We investigate the relationship between 'poor' environmental performance and voluntary environmental disclosures in annual reports of Australian listed companies. 'Poor' environmental performance is defined as those instances where companies have been subject to a successful Environmental Protection Agency (EPA) prosecution at any time between 1994 and 1998. This area of research is important as the Parliamentary Joint Statutory Committee for Corporations and Securities (PJSC) recently concluded that a voluntary system of environmental disclosure would encourage 'better' companies to achieve 'best practice' in this area. Effective 1 July 1998, s299(1)(f) of the Corporations Law required details of a company’s performance in relation to environmental legislation to be included in the Directors’ Report. Due to the ambiguity in how the provision is to be interpreted it was referred to the PJSC which recommended that s299(1)(f) be removed. However, it still remains effective. Consequently, this study investigates what disclosure is in fact made in the period leading up to the mandatory requirements. Results reveal that violating firms' annual reports are limited to copious amounts of positive environmental disclosures of a general nature, with virtually no disclosure about the actual EPA violations. We conclude therefore that it is unlikely that voluntary environmental reporting creates a situation of adequate and appropriate disclosure for poor environmental performers let alone encouraging ‘better’ firms to achieve 'best practice'.
|Number of pages||34|
|Journal||Australian Journal of Corporate Law|
|Publication status||Published - 2006|