This study compares the Internet (corporate web pages) and annual reports as media of social responsibility disclosure (SRD) and analyses what influences disclosure. It examines SRD on the Internet by Portuguese listed companies in 2004 and compares the Internet and 2003 annual reports as disclosure media. The results are interpreted through the lens of a multi-theoretical framework. According to the framework adopted, companies disclose social responsibility information to present a socially responsible image so that they can legitimise their behaviours to their stakeholder groups and influence the external perception of reputation. Results suggest that a theoretical framework combining legitimacy theory and a resource-based perspective provides an explanatory basis for SRD by Portuguese listed companies.

Factors Influencing Social Responsibility Disclosure by Portuguese Companies

The study empirically investigates the relationship between corporate governance and the triple bottom line sustainability performance through the lens of agency theory and stakeholder theory. We claim, in fact, that no single theory fully accounts for all the hypothesised relationships. We measure sustainability performance through manual content analysis on sustainability reports of the US-based companies. The study extends the existing literature by investigating the impact of selected corporate governance mechanisms on each dimension of sustainability performance, as defined by the GRI framework. Our approach allows to identify which governance mechanisms foster triple bottom line performance, also revealing that some mechanisms fit only specific dimension(s) of sustainability. The fact-based findings provide support for a new beginning in the theorising process in which the theories must try not only to provide rationale for the impact of corporate governance on sustainability, but also to explain which dimension of sustainability might be more affected. The most important implication for practitioners is the support for sustainability practices, which may be gained through implementation of particular corporate governance mechanisms. The findings contribute also to the improvement of the ongoing standard setting process, in particular as it concerns the in-depth revision of the economic dimension of sustainability carried out under the new GRI framework.

Corporate Governance and Sustainability Performance: Analysis of Triple Bottom Line Performance

The voluntary reporting of environmental information has increased in recent years, as attention has focused on the environmental i1npacts of corporate activities. This study examines how corporate environmental performance relates to the level and nature of environmental information disclosed by Australian companies. It employs an innovative measure of environmental performance, using data from the National Pollutant Inventory (NPI). Environmental disclosures are measured using a content analysis index based on the Global Reporting Initiative (GRI) sustainability reporting guidelines (Clarkson, Li, Richardson & Vasvari, 2007). Results from a sample of 51 Australian firms examined in 2002 and 2006 indicate that firms with relatively worse environ1nental performance disclose greater quantities of environmental information. These results are consistent with the predictions of socio-political theories. Evidence regarding the nature of disclosures is mixed. In cross-sectional analyses, the disclosures of poor environmental performers are found to contain a greater proportion of objective and verifiable (i.e. "hard") information. A longitudinal approach however indicates that relative improvements in environmental performance are associated with increased levels of "hard" disclosures. This result is partially consistent with economics-based theories of voluntary disclosure, and has implications for future studies. The paper concludes that, overall, the type of environmental information disclosed does not accurately reflect a firm's underlying environmental performance.

An examination of environmental reporting and its relation to corporate environmental performance

This study examines how both the level and the nature of environmental information voluntarily disclosed by Australian firms relate to their underlying environmental performance. Disclosure is scored using an index developed by Clarkson et al. (2008) based on Global Reporting Initiative (GRI) Guidelines and the environmental performance measure is based on emission data available from the National Pollutant Inventory (NPI). The sample consists of 51 firms that reported to the NPI in both 2002 and 2006. The findings are as follows. First, descriptive statistics indicate that while there was modest improvement in disclosure between 2002 and 2006, the highest disclosure score obtained was just slightly in excess of 50% of the maximum available based on the GRI Guidelines. Second, the results consistently indicate that not only do firms with a higher pollution propensity disclose more environmental information; they also rely on disclosures that the GRI views as inherently more objective and verifiable. Taken together, these results suggest that concerns regarding the reliability of voluntary environmental disclosures in the Australian context remain valid and thereby potentially signal a need for both enhanced mandatory reporting requirements and improved enforcement. In this regard, our study also informs regulatory policy on mandatory disclosures of environmental performance.

Environmental Reporting and its Relation to Corporate Environmental Performance

This paper not only attempts to survey the burgeoning literature on environmental, social and governance disclosures and performance and their effects on firm value, but its focus also lies on highlighting stylised observations coming from the most recent work that has not yet become part of the ‘conventional wisdom’ in the field. In addition, it outlines some of the crucial knowledge gaps and interesting questions that have not, as of yet, been addressed and thus outlines a potential agenda for future research on socially responsible investing. Lastly, it introduces the papers published in this special issue of the British Accounting Review.

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The effects of environmental, social and governance disclosures and performance on firm value: a review of the literature in accounting and finance

This study examines the nature and extent of sustainability reporting practices in the various reporting media used by companies listed on the ASX (annual reports, discrete reports and websites). The sustainability reporting practices of the sample are compared with key indicators outlined in the GRI framework. The annual report is found to be the least valuable source of information on corporate sustainability in terms of the number of indicators observed and the diversity of the information provided. The discrete reports and websites provide greater levels of information on sustainability; however the overall levels of disclosure are generally low.

A Survey of Sustainability Reporting Practices of Australian Reporting Entities

Interest in the notion of the possible financial sacrifice suffered by socially responsible investment (SRI) fund investors for considering ethical, social and environmental issues in their investment decisions has spawned considerable academic interest in the performance of SRI funds. Both the Australian and international research literature have yielded largely mixed results. However, several of these studies are hampered by methodological problems which can obscure the significance of reported results, such as the use of small sample sizes, inconsistencies in the time frames selected to analyse performance and different modelling frameworks used to estimate investment returns. This study attempts to redress some of these issues by investigating the returns performance of 89 ethical funds in Australia over the period 1986–2005. Using a multi-factor CAPM model [Fama, E. F., and K. R. French (1996) J. Finance
 51(1), 55] (which controls for factors such as size, book-to-market value and momentum) we find that ethical funds significantly under-perform the market in Australia, particularly in the most recent 5 years of our sample period (2000–2005). Risk adjusted returns (using Jensen’s alpha) indicate that average annual underperformance is around 1.52% in the 2000–2005 period for our sample and .88% over the whole sample period. Our results contrast with many previous studies (both Australian and international), which have not found statistically significant differences in the performance of ethical funds relative to market benchmarks and/or a matched sample of conventional funds.

The Investment Performance of Socially Responsible Investment Funds in Australia.

The importance of sustainability reporting to external stakeholders is reflected in the advent of various reporting guidelines and government inquiries However, evidence of the inadequacy of such reporting, coupled with limited evidence of its use by market participants (such as investors and creditors) for resource-allocation decisions, raises questions about the overall value-relevance of sustainability reporting This study seeks to identify, in the Australian context, whether the level of sustainable reporting is associated with a range of financial and market performance attributes of the firm

An Empirical Examination of the Market Returns and Financial Performance of Entities Engaged in Sustainability Reporting

Part 1 Framework Chapter 1: The IASB: history, current structure and processes Chapter 2: The conceptual Framework of the IASB Part 2 Elements Chapter 3: Contributed equity: capital, reserves and accumulated profits Chapter 4: Revenue Recognition Chapter 5: Provisions and contingencies Chapter 6: Financial instruments Chapter 7: Share based payments Chapter 8: Income tax Chapter 9: Inventories Chapter 10: Property, plant and equipment Chapter 11: Intangible assets Chapter 12: Business combinations Chapter 13: Impairment of assets Chapter 14: Leases Part 3 Disclosure Chapter 15 Principles of disclosure Chapter 16: Presentation of financial statements Chapter 15: Cash flow statements Chapter 18: Segment reporting Part 4 Economic entities Chapter 19: The nature of economic entities Chapter 20: Consolidated financial statements: wholly owned subsidiaries Chapter 21: Consolidated financial statements - inter-entity transactions Chapter 22: Consolidated financial statements - minority interest Chapter 23: Consolidated financial statements - indirect ownership interests Chapter 24: Consolidated financial statements - foreign currency translation Chapter 25: Accounting for investments in associates Chapter 26: Interests in joint ventures

Applying International Financial Reporting Standards

Corporate collapses such as those of Ansett Australia, Centaur Mining, Enron, HIH and One. Tel have rekindled regulators' concerns about the lack of transparency in financial reporting on risks and uncertainties. This paper examines the broad conceptual issues and regulatory responses so far in leading jurisdictions and investigates risk reporting of Australian entities operating in the mining sector. The limited and uneven level of reporting on risk found, in this study, if replicated in other industries and jurisdictions, provides justification for standard-setters considering more explicit requirements than the existing piecemeal rules of restricted scope.

Janice Loftus

Papers

A Survey of Sustainability Reporting Practices of Australian Reporting Entities

The Investment Performance of Socially Responsible Investment Funds in Australia.

An Empirical Examination of the Market Returns and Financial Performance of Entities Engaged in Sustainability Reporting

Applying International Financial Reporting Standards

The Challenge of Risk Reporting: Regulatory and Corporate Responses