A Study On The Media Of Corporate Environmental Disclosure

As a result of the growing importance attached to environmental concerns and the subsequent need to disclose environmental information to stakeholders, firms have tended to use environmental disclosure as a means to communicate social and environmental information to their stakeholders and the external environment. But annual financial statements have traditionally been the most frequently used source in communicating social information. Recently more and more companies disclose stand-alone reports, such as environment reports, sustainability reports and corporate social responsibility reports, to communicate environmental information. The paper aims to explore the differences and interrelationship between environmental disclosures in annual reports and stand-alone reports, and to identify the factors influencing the decision to disclose stand-alone report on the basis of stakeholder theory.The paper is structured as follows. Part 2 introduces a theoretical framework for environmental disclosure using stakeholder theory and Ullmann's thee-dimension stakeholder model while part 3 provides a brief review of the prior research which has explored the disclosure media and determinants of environmental disclosures. Part 4 explores differences between environmental disclosures in annual and stand-alone reports and part 5 examines the interrelationship between them. Part 6 identifies the factors influencing the decision to disclose a stand-alone report and the last part presents the summary of the paper.The paper's findings include:(1) annual report is still the main channel of environmental disclosure, but more and more firms are disclosing stand-alone reports; (2) the quantity of environmental information in stand-alone report is higher than that in annual report but the quality is relatively lower; (3) environmental disclosure in annual and stand-alone reports improves each other rather than substitute; (4) the decision to disclose social report, according to Ullmann's conceptual framework(1985), can be explained by media power, strategic posture and economic performance, although the power of shareholders and creditors is quite limited.The results reveal that, pro-active strategic posture of the managers plays a critical role in disclosing environmental report. Disclosing social report is a tool to monitor and manage the company's relationship with all kinds of stakeholders, and a new way and new idea to create value for the company and society.