Customer-related performance and the relevance of environmental reporting. (20th July 2018)

• Record Type: Journal Article
• Authors: Radhouane, Ikram; Nekhili, Mehdi; Nagati, Haithem; Paché, Gilles
• Is Part Of: Journal of cleaner production. Volume 190(2018)
• Page Start: 315
• Page End: 329
• Publication Date: 2018-07-20
• Subjects: Customer-based performance -- Environmental reporting -- Environmentally sensitive industries -- Shareholders; Factory and trade waste -- Management -- Periodicals; Manufactures -- Environmental aspects -- Periodicals; Déchets industriels -- Gestion -- Périodiques; Usines -- Aspect de l'environnement -- Périodiques; 628.5
• DOI: 10.1016/j.jclepro.2018.04.149
• Languages: English
• ISSNs: 0959-6526

Abstract

Abstract: Based on the fact that shareholders respond to environmental initiatives according to their perception of the potential related benefits, this study investigates whether customer-related performance affects the value relevance of voluntary environmental reporting. This paper provides a better understanding of the circumstances under which shareholders react positively to voluntary environmental information disclosed by firms operating in environmentally sensitive industries. Using a sample of French listed firms belonging to the SBF 120 stock index over an eleven-year period (2001–2011), our results show that a higher level of environmental disclosure is valued negatively by shareholders for firms operating in environmentally sensitive industries. In line with cost-benefit analysis, shareholders are found to rely more on profitability-based performance (i.e., return on sales and return on assets) than on revenue-based performance (i.e., sales growth) when assessing the relevance of environmental reporting for firms operating in environmentally sensitive industries.