Environmental Performance and Voluntary Disclosure on Specific Environmental Activities: An Empirical Study of Carbon vs. Non-carbon Intensive Industries Legitimacy Proactive Approach

Adopting legitimacy proactive approach, this paper examines and evaluates relationship between levels of environmental performance (measured by environmental awards) and the quality of specific voluntary environmental disclosure using a sample of UK FTSE 100 companies. Companies in the sample have been grouped according to industry membership (carbon intensive vs. non carbon-intensive) and environmental performance (poor performers vs. better performers). Descriptive statistics and t-test comparisons have been used to test for variations in the quality and reporting format of voluntary environmental disclosure between the companies in these groups. The Findings reveal that the extent of quantitative environmental disclosure by companies with poor environmental performance in the carbon intensive group was significantly higher than similar disclosures made by either better environmental performers from carbon intensive industries with respect to recycling and carbon footprint activities; or poor environmental performers from non-carbon intensive industries in respect of packaging, carbon footprint, and climate change risk. In contrast, quantitative environmental disclosure by better performers was found to be of a significantly higher quality than similar disclosures made by either poor performers from the non-carbon group in respect to packaging, waste and climate change risk activities; or better performers from carbon intensive group for recycling, climate change risk and carbon footprint activities. In relation to environmental reporting format, non-carbon companies with better environmental performance were significantly more likely than companies in all other groups to use the separation in reporting format for environmental activities. Poor environmental performers from the non-carbon group were significantly more likely to use integration as a form of reporting.