Voluntarism versus regulation

Abstract

PurposeThe purpose of this paper is to explore the development of environmental disclosure during periods of voluntarism and during periods with changed statutory requirements. More specific, the question is how volume and content variety of environmental disclosure in financial statements are immediately affected by statutory regulations.Design/methodology/approachIn order to compare the effects of such regulations with the development in environmental disclosure during periods without any changes in statutory requirements, a longitudinal study is conducted to test five specific hypotheses. A quasi‐experiment with pre‐ and post‐testing of disclosure volume and content variety is carried out to test the effects of the statutory changes.FindingsThe most important lesson from this paper is the significance of the voluntary approach to improve the variety of environmental disclosure. The present paper supports the claim of voluntarism that companies will meet the heterogeneous requirements of their stakeholders without any governmental regulations. No statutory regulations are needed to make the companies increase and adapt their environmental disclosure to the demand from their stakeholders and legitimate their existence towards society. The present paper has revealed that the regulation approach has a significant, immediate effect on mandatory environmental disclosure only, and that companies do not fully comply with such statutory regulations.Research limitations/implicationsThere is no universal notion of voluntarism. Different countries and societies have different legal requirements and political cultures regarding voluntarism. That is, voluntary reporting in Norway is affected by the national statutory requirements and may be underpinned by a certain set of societal responsibilities that may or may not exist elsewhere. Further research is needed to see whether these findings are readily generalized or whether they should only be interpreted in light of local considerations.Originality/valueThis is the first comprehensive study of the development of environmental disclosure in Norwegian companies. A total of 822 financial statements and annual reports, during the period between 1987 and 2005, are analysed.

The evolution and determinants of corporate social responsibility (CSR) disclosure in a developing country: extent and quality

“…While this implies that CSR reporting is mandatory for PIEs (including all listed companies), there has not been any prescribed model of reporting, leaving firms with the flexibility to determine “what” and “how” to report. Similar and arguably “softer” forms of regulation are prevalent in several countries, such as Norway (Fallan and Fallan, 2009) and Malaysia (Haji, 2013), and prior studies highlight that international CSR reporting models have not been prevalent in Mauritius (Soobaroyen and Mahadeo, 2016). At the same time, these “softer” forms of regulation reflect a change of values, norms and opinions about a given issue or agenda.…”

CSR Disclosure: Effects of Political Ties, Executive Turnover and Shareholder Equity. Evidence from China

“…These items were assigned with scores ranging from 0 to 3 points. The score will be 0 if there is no information existing, 1 if only non-quantitative aggregate information is available, 2 if quantitative information is provided, and 3 if fiscal information is available [86,87]. The quality of CSR disclosure is defined with an iterating value of (i) for each firm and (t) for the year concerned whereby each sampled firm is assigned a score of quality of CSR disclosure in the 20,578 firm-year observations as shown in Equation (1).…”

Determinants of CSR disclosure in Mexico

“…A number of studies also suggest that (e.g., Baylis et al, 1998;Gray et al, 1995) and provide supporting evidence for (e.g., Patten, 2000;Weber, 2014) regulation compliance as motivating factor for CSR reporting. Regulatory initiatives, however, seem to have had a varying degree of success, with a number of studies also reporting poor compliance and limited impact on disclosure (e.g., Day and Woodward, 2004;Fallan and Fallan, 2009;Larrinaga et al, 2002;Luque-Vílchez and Larrinaga, 2016). In contrast, Bebbington et al (2012) report higher compliance with introduced informal CSR requirements in their UK sample, suggesting it could be easier for the latter to become accepted and standardised.…”