Australian corporate environmental reporting: A comparative analysis of disclosure practices across voluntary and mandatory disclosure systems

Purpose - This paper extends the literature in the environmental disclosure area by examining annual report disclosure practices of Australian companies within the combined voluntary and mandatory environmental disclosure system. Design/methodology approach - Content analysis was used to investigate the environmental disclosures over three consecutive years in the annual reports of companies that would be subject to environmental regulation and/or perceived to be environmentally sensitive. Findings - The study finds that Australian listed companies have a propensity to disclose higher levels of positive environmental disclosures in the voluntary sections of the annual report than in the statutory sections of the annual report. Research limitations/implications - These results suggest that regulatory authorities may need to acknowledge the usefulness of mandatory disclosure requirements as a potential means of counter-balancing the voluntary disclosure system. It has been argued that the annual report is not the sole disclosure medium used by companies. Further research may not only investigate these issues but also add weight to arguments for more environmental accountability. Practical implications - The results suggest that companics adopt different disclosure approaches when the disclosures are potentially under surveillance or increased scrutiny via legislated environmental disclosure requirements. Originality vallue - This research provides evidence that companies continue to use greater levels of self-puffery within a voluntary reporting environment than within a mandatory reporting environment, and suggests that stakeholders may be more likely to receive information that is less favourable to the corporation (and potentially more decision-useful to stakeholders) within a legislated disclosure environment.