Corporate Environmental Disclosure Strategies: Determinants, Costs and Benefits

Abstract

In response to investors? and other stakeholders? concerns about corporate environmental policies, many firms are voluntarily increasing their level of environmental disclosure since there is a scarcity of alternative information sources. Using a cost-benefit framework, this study intends to identify determinants of corporate environmental reporting by Canadian firms subject to water pollution compliance regulations during the 1986-1993 period. Results suggest that information costs and a firm?s financial condition are key determinants of environmental disclosure. Firm size, the regulatory regime governing corporate disclosure, and industry, also contribute to explaining environmental disclosure.

JEL Classification: M41, M45, Q28