Title

An Empirical Investigation of U.K. Environmental Targets Disclosure: The Role of Environmental Governance and Performance

Document Type

Article

Source of Publication

European Accounting Review

Publication Date

1-1-2021

Abstract

Although an increasing number of companies have publicly declared environmental targets (ETs), scant research has been conducted in this area. This study, therefore, investigates the extent of corporate environmental targets disclosure (ETD) and empirically examines whether environmental governance and performance influence the ETD of companies in the U.K. during the 2005–2013 period. We find that firms show a large degree of variability and inconsistency in their reporting of ETs. The results indicate that U.K. firms, particularly those with high environmental sensitivity, tend to disclose symbolic soft or semi-hard ETs to manage stakeholder perceptions and legitimize their existence. Moreover, Global Reporting Initiative (GRI) guidelines, sustainability committees, and sustainability assurance show positive relationships with ETD. We also find that U.K. firms that perform well environmentally are likely to set and disclose hard ETs. These results support stakeholder, legitimacy, and impression management theories. We suggest that there is a need for regulations that will not only enhance the usefulness of ETD but also encourage companies to take serious proactive action to reduce negative environmental impacts, possibly creating ‘win-win’ solutions. Our findings have important implications for policy-makers and various stakeholder groups.

ISSN

0963-8180

Publisher

Informa UK Limited

Disciplines

Computer Sciences | Social and Behavioral Sciences

Keywords

Environmental governance, Environmental performance, Environmental targets, Impression management, Stakeholders

Scopus ID

85102736264

Indexed in Scopus

yes

Open Access

no

Share

COinS