Exploring the quality of corporate environmental reporting

Abstract

Purpose The purpose of this paper is to provide a multidimensional model for assessing the quality of corporate environmental reporting (CER) incorporating both preparer- and user-based views. Design/methodology/approach As opposed to frequently used researcher-chosen proxies, the authors used an online questionnaire asking preparers and users how they assess the quality of a company’s environmental report. Findings The analysis of the responses of 177 users and 86 preparers shows that quantity was not perceived as the most significant element in determining quality. Besides quantity, the respondents also perceived information types, measures used, themes disclosed, adopting reporting guidelines, inclusion of assurance statement and the use of visual tools as significant dimensions/features of reporting quality. Research limitations/implications The online questionnaire has some limitations, especially in terms of researcher being absent to clarify meanings and, hence, possibilities that respondents may misinterpret the questionnaire elements. Practical implications Considering that robust, reliable measurement of reporting quality is difficult, preparers, standard setters and policy makers need multidimensional quality models that incorporate both users’ perceptions of quality and preparers’ pragmatic understanding of the quality delivery process. These will make the preparers informed of whether their disclosure may be falling short of users’ expectations. Originality/value Amid, increasing complexity of CER, the research contributes to the growing body of literature on assessing the quality of CER by developing a less subjective, multidimensional, preparer–user-based quality model. This innovative quality model goes beyond the traditional quality models, subjective author-based quality measures. Focussing on the three dimensions of reporting quality – content, credibility and communication – it also offers a high-level resolution of meaning of CER quality.

Do Board's Corporate Social Responsibility Strategy and Orientation Influence Environmental Sustainability Disclosure? UK Evidence

“…Prior empirical studies indicate that CESD is influenced by the level of environmental risk of companies (i.e. sensitivity to the environment) (Brammer and Pavelin, ; Helfaya, ; Tauringana and Chithambo, ). Thus, we re‐run Equation by splitting our sample into high environmentally sensitive industries (HESI) and low environmentally sensitive industries (LESI).…”

“…To assess the quality of CESD (QUAL_ED), we used a less subjective multi‐dimensional quality model (MQM) developed by Helfaya () for assessing the quality of environmental discourse. This MQM goes beyond the more traditional author‐based disclosure indices, focusing on a preparer‐ and user‐based index that assesses the quantity of CESD and captures a high level of content, credibility and communication of environmental information.…”

“…Second, this paper is innovative in employing a less subjective multi‐dimensional quality model (MQM) to assess the quality of CESD. This MQM goes beyond the more traditional author‐based disclosure index, focusing on a preparer‐ and user‐based index that assesses the quality of environmental information (Beck et al , ; Helfaya, ; Helfaya and Kotb, ). Third, our results suggest that firms with high levels of board CSR strategy, CSR‐oriented boards, the existence of CSR committees, and publishing stand‐alone reports are more likely to disclose more relevant and credible environmental information to gain legitimacy and stakeholders' satisfaction.…”

Mandatory Nonfinancial Disclosure and Its Consequences on the Sustainability Reporting Quality of Italian and German Companies

“…Diouf and Boiral [11] showed that SRQ is perceived by stakeholders as correlated to different dimensions such as balance and clarity of information. Further, by adopting the perspective of both users and preparers, Helfaya et al [12] showed that quality is a multidimensional concept that cannot be understood by measuring only the quantity of disclosed information. These researchers confirmed many important scientific contributions [13][14][15][16][17][18], despite other studies having found a significant correlation between quantitative and qualitative measures of SRQ [19].…”

“…Researchers have consistently developed different metrics and instruments to measure SRQ, most of which are based on a compounded approach and on content analysis [12,[19][20][21][22][23][24][25]. According to Helfaya et al [12] (p. 18) quantity can be considered a secondary factor of quality because the most important determinants concern the content of the reports and are related to aspects of sustainability reporting such as information type, adoption of guidelines, and inclusion of quantitative or financial measures of social and/or environmental performance.…”