Analysis of the determinants of disclosure of environmental impacts of Brazilian companies

Dr  Fabricia Silva da Rosa1, Dr Rogério João  Lunkes²,  Dr Nelson Hein³, Mara Vogt⁴, Larissa Degenhart⁵

¹FURB – Brasil

²UFSC – Brasil

³FURB – Brasil

⁴FURB  - Brasil

⁵FURB – Brasil

Corresponding author Email: fabriciasrosa@hotmail.com

Accepted 21 May 2014

Abstract

This article aims to identify the factors that influence Brazilian companies’ environmental disclosures. To achieve this goal, the annual and sustainability reports of 98 companies that comprise the IBRX100 index of BM&FBOVESPA (São Paulo Stock Exchange) were analyzed for the period between 2010 and 2012. First, each company’s level of disclosure of information about waste, emissions, effluents and other impacts was identified based on their annual and sustainability reports. A model to measure the level of disclosure was then built based on a literature review and the guidelines of the Global Reporting Initiative (GRI). Second, the factors that explain the contents of the companies’ reports were identified using canonical correlation. Data analysis revealed that the companies fit the following profile: (i) The sustainability report is seldom used the exclusive channel of environmental disclosure; (ii) There is a correlation between information disclosed in annual reports and information disclosed in sustainability reports, which demonstrates that consistent information is provided, but there is a difference in a scope of the information provided in that sustainability reports provide more detailed information; (iii) The level of environmental information disclosed could be improved if companies would disclose more information about waste disposal, impact reduction targets, managing the impact of transportation and effluent treatment; and (iv) Aspects related to environmental performance (Potentially Polluting Enterprises (PPE) and GRI), legitimacy (AUDIT) and economic performance (ACCION, ASSEST and Return on Assets (ROA)) may influence or be positively related to the level of environmental disclosure, but the same is not true of ESI (Environmental Sustainability Index), CG (Corporate Governance) and ROE (Return on Equity) indicators.

Keywords: Environmental disclosure, Impact management, Brazil.