الزامات سهامداران برای افشای محیط شرکت: مقایسه کشور متقابل

We survey individual shareholders in Australia, the UK and the US regarding corporate environmental disclosures. In general, respondents in the three countries are interested in, and positively disposed towards, these disclosures. We observe country and gender differences with Australian and female respondents more in favour of environmental reporting than others. Specifically, respondents require disclosure of an overview of environmental risks and impacts, the environmental policy, performance against measurable environmental targets and information on a range of environmental costs. Most shareholders require environmental disclosures to be audited. Shareholders call for environmental information because they believe managers should be accountable to shareholders for their companies’ environmental impacts. Furthermore, shareholders have indicated the uses for specific types of environmental information. Our results imply that legislators, standard setters and companies have to consider the policy implications of these shareholder views.

Recent times have seen the “(re)birth of social disclosures, the evolution of triple bottom line reporting and sustainability reporting” (Deegan, 2004, p. 91). Annual reports, sustainability reports and triple bottom line (TBL) reports now often refer to corporate accountability and community license to operate (Deegan, 2004) and the number of companies reporting these issues has increased (O’Dwyer & Owen, 2005). For example, the number of the top 100 US companies that publish a corporate responsibility report has increased from 37 in 2005 to 74 in 2008 (KPMG, 2008). The Chief Executive Officers (CEOs) of Global Fortune 500 companies believe that environmental credibility will in future be only marginally less important than financial credibility (University of Cambridge, 2003). They also identify environmental credibility as one of six key elements that will influence corporate reputation. Deegan, Cooper, and Shelly (2006) and Simnett, Vanstraelen, and Chua (2009) document the increased use of assurance statements in TBL reports. Furthermore, institutional investors increasingly regard social, ethical and environmental (SEE) information as relevant for decision-making (Solomon & Solomon, 2006). Finally, more than 80% of capital market intermediaries and auditors in a CPA Australia (2009) survey in Australia, the UK and Hong Kong, in the midst of a financial downturn, indicate that interest in socially and environmentally responsible portfolios will either increase or remain unchanged over the next 12 months. Research has shown for some time that there are country differences in financial reporting in general (see for example Ali and Hwang, 2000, Gray, 1988, Nobes, 1998 and Rahman et al., 1996) and social and environmental reporting more specifically (see for example, Halme and Huse, 1997, Holland and Foo, 2003, Silberhorn and Warren, 2007 and Van Der Laan Smith et al., 2005). Country comparisons are increasingly published in accounting journals, such as the Simnett et al. (2009) study in The Accounting Review comparing voluntary assurance of CSR reporting in 31 countries and the Choi and Wong (2007) study in Contemporary Accounting Research regarding auditor governance functions across a range of countries. KPMG, 2005 and KPMG, 2008 reports on the disclosure and assurance of corporate responsibility reporting in 22 countries and these reports reveal significant country differences, for example a much larger proportion of UK companies disclose and assure these reports than do US or Australian companies ( KPMG, 2008). Surveys in different countries report different results (see Section 2 for a summary of this research), but since these surveys use different questions, comparisons are problematic. Since we know there are country differences in reporting and assurance, an interesting question is whether these reporting differences are driven by shareholder requirements for reporting and assurance. The use of the same survey over three countries presents the first opportunity for comparisons of this nature in the accounting literature. The inclusion of three countries also improves the prospects of generalising the results. According to Wilmhurst and Frost (2000), management mostly considers shareholders and legislation in their environmental disclosure decision-making process. Regulators (both government and stock exchanges) have also tended to focus their attention on the information needs of shareholders (Deegan, 2004). Nevertheless, calls for environmental reporting standards and audits (e.g. Beets & Souther, 1999) have largely gone unheeded. Although institutional investors and individual shareholders may share similar (wealth maximisation) goals, individual shareholders can only rely on publicly available information, whereas institutional investors have the means to also gather additional private information. Solomon and Solomon (2006, p. 564) show that institutional investors develop “sophisticated private [social and environmental] disclosure channels”, because they regard public disclosures as inadequate for their decision-making. Given that regulators aim to protect shareholders by ensuring the availability of relevant information, they should arguably focus on the needs of individual shareholders, who are reliant on regulation because they are not able to gather private information. Therefore it is important to consider the environmental information needs of these individual shareholders. Their needs, including whether they need environmental information, the kinds of environmental information they need, whether they want it assured, and their reasons for needing the information, are largely unknown and are addressed by this study. We discuss the prior research in more detail in the next section, but in summary, there are relatively few studies that examine the environmental information needs of individual shareholders and none in the accounting literature since 1999. Given the increased importance attributed to the environment as a business issue documented above, we expect shareholders to be increasingly concerned about the possibility of environmental risk and liability and therefore to be more interested in corporate environmental disclosures than before. Our study contrasts with prior studies as they do not ask about specific environmental disclosures, do not consider the needs of shareholders in more than one country and do not explore the reasons why shareholders may require/need environmental information. Our results highlight country differences and we also focus on other differences, for example the gender and age of respondents. We restrict our study to Anglophone countries to avoid any translation issues. Some of the largest Anglophone economies are Australia, the United Kingdom (UK) and the United States of America (US). We use an online questionnaire and analyse the results to determine if there are any significant differences between the views of shareholders in the three countries while we control for respondents’ investment decision orientation (making own decisions vs. relying on others), age, gender and retirement status. Apart from the research community, our results have particular relevance for government policy development, accounting standard setters, such as the IASB, FASB and the SEC, and stock exchange rules regarding (environmental) disclosures. Policy makers will find the views of shareholders more compelling than any other stakeholder group. At the same time other stakeholders, such as environmental groups, will be interested to know that shareholders share their enthusiasm for corporate environmental disclosure, albeit perhaps for different reasons. Managers will also be interested in the differences in shareholder disclosure expectations between these countries and between the genders. In the next section we discuss the background and prior research, followed by the development of our expectations. The method, including questionnaire development, is then explained, followed by the results and, finally, the discussion and conclusion sections.

We develop three expectations based on agency theory and explore country differences regarding shareholder requirements for environmental information. We use a survey of shareholders in three important western, Anglophone countries (Australia, the UK and the US) to gather evidence in support of our expectations. We find support for our three expectations that most shareholders require more specific, audited environmental information from companies for investment decision-making purposes. Although there are not many comparable surveys reported in the literature, our survey shows that the agreement levels among shareholders regarding environmental information has increased. The specific comparable results are:Increased societal attention to the environment already has financial consequences for companies through carbon trading and increased regulation and penalties. Shareholders are evidently interested to ensure that they are apprised of the environmental matters that affect their investments. More importantly, there is evidence that shareholders are using specific information, or are planning to use it, something that has not been reported in the literature before. The specific information that shareholders call for and say that they use or would use, and the level of detail, is an indication of what kind of information is needed. Our findings show that shareholders need detailed and specific environmental information from companies that is also audited, in order to reduce information asymmetry. More than two thirds of respondents want environmental information for investment decision-making. However, an even larger percentage cites accountability as a reason. Accountability implies both responsible environmental management and giving an account of the environmental management actions taken. Shareholders gave different reasons for the specific environmental information items that they use (or would use), i.e. investment decision-making, accountability and own interest. Not only does this imply that shareholders require environmental disclosure for more varied reasons than investment decision-making only, but it also shows that companies need to disclose a range of information items to meet these different requirements. We did not explore these matters further, but the results may indicate that shareholders need environmental risk and liability information for investment decision-making, but other types of information to ensure that their non-financial needs are met, such as the need to associate with companies with good social norms who are seen as good corporate citizens. Since we have respondents from three countries responding to the same survey, we can make direct country comparisons that are meaningful, something other studies in the extant literature could not do. We test for country differences using an ANOVA and doing regression analyses. We do find country differences. Australian respondents are more positive than UK respondents regarding many environmental disclosure issues. For some questions, American respondents are also more positive than UK respondents. A comparison of our results with the KPMG (2008) survey of CSR reporting in several countries leads to interesting conclusions. According to the KPMG survey, among our three countries, the UK had the highest level of reporting 91% (of the top 100 companies) followed by the US (74%) and Australia had the least (45%). Simnett et al. (2009) use 2005 data and include all companies, not just the top 100, and report that 13% of UK companies and 4% of both US and Australian companies have sustainability reports. We find that Australian respondents expressed the highest levels of agreement with the disclosure of environmental information followed by US respondents and then UK respondents, so directly opposite to the actual reporting done by companies. More shareholders are calling for disclosure in the country where fewer companies are disclosing, therefore different levels of reporting is not driven by shareholder demand. Our results indicate a need for more Australian companies to disclose environmental information. Another aspect of the KPMG survey was that of assurance of CSR reporting. KPMG found that 55% of UK reports, 42% of Australian reports and 14% of U.S. reports include an assurance statement. Simnett et al. (2009), using 2005 data, but including all companies, not only the top 100, show that 43% of UK, 47% of Australian and 6% of US sustainability reports include an assurance statement. Our survey reveals that 55% of UK respondents, 70% of Australian respondents and 53% of US respondents want companies to publish an assurance statement. Our results indicate that there is a need for more companies to provide assurance statements, particularly in the US and in Australia. It is worth noting that, despite these country differences, respondents to our survey in all three countries call for disclosure of the same kinds of corporate environmental information for the same reasons, indicating widespread support for the need for environmental information to reduce information asymmetry between shareholders and management. This is a reason to be optimistic about the prospect of generalising the results to other countries. An implication from our country difference finding is that companies operating in these countries need to be aware of these different shareholder expectations regarding the disclosure of environmental information. Researchers and regulators should also take note of these differences. We observe significant gender differences in our results. Female respondents are significantly more positive than male respondents regarding the disclosure of environmental information. Gender differences have been studied in the literature, for example, Croson and Gneezy (2009) suggest that women are more risk averse than men and Powell and Ansic (1997) found that females are less risk seeking than males and that females adopt different strategies in financial decision environments. Given that women are more risk averse, their requirements for environmental information could be indicative that they need the information to understand the underlying risk of their investments. We are not aware of studies that have found risk aversion to manifest in a higher disclosure requirement. It is therefore important that future research considers this point. It is also important to note that age and retirement status did not make a difference to shareholders’ views regarding environmental disclosure. Furthermore, not surprisingly, a higher percentage of those making their own investment decisions cite investment decision-making as a reason than those who claim to rely on others for advice. These are potentially important results, because it indicates that environmental information is especially needed by investors who make their own decisions and they want to base those decisions on, among other information, environmental issues. The call for audited environmental disclosure involves both companies and regulators in the process of disclosure. Regulators have traditionally given primacy to the information needs of shareholders, however, this has not led to meaningful environmental disclosure rules (Deegan, 2004). Individual shareholders, specifically those who make their own investment decisions, do not have access to private information (in the way that institutional investors do – see Solomon & Solomon, 2006) and have to rely on regulators to ensure they get sufficient and reliable information to reduce information asymmetry and enable capital markets to operate efficiently (Eisenhardt, 1989). We suggest that the time has come for companies, government, the accounting profession and other standard setters and regulators to take note of these shareholder opinions and to consider compulsory corporate environmental disclosure as a means to promote greater accountability. We survey only shareholders. The views of other stakeholders can also be sought. We survey only individual (retail) shareholders. From the viewpoint of regulators, an argument as to why the disclosure needs of individual investors should take precedence over others is that they are the group who typically have small shareholdings and have no direct access to company information. They need to be protected by ensuring the availability of information to all. However, our results cannot be generalised to other classes of shareholders.