approach to manage stakeholder perceptions on environmental management, having little substantial impact on organizations. Statistical analyses show mostly that there is no relation between environmental governance mechanisms and environmental performance, measured in terms of regulatory compliance, pollution prevention, and environmental capital expenditures. However, there is some indication that environmental incentives are associated with pollution prevention. Interviews with corporate directors shed further light on these results by underlining that environmental governance mechanisms are employed at the board level to protect the organization from reputational and/or regulatory harm, but are not necessarily intended to proactively improve environmental performance.

In this commentary, we reflect on Thornton’s (2013) extension to his original CA Magazine article on environmental accounting (Thornton, 1993) as well as the original contribution. Given our background in social and environmental disclosure research, we question Thornton’s narrow focus on environmental accounting as it relates to the debits and credits of financial reporting, and we attempt to illustrate the problems that voluntary environmental disclosure creates with respect to reduced incentives for companies to improve environmental performance. We conclude by identifying our concerns with the future of environmental accounting given the recent ‘rediscovery’ of the topic by mainstream accounting researchers.

In this study, we investigate the extent to which firms’ environmental performance is reflected in perceptions of their environmental reputation and whether environmental disclosure serves to mediate the negative aspects of poorer environmental performance associated with those assessments. We also examine whether differences in environmental performance and environmental disclosure appear to be associated with membership selection to the Dow Jones Sustainability Index (DJSI), a factor we also believe may be associated with perceptions of environmental reputation. Based on a cross-sectional sample of 92 US firms from environmentally sensitive industries, we find that environmental performance measured using Trucost environmental performance scores is negatively related to both reputation scores and membership in the DJSI. We argue this is due to the more extensive disclosure levels of firms that are worse performers and the finding of a significant positive relation between environmental disclosure and both the environmental reputation measures and DJSI membership. Finally, we show that the DJSI designation positively influences perceptions of corporate reputation. Overall, our results suggest that voluntary environmental disclosure appears to mediate the effect of poor environmental performance on environmental reputation. Perhaps more troubling, our results also suggest that membership in the DJSI appears to be driven more by what firms say than what they do. Thus, like voluntary disclosure, the DJSI may actually be hindering improved future corporate environmental performance.

The purpose of this paper is to examine three potential explanations for the corporate choice to disclose environmental capital spending amounts.

Using archival data from a sample of Fortune 500 US firms operating in industries subject to both the Environmental Protection Agency’s (EPA) TRI program and the Occupational Safety and Health Administration’s Hazard Communication Standards, the authors conduct quantitative threshold tests to first investigate whether disclosure appears to be a function of the materiality of the spending. Using statistical tests, including multiple regression analyses, the authors next attempt to differentiate the choice to disclose across voluntary disclosure theory and legitimacy theory arguments.

First, the authors find that, for the overwhelming majority of observations, the disclosed amounts are not quantitatively material. This suggests that non‐disclosure is likely due to immateriality. Next, their findings show that disclosing firms do not exhibit improved subsequent environmental performance relative to non‐disclosing companies. Further, controlling for firm size and industry class, they find the choice to disclose is associated with worse environmental performance.

The sample includes only relatively larger firms from certain industries and this limits the generalizability of the findings. Smaller firms and those from excluded industries may have other reasons to choose to disclose environmental information. Further, the authors rely on TRI data to assess pollution performance, but TRI is self‐reported and its reliability is only as good as the inputs. Finally, although environmental capital spending is potentially relevant information, this investigation does not examine other types of environmental information disclosure.

This paper provides corroborating evidence that companies use the disclosure of environmental capital spending as a strategic tool to address their exposures to political and regulatory concerns. Hence, interpreting disclosed environmental information would appear to require careful understanding of the underlying motivations.

This paper extends the environmental accounting and reporting literature by contributing to the unresolved question of what drives differences in the corporate disclosure of environmental information. The authors add to this body of research by investigating the disclosure of one specific piece of environmental information, the amount of capital expenditures incurred for pollution abatement and control.

The purpose of this paper is to investigate the use of graphs in corporate sustainability reports and attempt to determine, first, whether the use of graphs appears to be associated with attempts at impression management, and second, whether differences across three levels of reporting regulatory structure are associated with differences in the level of impression management.

The purpose of this paper is to investigate whether firms use graphs in their sustainability reports in order to present a more favorable view of their social and environmental performance. Further, because prior research indicates that companies use social and environmental disclosure as a tool to reduce their exposure to social and political pressures (the legitimacy argument), we also examine whether differences in the extent of impression management are associated with differences in social and environmental performance. Based on an analysis of graphs in sustainability reports for a sample of 77 U.S. companies for 2006, we find considerable evidence of favorable selectivity bias in the choice of items graphed, and moderate evidence that where distortion in graphing occurs, it also has a favorable bias. Our results regarding the relation between impression management and performance are mixed. Whereas we find that graphs of social items in sustainability reports for companies with worse social performance exhibit more impression management, no significant relation between environmental performance and impression management in the use of environmental graphs is found. Overall, our results provide additional evidence that corporate sustainability reporting, as it currently exists, appears to be more about fostering positive public relations than providing a meaningful accounting of the social and environmental impacts of the firm.