This study examines the issue of greenwashing among corporate high emitters subject to government scrutiny. To do so, we investigate the relationship between the actual environmental performance, measured as carbon emissions, of companies subject to the Australian National Greenhouse Energy Reporting Act 2007 (NGER) and their climate-related voluntary disclosures. To measure climate-related disclosure, we construct a climate-related disclosure index based on four prominent frameworks and score corporate report content against that Index. Using a sample of 150 companies with NGER emissions data for Years 2016 and 2017, a period that precedes the issuance of recommendations for disclosure by the Task Force on Climate-Related Financial Disclosure (TCFD), our regression results show a disappointingly low level of climate-related disclosure by most companies. We also find a negative relationship between climate-related disclosure and 1-year lagged environmental performance among companies exhibiting a year-on-year rise in carbon emissions. That is, our findings provide evidence of potential greenwashing by poor environmental performers, presumably to change negative perceptions by stakeholders, as predicted by socio-political theories. In contrast, we find no evidence of greenwashing among companies experiencing a year-on-year decrease in emissions.
This study examines whether environmental-related innovation moderates the association between environmental and financial performance measured respectively as carbon emissions and return on assets (ROA). The sample comprises 119 companies subject to Australia's National Greenhouse Energy Reporting Act (NGER) for the period 2009-2017. The results show that environmental innovation positively moderates the relationship between environmental performance and financial performance. The findings also imply that the impact of environmental innovation in improving environmental performance is observable with a 1-year lag. The results are robust to the alternative financial performance measures of Tobin's Q and Altman's Z score. The findings have important implications for company managers and policymakers and provide useful information on innovation's role in enhancing environmental and financial performance.
This study re-examines both pure technical and scale efficiency of Australian banks using bootstrap data envelopment analysis (DEA). The aim is to improve the choice of variables of the core profit efficiency model which is commonly used in earlier Australian banking efficiency studies. After we introduce the "interest income" over "net interest income" variable in the core profit efficiency model, the proportion of fully pure technical efficient banks decreased to 23% which is significantly lower than 81% which was reported in a recent study. This research argues that the main issue that has contributed to this difference is that improving the choice of variables significantly increases the discriminatory power of efficiency estimates. Additionally, emphasising on statistical properties of efficiency estimates, this study employs bootstrap DEA to provide confidence intervals and bias corrected estimates of pure technical efficiency scores of the sample banks. The bootstrap results show the importance of incorporating sample variation and bias in estimating efficiency scores. Earlier Australian banking efficiency studies ignored such issues. The new findings from the sample banks could have important implications for the banking industry in Australia.
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