Relationship between determinant factors of disclosure of information on environmental impacts of Brazilian companies/Relacion entre los factores determinantes de la divulgacion de informacion sobre impactos ambientales de empresas Brasilenas/Relacao entre os determinantes da divulgacao de informacoes sobre o impacto ambiental de empresas Brasileiras.
| Autor | Vogt, Mara |
| Cargo | Ensayo |
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Introduction
In the last 30 years, the impact of companies on the environment has become a growing concern among environmentalists, legislators, customers, public authorities and society in general. Thus, 15 years ago companies began to emphasize more on environmental strategies in the light of institutional pressures. These strategies are reported by using indicators and can be classified according to the environmental commitment they represent (Albertini, 2013).
The Legitimacy Theory provides explanations on the motivation of the administration to disseminate information regarding the environment in environmental reports (Wilmshurst & Frost, 2000). In this sense, Magness (2006) points out that one of the principles of the Legitimacy Theory is that companies use the disclosure to transmit information on how they deal with the environment. For Kuo and Chen (2013), in recent years, this theory has become dominant in research about environmental disclosure, since the environmental legitimacy discloses the company as environmentally responsible.
Nossa (2002) emphasizes that awareness and concern with the environment are increasingly present in society. That is why companies invest in environmental programs, because they discover that polluting is the same as wasting, not being efficient and not being able to compete. After all, society pressures government and companies regarding the preservation of the environment, and this pressure increases as the pollution caused by the activities of organizations increases. This is when companies set goals to minimize environmental impacts on emissions of liquid and gaseous effluents, recycling of materials, among others, in order to legitimize their activities.
This study assumes that the environmental performance, transparency and economic performance lead companies to disclose information on the environmental impacts. This expectation is also verified in studies conducted by Hackston and Milne (1996), Zeng, Xu, Dong, and Tam (2010), Bouten, Everaert, and Roberts (2012), Wegener, Elayan, Felton, and Li (2013), Rosa, Guesser, Hein, Pfitscher, and Lunkes (2013) and Rosa, Lunkes, Hein, Vogt, and Degenhart (2014), who have specifically investigated the factors that lead companies to evidence, from the perspective of the Theory of Legitimacy. From the perspective of the Theory of Disclosure, Braga, Oliveira, and Salotti (2009) and Murcia and Santos (2009) also found some factors that lead a company to disclosure. However, none of these studies in particular used the three factors seen in this study.
Several scientific researches have been done in the global context in order to verify the environmental disclosure issue from the perspective of the Theory of Legitimacy. Few of these studies have examined the determinant factors and variables of the disclosure of information on the environmental impacts of companies, used in this study. Research gaps have been identified in relation to (i) measuring the degree of environmental disclosure; (ii) the relationship between the variables of environmental performance factors, transparency and economic performance with the degree of environmental disclosure; and (iii) the relationship between the economic performance factor and the degree of environmental disclosure moderated by the environmental performance and transparency factors.
Given the aforementioned context the question that guides this research emerges: what is the relationship between determinants factors of information disclosure on the environmental impacts of Brazilian companies listed in Brazil Index 100 (IBrX100) Stock Exchange, Commodities and Future Market of Sao Paulo (BM&FBovespa). In this sense, in order to answer that question, the objective of this study is to analyze the relationship between determinants of disclosure of information on the environmental impacts of Brazilian companies listed on the IBrX-100 BM&FBovespa.
The research is justified by the possibility of investigating the variables that showed conflicting results in the literature, since some authors have identified a relationship with positive influence between such relationships, and some others, a negative relationship. Therefore, it is expected that the findings of this research contribute to the existing knowledge on the subject and to provide evidence for further studies.
One aspect that contributes to the originality of the work is the use of the multi-criteria method Trade-Off Decision Analysis (T-ODA), unprecedented in environmental disclosure theme in research conducted in national and international level. From this method, it was possible to measure the degree of environmental disclosure and the relation between the determining factors and variables with this degree. Nossa (2002) stresses that companies must convince society that their environmental practices are not harmful to their profitability, let alone to the environment. Therefore, the identified factors will contribute to the expectations of society, since population can, from these factors that have been shown to be related to increased environmental disclosure, evaluate the company.
To achieve this goal, the paper is organized as follows: in the second section there is a review of the literature; the third section describes the used methodology; the fourth section presents the results. Finally, in the last section there are the conclusions and suggestions for future research.
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Theoretical background
The theoretical framework is divided into three subsections. Initially it focuses on the Theory of Legitimacy. Following, we present the Environmental Disclosure and finally, the assumptions that were based on the main authors related to the theme, which enables to base the methodology adopted in this study.
2.1. Legitimacy theory
According to Buhr (1998) and Czesnat and Machado (2012), the legitimacy of a company is achieved when they show that their organizational activities comply with their social values. Thus, to Neu, Warsame, and Pedwell (1998) the fact that there is the need for companies to operate in a competitive global economy, legitimacy becomes increasingly important, but it is always more difficult to achieve.
Therefore for the company to achieve or maintain legitimacy, it must act in favor of what society establishes, disclosing the measures that were taken. However, in society, there are groups of individuals that are usually identified as stakeholders. It is from the Legitimacy Theory and stakeholders that the company's managers should communicate to these groups their ways of achieving or protecting legitimacy (Cormier, Gordon, & Magnan, 2004).
The Legitimacy Theory is the lens that interprets a series of studies on the reports and on the environmental performance of companies. This theory is used as an explanation for the reactions of companies to threats of their legitimacy. Environmental disclosure is a communication mechanism that companies use to meet the external pressure and to adapt to socially accepted norms (Mobus, 2005).
Companies achieve legitimacy from the moment they demonstrate that they are acting according to the values, rules and beliefs that are set by society. Disclosure is one of the means to achieve this end (Boff, 2007; Czesnat & Machado, 2012).
Lu and Abeysekera (2014) argue that this theory focuses on what society in general expects from companies, since companies that are more likely to be subject to public scrutiny, such as large companies, disclose more social and environmental information to meet the expectations of society.
In short, the Legitimacy Theory focuses on society, taking the social contract as a link between the company and society. However, society is composed of different groups that have different power between one other to influence companies and other groups (Aburaya, 2012). Therefore, we believe that the disclosure of more information can contribute to the legitimacy of companies, increasing its reputation and recognition of society.
2.2. Environmental disclosure
The number of companies that voluntarily disclose their social responsibility activities in their reports is increasing (Hackston & Milne, 1996). According to Deegan and Rankin (1997), the fact that managers voluntarily report environmental data is due to the fact that they consider the information relevant to users. Society may cancel their social contract with the company, unless it commits to the provision of certain information to combat or even offset the negative news exposed to the public. The disclosure is defined as a set of information related to the activities of an organization, its performance and financial implications that are associated to it. In recent years environmental disclosure expanded worldwide significantly (Wang & Bernell, 2013).
By the early twentieth century there was little concern from companies regarding to the preservation and restoration of the environment. This is because at that time the natural resources were considered abundant and managers were using these resources as an inexhaustible source of raw material at a very low cost or even zero (Costa, 2006).
From the moment that the effects of the damage to the environment began to manifest in the form of air pollution, contamination of rivers, seas and soils, degradation of fertile areas, among other consequences, society began asking organizations for greater environmental responsibility. The market selected companies that were committed to the preservation, maintenance and restoration of the environment, whereas the others would jeopardize the future of the planet (Costa, 2006).
In the scientific literature there are social, annual, and sustainability reports, among others. In general, environmental reports include information that is related to the company's management toward the environment and society. It is a right and a duty of society to require from companies the responsibility with the environment...
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