Journal of Environmental Management 145 (2014) 357e367

Contents lists available at ScienceDirect

Journal of Environmental Management

journal homepage: www.elsevier.com/locate/jenvman

The relationship between corporate environmental performance

and environmental disclosure: An empirical study in China
X.H. Meng a, d, S.X. Zeng a, *, Jonathan J. Shi b, G.Y. Qi c, Z.B. Zhang d
a

Antai School of Management, Shanghai Jiaotong University, 535 Fahuazhen Road, Shanghai 200052, China
College of Design, Construction and Planning, University of Florida, Gainesville, FL 32611e5703, United States
c
School of Business, East China University of Science and Technology, Shanghai 200237, China
d
School of Politics and Public Administration, Soochow University, Suzhou 215123, China
b

a r t i c l e i n f o

a b s t r a c t

Article history:
Received 14 October 2013
Received in revised form
5 February 2014
Accepted 7 July 2014
Available online 9 August 2014

Based on a content analysis of 533 Chinese listed companies, this study examines how corporate environmental performance affects not only the level of detail of a company's environmental disclosures, but
also what information is disclosed. The results show that (1) both poor and good performers have more
disclosure than the median (i.e., mixed) performers, which provides empirical evidence to support a
nonlinear relationship between corporate environmental performance and environmental disclosure; (2)
poor performers disclose more soft information on environmental performance than good performers,
and good performers disclose more solid information; and (3) although poor performers increase
disclosure after being exposed as environmental violators, they avoid disclosing negative environmental
information, such as the violation and the associated penalties. This study provides additional evidence
for a nonlinear relationship between environmental performance and disclosure in emerging markets,
and suggests environmental disclosure may not be a valid signal to differentiate good performers from
poor performers in contemporary China.
2014 Elsevier Ltd. All rights reserved.

Keywords:
Environmental disclosure
Environmental performance
Listed companies
China

1. Introduction
As the general public worldwide becomes more concerned
about the environment, there is increasing demand for rms to
disclose more information relevant to their performance in this
area to demonstrate the extent to which they are fullling their
environmental responsibilities (Cho et al., 2010; Criado-Jimenez
et al., 2008; Delmas and Toffel, 2008; Evans et al., 2009). One of
the most important issues affecting a rm's environmental information disclosure (EID) is the relationship between this disclosure
and the rm's potential environmental performance (Clarkson
et al., 2008). The topic has drawn broad interest from both practitioners and academics (Dawkins and Fraas, 2011a; Hughes et al.,
2001; Patten, 2002). Studies of the corporate environmental
performance-EID relationship show mixed results (Al-Tuwaijri
et al., 2004; Clarkson et al., 2011; Freedman and Wasley, 1990;
Ingram and Frazier, 1980; Wang et al., 2004; Wiseman, 1982).
During the last two decades, environmental degradation
resulting from rapid economic growth has become an increasing
concern in China (Li et al., 2008; Zeng et al., 2010, 2012; Zhu et al.,
* Corresponding author. Tel.: 86 21 52302563; fax: 86 21 62932577.
E-mail address: zengsaixing@sjtu.edu.cn (S.X. Zeng).
http://dx.doi.org/10.1016/j.jenvman.2014.07.009
0301-4797/ 2014 Elsevier Ltd. All rights reserved.

2013). The issue has attracted international attention in the wake of

high-prole incidents such as the blue-green algae at Tai Lake in
Wuxi, the arsenic pollution in Hunan in 2007, and acidic waste
water containing copper discharged by the listed company Zijin
Mining in Fujian in 2010 (Xu et al., 2012), which have pushed the
issue of Chinese corporate environmental disclosure to the fore. In
recent years, the Chinese government has published several regulations to compel rms to implement EID.1 More and more listed
rms have begun to disclose environmental information in their
annual reports, some even producing a separate publication
covering their practices in this area (Liu et al., 2010; Park et al.,
2010). With respect to Chinese rms' EID behaviors, some authors have examined the effects of organizational characteristics
(e.g., industrial sector, size, and ownership) and external stakeholders (e.g., government, shareholders, creditors, and community
groups) on corporate EID (Dong et al., 2011; Li et al., 2008; Liu and
Anbumozhi, 2009; Xu et al., 2012; Zeng et al., 2010, 2012). However,
1
Including the Bulletin on Disclosure of Environmental Performance by SEPA in
2003, Environmental disclosure rules by SEPA in 2007, Instruction of strengthening
supervision on environmental protection of listed companies by SEPA in 2008, and
Guide to environmental information disclosure for listed companies by Shanghai
Stock Exchange in 2008.

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X.H. Meng et al. / Journal of Environmental Management 145 (2014) 357e367

an important question arises: what is the relationship between a

corporate entity's potential environmental performance and EID in
China? We conduct three consecutive empirical analyses that
address this question: (1) to examine the relationship between the
level of EID and corporate environmental performance; (2) to
compare the disclosure contents between groups of rms with
different levels of environmental performance; and (3) to examine
the change of disclosure behavior of the environmental violators
after their violations were exposed.
This paper aims to provide some useful insights into environmental disclosure among Chinese rms, and to help develop a
theory to explain companies' disclosure behaviors in emerging
markets. We evaluate the environmental disclosures of 533 Chinese
listed companies (48 poor, 80 good, and 405 mixed performers)
across nine industries in 2009 and 2010 in order to examine how a
rm's environmental performance affects not only the level of
detail (that is, the amount) of its EID, but also the content of what is
disclosed. Our ndings show that both good environmental performers (based on Ministry of Environment of China designation or
the meeting of various performance criteria) and poor environmental performers (rms with environmental violation events)
have higher levels of environmental disclosure (measured using a
content analysis scheme) than companies whose performance is
classied as mixed. The results also reveal the different disclosure
contents (e.g., more soft information by poor performers and more
solid information by good performers) at the two ends of environmental performance, and show that poor performers tended
not to disclose negative information (although both types
demonstrated signicantly higher EID in 2010 than in 2009), even
after exposure by the environmental authorities and the media.
This article contributes to the literature in several ways. Firstly, it
reveals a nonlinear (rather than negative or positive) relationship
between environmental performance and EID in an emerging
economy, which is different from most previous ndings in
developed countries. Secondly, moving the focus of enquiry beyond
the simple level of disclosure, this study documents that the
nonlinear relationship is actually caused by different disclosure
contents or patterns at the two ends of environmental performance, which suggests that the traditionally competing linear
theoretical explanations (namely the legitimacy and voluntary
disclosure theories) need not be mutually exclusive, but can in fact
be integrated to explain the disclosure behaviors of Chinese listed
companies. Thirdly, the study uses a difference-in-differences
estimation approach and discovers that while the level of EID for
poor performers increased, little relevant negative/sensitive information was disclosed by companies, even after their environmental
violations had been exposed. This nding presents researchers and
external stakeholders with a challenge as to how to differentiate
good performers from poor, since poor performers can easily
imitate the disclosure behavior of good ones.
The remainder of this article is organized as follows. The next
section summarizes the literature, while section three presents the
hypotheses. Section four describes the methodology and data
collection, and the ndings are presented in section ve, followed
by a summary and discussion.
2. Previous work
A large number of studies have already examined the relationship between environmental performance and EID using various
sample sizes and methodologies. However, previous research on
the environmental performance-EID relationship has yielded
mixed results.
By comparing the content analysis ratings of EID in annual reports with environmental performance ratings obtained from the

Council on Economic Priorities (CEP), Ingram and Frazier (1980)

showed that there was no association between environmental performance and EID. After studying the 26 largest CEP-rated companies in the US, based on an EID index comprising 18 items across
four categories, Wiseman (1982) obtained the same results.
Freedman and Wasley (1990) examined 49 CEP-rated companies and
found that neither the annual report nor the 10-K environmental
report was indicative of a rm's actual environmental performance.
Patten (2002) argued that these studies failed to document any
signicant relationship because of methodological shortcomings
such as small sample sizes, inadequate environmental performance
measures, and failure to control for rm size and industry sector. By
normalizing the Toxic Release Index (TRI) by sales as a proxy for
environmental performance for a sample of 131 US rms across 24
different industries, Patten (2002) generated a modied Wiseman
index and demonstrated a negative relationship between environmental performance and EID. Hughes et al. (2001) examined differences in the environmental disclosures of 51 US manufacturing rms
classied as good, mixed, or poor environmental performers by CEP.
They reported a higher level of disclosure for poor performers.
By contrast, however, some researchers have found a positive
association between environmental performance and disclosure.
Al-Tuwaijri et al. (2004) conducted a content analysis of environmental disclosure in four categories: potential responsible parties'
designation, toxic waste (such as oil and chemical spills), environmental nes and penalties, and environmental performance based
on TRI estimates of total recycled waste. They concluded that
environmental performance is positively associated with EID.
Clarkson et al. (2008) developed a content analysis index based on
the GRI sustainability guidelines (2002) with a proxy for environmental performance using two TRI measures (TRI/sales and percentage of waste recycled). They showed that good performers
disclosed more environmental information, based on a sample of
191 US rms in ve high-polluting industries (pulp and paper,
chemicals, oil and gas, metals and mining, and utilities). Furthermore, using a similar measure of environmental performance,
Clarkson et al. (2011) identied a positive relationship with environmental disclosure in 51 Australian rms.
Dawkins and Fraas (2011a) studied a sample of the Standard &
Poor (S&P) 500 rms included in Ceres' Carbon Disclosure Project
of 2007. They evaluated environmental performance using the
2005 Kinder, Lydenberg, and Domini (KLD) ratings. EID was classied on three levels: (a) none, (b) partial, and (c) full disclosure.
Using an ordinal regression, they reported a curvilinear environmental performance-EID relationship, which indicated that both
superior performers and inferior performers disclosed more environmental information.
While these studies have shed some light on the environmental
performance-EID relationship from North American, Australian,
and European perspectives, there is, to our knowledge, a paucity of
studies examining the linkage between environmental performance and EID in emerging markets, especially investigating what
content is disclosed and the difference therein between poor and
good performers, as well as the response of poor performers after
being exposed as environmental violators. This article is one of the
few empirical studies in emerging markets using a large research
sample, which provides the evidence needed to help developing
countries, such as China, the largest developing economy in the
world, draft relevant EID regulations.
3. Theories and hypothesis development
As stated by the legitimacy theory, social disclosure is a reaction
to the pressure exerted by institutional and public stakeholders
(Magness, 2006). Firms whose environmental performance is poor

X.H. Meng et al. / Journal of Environmental Management 145 (2014) 357e367

face greater political and social pressures, which threaten their

legitimacy. Hence, they are expected to provide more extensive
offsetting or positive EIDs in their annual reports to external
stakeholders (Cho and Patten, 2007). EID can be used as a tool to
meet the increasing demand of stakeholders to legitimize the existence of the business despite environmental concerns (Fallan and
Fallan, 2009; Patten, 2002).
Legitimacy theory is based on perception. Any response from
management must be accompanied by disclosure in order to
change external views of the organization (Magness, 2006). If a rm
suspects that its legitimacy is, or might be, threatened, it has an
incentive to increase its EID in order to (1) educate and inform
relevant public stakeholders about (actual) changes in performance; (2) change perceptions of the organization; (3) deect
attention from the issue of concern by highlighting other accomplishments; and (4) seek to change public expectations regarding
its performance (Lindblom, 1994; Patten, 2002).
The voluntary disclosure theory, on the other hand, suggests
that a rm with superior environmental performance will be
strongly motivated to keep investors and other stakeholders
informed by voluntarily disclosing more environmental information and hence differentiating itself from poor environmental performers (Clarkson et al., 2008). For such rms, conveying good
performance can help improve their public image and reputation
(Guthrie and Parker, 1990), build brand competitive advantage
(Waddock and Graves, 1997), and win governmental support
related to environmental protection (Liu and Anbumozhi, 2009;
Zeng et al., 2010 Zhang et al., 2011). This last point is especially
salient in China, where the government offers incentives such as
environmental awards, renancing convenience, tradable permits,
and a green credit policy. Such disclosure efforts may therefore be
expected to lead to the rm outperforming its peers in terms of
prot (Russo and Fouts, 1997).
Legitimacy theory predicts a negative association between
environmental performance and disclosure, while the voluntary
disclosure theory predicts that this relationship will be positive.
Most studies have regarded these theories as offering competing
perspectives. However, between the extremes of good and poor
performers, there are many mixed or average performers. These
rms tend to meet basic performance disclosure expectations, since
disclosure presents a low threat to their environmental legitimacy,
while they have little to gain by highlighting their environmental
performance. Therefore, it would not be surprising to see a phenomenon whereby poor performers disclose more than average
performers (consistent with legitimacy theory), and good performers disclose more than average performers (consistent with
the voluntary disclosure theory). Hence, we propose the following
hypothesis:
H1. Both good performers and poor performers have higher levels
of EID than mixed performers.
Both the legitimacy and voluntary disclosure theories predict an
association between environmental performance and EID, but the
reasons for such disclosure are different. This may result in a difference in the content of the information released by rms. If good
performers can successfully convey their high performance by
disclosure, as predicted by the voluntary disclosure theory, they are
likely to provide credible information by adopting a form of
objective and veriable EID (Clarkson et al., 2008). Conversely, a
poor performer's legitimacy may be threatened by EID and hence
its goal, based on legitimacy theory, may be to make a self-serving
disclosure; if so, it may disclose more information, with the
intention of changing public perception of its environmental performance, but the claims it makes will be less readily veriable
(Clarkson et al., 2008, 2011). Therefore, the two theories imply

359

differences in the content of EID. This leads to the following

hypothesis:
H2. Good and poor performers will exhibit different patterns of
environmental disclosure.
In this study, rms who have been involved in environmental
violations are classied as poor performers. We also investigate
whether such rms increase their EID after their violations have
been exposed by the environmental authorities and media, and
whether they disclose full and true information (such as the penalty, consequences and treatment of environmental events, and
levels of excess pollutants) in their annual reports. Poor performers
are expected to be subject to greater exposure to potential public
and regulatory scrutiny. Studies show that rms with greater
environmental exposure, and thus greater public visibility, may
make higher disclosure (Al-Tuwaijri et al., 2004; Bewley and Li,
2000; Dawkins and Fraas, 2011a, b). Environmental violation affects the level of external pressure and adds the risk of a rm being
adversely affected by stakeholders. It is therefore assumed that
poor performers will disclose more environmental information to
meet the higher expectations of their stakeholders. If a rm needs
to relieve external pressures stemming from an environmental
incident, it is likely to be more willing to discuss that incident
(Bewley and Li, 2000). Hence, after an environmental violation, a
rm may be expected to increase its EID, including details of its
actual environmental performance, negative/sensitive environmental information, and corresponding positive organizational
actions. Therefore, we present further hypotheses:
H3a. A poor performer will disclose signicantly more relevant
negative/sensitive environmental information after a violation has
been exposed.
H3b. A poor performer will increase its environmental disclosure
more than others after a violation has been exposed.
4. Methodology
4.1. Data collection and sampling
Studies seeking to assess environmental performance are constrained by data availability (Clarkson et al., 2011). Many studies
have typically relied on the TRI database, which focuses on negative
outcome measures (see for example Al-Tuwaijri et al., 2004;
Clarkson et al., 2008; Patten, 2002), the CEP environmental performance ranking (see for example Freedman and Wasley, 1990;
Hughes et al., 2001; Ingram and Frazier, 1980; Wiseman, 1982), or
the KLD social performance rating (see for example Cho et al., 2006;
Cho and Patten, 2007; Dawkins and Fraas, 2011a). TRI, CEP, and KLD
contain data only on US rms, which is why very little work has
been done on the relation between environmental performance
and environmental disclosure in other countries. Therefore, a key
research design issue in this study is to measure environmental
performance in the Chinese setting.
Due to the lack of data from China, we address this challenge
with a methodology similar to CEP to rank the environmental
performance of the selected companies in three categories2: poor,

2
Environmental performance is dened as: (a) Poor: the company has a poor
public record or signicant violations, major accidents, and/or a history of lobbying
against sound environmental policies; (b) Mixed: a mixed record: some positive
programs such as use and encouragement of recycling, alternative energy sources,
waste reduction, etc. Problems such as accidents, regulatory infractions, nes,
complaints, etc.; and (c) Good: positive programs, such as use and encouragement
of recycling, alternative energy sources, waste reduction, etc. A record relatively
clear of major regulatory violations (CEP, 1991, p.72; Hughes et al., 2001).

360

X.H. Meng et al. / Journal of Environmental Management 145 (2014) 357e367

mixed, and good. We will not only compare the disclosure practices
of poor and good performers but also examine the possibility of a
nonlinear relationship between environmental performance and
EID.
In this study, rms were selected from those listed on the Chinese stock exchange. Poor performers were identied from details
of environmental violation events (EVEs). The Ministry of the
Environment of China (MEC) publishes a monthly list of companies
that have failed to comply with national environmental laws and
regulations. This list contained a total of 45 listed companies for the
period April to November 2010 (Xu et al., 2012). Another three
listed companies that had substantial penalties imposed were
identied on major websites in 2010 in China.3 Of the 48 sampled
rms, 11 had potential environmental risks4 and 37 had caused
serious water or gas pollution. The companies with poor environmental performance fall into nine industry categories (see
Table 1).5
Studies on environmental disclosure show that industry type is
an important variable in multiple-industry analyses (see for
example Bewley and Li, 2000; Clarkson et al., 2008, 2011; Cormier
and Gordon, 2001; Dawkins and Fraas, 2011a; Patten, 2002; Li and
Zhang, 2010; Zeng et al., 2010, 2012). In order to establish peer
groups for poor performers in corresponding industries, other listed rms were selected and matched with the nine sectors included
here. All rms were pre-screened according to the following two
criteria: (1) deleting listed companies subject to Special Treatment
(ST) and Particular Transfer (PT) due to continuous losses over the
past two years, to avoid selecting a company with abnormal
nancial status; (2) including only listed companies which had
gone public before December 31, 2007, to avoid the windowdressing effect at the early stages of going public. A total of 485
companies passed the pre-screening process in addition to the 48
poor performers and were further categorized into good and mixed
performers.
The good performers were identied based on a set of criteria:
(1) the rst group of good performers were those rms that had
been authenticated as environmentally friendly enterprise6 by the
MEC and then had no record of environmental violation; and (2)
the second group of good performers were those that met all of the
ve indexes or criteria:
(1) Not listed as severe polluting enterprises by the MEC;
(2) Not publicly exposed by the media as having had environmental accidents, regulatory infractions, nes, or
complaints;
(3) Not having documented levels of pollutant emissions beyond
the limits of existing laws and regulations;

3
The ve main websites in China include sohu.com, sina.com, 163.com, qq.com,
and xinhuanet.com.
4
Potential environmental risks refer to: (a) a rm that has no effective environmental protection measures for when pollutant emission has reached the
maximum allowable level under the law; (b) a rm has no feasible plan to improve
seriously degraded facilities although its pollutant emission currently conforms to
the regulations (Xu et al., 2012).
5
Using the industry classication codes issued by the China Securities Regulation
Commission in 2001.
6
The honor of National Environmentally Friendly Enterprise, assessed by the
MEC, is granted to those rms that carry out cleaner production, utilize resources
reasonably, and adopt advanced environmental techniques, thereby achieving low
resource consumption and environmental pollution. They are typically rms
complying with environmental laws and achieving a winewin of both environmental and economic performance. From 2004 to 2010, 93 rms have been granted
this honor, 64 of which are listed and 38 fall into the nine industries included in our
study.

Table 1
Sampled rms by industries.
Industry

Poor

Mixed

Good

Food and drink

Textiles, clothing, and fur
Paper making and printing
Petroleum, chemicals, and plastics
Metal, non-metal smelting
Medicine, biological products
Agriculture
Extractive industry (coal, non-ferrous metal,
oil, and gas)
Power, coal, gas, water production and supply
Subtotal

4
1
2
13
9
4
3
9

44
48
14
110
86
79
8
7

8
8
7
21
18
5
0
8

3
48

9
405

5
80

(4) Having introduced ISO 14000 or another environmental

management system;
(5) Having won at least two environmental honors7 at the provincial or national level.8
In China, a small number of environmentally friendly enterprises were granted honors each year, particularly involving listed
companies, so the ve indexes of the latter group represent the
main reference standards for evaluating China's environmentally
friendliness. Of the ve indexes, the rst two say that rms had no
major environmental risk or regulatory violations, the third index
indicates that rms meet environmental emission requirements,
the fourth index reects that rms had routine environmental
management systems in place, and the fth index of environmental
honor shows that rms have better environmental performance.
Thus, the ve indexes or criteria also accord with the denition of
the CEP category of good performers.
As a result, 80 of the rms studied here fell into the category of
good performers. The remaining 405 companies could be classied
as mixed performers. The 533 companies selected in this study
represent 35% of all rms listed on the Chinese stock market.
Table 1 shows the sampled rms categorized in industry groups.
Environmental information for each company was then
abstracted from the following sources, which are the main and
most reliable channels of environmental information relating to
listed companies open to the public in China: (1) annual reports, (2)
independent CSR or environmental reports, and (3) bulletins
related to the environment. The reports and bulletins can be obtained from the website of the Shanghai and Shenzhen stock exchanges, and another website nominated by the China Securities
Regulatory Commission,9 which provides a link for all Chinese listed companies and presents the full operation information that

7
Some examples of environmental honors awarded at the provincial or national
level are: Outstanding Unit of Emission Reduction and Energy Saving; Honor of
China Environmental Awareness Unit; One of Ten Leaders of Pollution Reduction,
Henan Province; Industrial Circular Economy Demonstration Enterprise, Zhejiang
Province; Environmentally Friendly Enterprise in the Chemical Fiber Industry;
Honor of Green Project in Shanghai; Advanced Enterprise of Emission Reduction
in the Coal Industry; China Green Company Hundred; and First China Green Gold
Award, and so on.
8
Criterion 1 can be veried by the list of severe polluting enterprises released by
the MEC (http://www.mep.gov.cn); Criterion 2 was screened using the ve main
websites in China (that is, sohu.com, sina.com, 163.com, qq.com, and xinhuanet.
com); Criterion 3 was treated as met when a denite statement of having reaching the environmental standards was included in the annual report; Criterion 4 was
veried according to the Certication and Accreditation Administration of China
(www.cnca.gov.cn); and Criterion 5 was checked against the environmental section
in each rm's website.
9
See http://www.cninfo.com.cn/information/lclist.html.

X.H. Meng et al. / Journal of Environmental Management 145 (2014) 357e367

should be disclosed for each company. Firms' nancial data and

other relevant information were drawn from the CSMAR
database.10

4.2. Dependent variable

Corporate EID can be gauged by the content and degree of detail
given in environmental disclosure (Beck et al., 2010; Bewley and Li,
2000; Cho and Patten, 2007; Hughes et al., 2001; Patten, 2002;
Wiseman, 1982; Zeng et al., 2010). Some researchers have
measured the content of EID based on a content analysis index (see
for example Bewley and Li, 2000; Hughes et al., 2001; Patten, 2002;
Wiseman, 1982). Others proposed environmental reporting
frameworks using the GRI Sustainability Reporting Guidelines (see
for example Clarkson et al., 2008, 2011; Liu and Anbumozhi, 2009).
In order to use a disclosure-scoring methodology derived from
content analysis, as has been extensively deployed to appraise
levels of disclosure (Al-Tuwaijri et al., 2004), it is necessary to
dene clearly what environment-related information comprises.
Obviously, environmental disclosure regulations vary across
countries (Darnall et al., 2010; Fallan and Fallan, 2009; Gray et al.,
2001). In China, the rst regulation Environmental Disclosure Rules
were issued by the China State Environmental Protection Administration (SEPA) in 2007.11 They require enterprises to disclose
whether or not they have caused pollution and, if so, to report the
remedial measures implemented. Drawing on the SEPA rules, in
2008 the Shanghai Stock Exchange also issued CSR guidelines
encouraging listed companies to disclose more information
involving investment and nance related to environmental protection. Liu and Anbumozhi (2009) proposed denitions of six
items of environmental information relevant to Chinese listed
companies by reviewing and comparing the reporting guidelines
suggested by GRI and the SEPA rules. Zeng et al. (2010) developed a
10-item list of environmental disclosure items as identied by
SEPA's 2007 rules and those of the Shanghai Stock Exchange in
2008. The MEC further published a new policy in 2010, Environmental Information Disclosure Guidelines for Listed Companies in
China, which species the outline and detailed contents of annual
environmental reports for all Chinese listed companies. In practice,
more and more listed rms have begun to disclose environmental
information according to the requirements of these national regulations. Based on these measurements and policies, we identied
43 items across eight categories to measure environmental information (see Appendix I).
An indexing technique was employed to quantify the level of
EID, using monetary- and nonmonetary-related environmental
disclosure, as an effective tool to gauge level of disclosure (Bewley
and Li, 2000; Cho and Patten, 2007). Each item was scored according to its level of disclosure, ranging between 0 and 3: 3 if the
item was described in monetary or other quantitative terms; 2 if
described specically; 1 if discussed in general; and 0 if no information was provided (see for example Al-Tuwaijri et al., 2004;
Bewley and Li, 2000; Cho and Patten, 2007; Hughes et al., 2001;
Wiseman, 1982; Zeng et al., 2010). Thus, each rm was scored by
evaluating its total level of EID based on Equation (1):

SEIDi

n
X

Iij

(1)

j1

10
The database of CSMAR (China Stock Market Accounting Research) is administered by the China Accounting and Finance Research Center of Hong Kong Polytechnic University and Shenzhen GTI Financial Information Limited.
11
SEPA was the predecessor of the MEC prior to 2008.

361

where SEIDi is the total score of EID for rm i; and Iij is the score of
the jth item for rm i, in which j 1, 2, , 43. Information disclosed
in 2009 and 2010 for the 533 companies and the average scores of
each item is presented in Appendix I. Note that each of the eight
categories are scored separately and the average scores are calculated for poor, mixed, and good performers when we analyze the
difference of disclosure structure for poor and good performers to
test H2.
4.3. Explanatory variables
The independent variable here was environmental performance, which is divided into three types (that is, poor, mixed, and
good). Mixed performers were set as the base group. Two dummy
variables were dened for poor (good) performers (1 if the rm has
poor (good) environmental performance, 0 otherwise).
In order to prevent the results from being driven by rms' heterogeneity, additional independent variables were also adopted as
control variables to describe rm characteristics (Gray et al., 2001;
Patten, 2002; Zeng et al., 2010, 2012). A rm's size has been shown
to be positively correlated with environmental disclosure (Boesso and
Kumar, 2007; Patten, 2002). Larger rms generally face more public
pressure and have more resources through which to achieve environmental protection. They are therefore more likely to disclose
environmental information. In this study, size was measured by the
natural logarithm of year-end total assets as a proxy variable (Gray
et al., 2001). Industry is also considered an important factor affecting
EID (Bewley and Li, 2000; Cormier and Gordon, 2001), because
pollution propensity and outside monitoring vary from industry to
industry (Dawkins and Fraas, 2011a). To serve the needs of the nine
industry sectors in this study, eight dummy variables were used, with
the food and drink industry as the base group. If a company belonged to
a certain industry, it was assigned a value of 1, and 0 otherwise
(Cormier and Gordon, 2001). Another dummy variable was used to
describe the ownership of a listed company to control for the type of
controlling shareholders (that is, state- or non-state ownership). A
state-owned rm is owned or controlled by central or local government by which it is supported (Liu and Anbumozhi, 2009). Studies
show that state-owned rms engage in more EID to demonstrate
their social responsibility (Zeng et al., 2010, 2012; Zhang et al., 2011).
Ownership was a dummy variable (1 for a state-owned enterprise
and 0 otherwise). Leverage and nancial performance were used to
capture the nancial risk and availability of a company's nancial
resources (Brammer and Pavelin, 2006; Karim et al., 2006). Leverage
was measured as the ratio of a rm's total debt to its total assets, and
nancial performance was measured as return on assets (ROA).
The descriptive statistics of the explanatory variables and SEID,
and the pairwise Pearson correlations between them, are reported
in Table 2.
5. Results and analysis
Table 3 reports the results of a multiple regression analysis
testing the relationship between EID and environmental performance in 2010 (Sample A) and 2009 (Sample B).
Table 3 indicates that the two models are highly signicant, with
F-statistic values of 32.40 and 25.29, respectively. With respect to
the model for 2010, the coefcient values of the variables Poor Performers (14.29) and Good Performers (18.93) are both statistically
signicant at the 0.001 level, suggesting that both poor and good
performers disclosed more environmental information than mixed
performers. Moreover, the F test rejected the hypothesis of the equity of two coefcient values of Poor Performers and Good Performers
at the 0.05 level, which also shows that good performers disclosed
signicantly more environmental information than poor ones.

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X.H. Meng et al. / Journal of Environmental Management 145 (2014) 357e367

Table 2
Descriptive statistics and pairwise correlations of continuous variables.

1.
2.
3.
4.
5.
6.
7.
a

SEID
Poor Performers
Good Performers
Size
Ownership
ROA
Leverage

Mean

SD

Min

Max

15.25
0.09
0.15
21.79
0.61
0.04
0.56

14.06
0.29
0.36
1.49
0.49
0.13
0.41

0
0
0
13.08
0
#0.92
0.00

76
1
1
28.14
1
2.06
5.49

p < 0.05; bp < 0.01; cp < 0.001.

This nding provides evidence to support the nonlinear relationship between environmental performance and EID. The data
thus support Hypothesis 1. Sample B in Table 3 presents the results
for 2009, the year before the MEC started publishing details of poor
performers in the form of its list of rms that have committed
environmental violations.
To test the difference in disclosure content between poor and
good performers (Hypothesis 2), Table 4 summarizes the disclosure
scores across the eight categories and the pairwise differences
across poor, mixed, and good performers in 2009 and 2010.
Table 4 reveals that both poor and good performers disclosed
signicantly more information than the mixed performers in every
category in 2010. Of special interest is the structural difference
between poor and good performers. Sample A in Table 4 shows that
the difference in the sum of the average score of eight categories of
5.98 versus 6.48 is statistically signicant at the 0.05 level. For
category I1, environmental values, policy, and organization, the
average scores for good and poor performers are 1.70 and 2.04,
respectively. This difference of #0.34 is signicant at the 0.05 level,
suggesting that poor performers seek greater soft disclosure to
legitimize their violations of environmental regulations and requirements (Patten, 2002). For categories I2, I4, and I5, the average
scores for good performers are much higher than for poor performers, at 0.26, 0.16, and 0.27, respectively (all differences are
signicant at the 0.05 level). This indicates that, relative to poor
performers, good performers engage in signicantly more EID
Table 3
Regression results for tests of the relationship between SEID and environmental
performance.
Variables

Poor performers
Good performers
Size
Ownership
ROA
Leverage
Industry effects
Constant
F-statistic
Adj. R2
N

Sample A: year 2010

Sample B: year 2009

Coefcient estimate
(Robust std. err.)

Coefcient estimate
(Robust std. err.)

14.29c
(2.18)
18.93c
(1.90)
2.38c
(0.37)
3.19b
(1.06)
2.60
(3.29)
#0.23
(0.71)
Controlled
#42.29c
(7.91)
32.40c
0.47
533

8.14c
(2.23)
13.90c
(1.70)
3.00c
(0.39)
2.66b
(0.95)
0.88
(1.79)
#0.44
(0.65)
Controlled
#54.78c
(8.32)
25.29c
0.42
533

a
p < 0.05; bp < 0.01; cp < 0.001. The dependent variable is the level of SEID. Coefcients are estimated by OLS regression with robust (Eicker-Huber-White) standard errors (presented in parentheses). F test for null hypothesis of the equity of two
coefcient values of Poor Performers and Good Performers in 2010 (F(1, 517) 5.52,
p 0.019)) and 2009 (F(1, 517) 9.10, p 0.003), respectively; the difference
between these two values was statistically signicant at the level of 0.05.

0.25c
0.48c
0.51c
0.24c
0.01
#0.08b

#0.13c
0.27c
0.12c
#0.01
#0.03

0.30c
0.07a
0.02
#0.05

0.30c
#0.02
#0.13c

#0.07a
#0.03

#0.19c

about environmental systems and initiatives, resource consumption and pollutant control, and environmental performance
improvement. For category I3, environmental technology, investment, and expenditure, the difference between good and poor
performers is 0.22, which is signicant at the 0.10 level. However,
there is no signicant difference between the two for category I6,
important environmental issues and impact, and I7, environmental
compliance. Obviously, the structural difference between good and
poor performers is signicant. Sample B of Table 4 provides similar
results for 2009. Hence, the results provide evidence that poor
performers disclose more soft information on environmental performance than good performers, but good performers disclose
more solid information, thus supporting Hypothesis 2.
The overall disclosure structure for poor and good performers
exhibits similar characteristics. As shown in Sample A of Table 4,
these rms disclosed more environmental information in the areas
of I1 (values, policy, and environmental organization), I3 (technology, investment, and expenditure related to environment) and I5
(environmental performance improvement), followed by I2 (environmental management system and initiatives), and disclosed less
in the areas of I6 (important environmental issues and environmental impact) and I7 (compliance with environmental regulations). It is not surprising that the most sensitive information,
category I4 (resource consumption and pollutant control), is disclosed the least, in addition to environmental public welfare activities and others. Sample B in Table 4 shows a similar overall
disclosure structure for 2009. It seems to be difcult for stakeholders to distinguish poor from good performers based only on the
level of disclosure, because on the one hand, while poor performers
provide more soft information than good performers, they also
supply more solid information than the mixed performers, and on
the other hand, both poor and good performers demonstrate
similar overall disclosure patterns despite statistically signicant
differences in several individual areas.
To test Hypothesis 3a, Table 5 reports the disclosure of negative
or sensitive information by poor performers after violations had
been exposed by the MEC.
Table 5 clearly indicates that poor performers disclosed very little
relevant negative or sensitive environmental information, even
after violations had been exposed by the MEC and the media. Of the
48 poor performers, only four rms reported the penalty, two
admitted not having met environmental standards, and ve
mentioned the existence of major risks. Most companies kept silent
about negative information. Some disclosed sensitive information
such as the environmental impact of construction projects (13 rms),
the amount of sewage charges (19), and the substantial quantity of
emissions (8). However, more rms (22) mentioned the inuence of
environmental regulations generally. Hence, even with more disclosure, most of the poor performers cannot be easily identied by investors or other stakeholders if they have not been exposed by the
MEC. There is therefore no strong evidence to support Hypothesis 3a.
Models 1 and 3 in Table 6 report that poor and good performers
signicantly increased their total level of EID from 2009 to 2010,

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X.H. Meng et al. / Journal of Environmental Management 145 (2014) 357e367

Table 4
Structural analysis of differences in scores of eight categories among poor, mixed, and good performers.
Average scores

Sample A: Year 2010

I1. Values, policy, and environmental organization
I2. Environmental management systems and initiatives
I3. Technology, investment, and expenditure
related to the environment
I4. Resource consumption and pollutant control
I5. Environmental performance improvement
I6. Important environmental issues and environmental impact
I7. Compliance with environmental regulations
I8. Environmental public welfare activities and other
Total
Sample B: Year 2009
I1. Values, policy, and environmental organization
I2. Environmental management systems and initiatives
I3. Technology, investment, and expenditure
related to the environment
I4. Resource consumption and pollutant control
I5. Environmental performance improvement
I6. Important environmental issues and environmental impact
I7. Compliance with environmental regulations
I8. Environmental public welfare activities and other
Total

Difference in scores

Poor (n 48)

Mixed (n 405)

Good (n 80)

Poor-mixed

Good-mixed

Good-poor

2.04
0.69
1.43

0.48
0.23
0.78

1.70
0.96
1.65

1.56d
0.46d
0.65d

1.22d
0.72d
0.87d

#0.34b
0.26c
0.22a

0.16
0.92
0.30
0.24
0.19
5.98

0.02
0.30
0.15
0.10
0.03
2.09

0.32
1.20
0.26
0.28
0.12
6.48

0.14c
0.62c
0.14c
0.14c
0.17c
3.88d

0.30d
0.90d
0.11c
0.18d
0.09a
4.38d

0.16b
0.27b
#0.04
0.04
#0.07
0.50b

1.57
0.51
1.26

0.46
0.22
0.73

1.55
0.78
1.53

1.11d
0.29d
0.53b

1.09d
0.56d
0.80d

#0.02
0.26d
0.27b

0.15
0.86
0.09
0.17
0.27
4.88

0.03
0.31
0.05
0.08
0.03
1.92

0.26
1.08
0.10
0.21
0.10
5.61

0.11
0.55c
0.05
0.09
0.24c
2.96d

0.23c
0.77d
0.05b
0.13c
0.07
3.69d

0.12b
0.22b
0.01
0.04
#0.17c
0.73c

a
p < 0.10; bp < 0.05; cp < 0.01; dp < 0.001. Samples A and B contain 533 rms (48 poor, 80 good, and 405 mixed performers) that were assessed in 2009 and 2010, respectively.
The scores of the eight categories are calculated according to a set of index items (see Appendix I). The average disclosure scores in all eight categories are reported and
pairwise differences across poor, mixed, and good performers in the years of 2009 and 2010 are listed in the last three columns. To test the signicance of pairwise differences,
OLS regression with robust (Eicker-Huber-White) standard errors was also used, but the dependent variables were each average scores of eight categories in turn rather than
the total level of SEID in Table 3. The variables (rms size, type of ownership, ROA, leverage, and industry dummies) are also included to control the effects of rms
characteristics. Signicance levels shown in Table 4 are based on t-statistics of regression results.

5.67 and 4.98, respectively, while Model 2 in Table 6 shows that

mixed performers increased the total level of EID less from 2009 to
2010, a value of only 0.81 and statistical insignicance at the 0.05
level. It seems that poor performers increased their environmental
disclosure more than mixed performers (i.e., 5.67e0.81), but not
much more than good performers (i.e., 5.67e4.89). To test whether
poor performers with EVEs would increase the level of EID significantly more than other companies after violations had been
exposed by the MEC (Hypothesis 3b), a regression analysis was
designed including interaction effects for the time dummy variable
and environmental performance, using the data pooled over the
two-year period. The point of interest here is the interaction term,

Table 6
Regression results for tests of the difference of SEID between the year of 2009 and
2010.
Variables

T2010

Model 1

Model 2

Model 3

Model 4

Poor

Mixed

Good

Entire sample

5.67b
(2.82)

0.81
(0.64)

4.98b
(2.24)

0.92
(0.99)
4.08
(4.28)
10.93c
(2.86)
3.57
(10.45)
#13.50
(20.30)
controlled
16.08d
0.40
96

2.80d
(0.28)
2.78d
(0.67)
0.83
(1.76)
#0.004
(0.43)
#51.42d
(6.02)
controlled
19.87d
0.22
810

2.01a
(1.10)
2.52
(3.25)
#19.38
(19.45)
#10.54a
(5.72)
#11.34
(23.71)
controlled
5.49b
0.14
160

0.82
(0.64)
8.93d
(2.14)
14.57d
(1.62)
4.60b
(2.25)
3.74b
(1.81)
2.66d
(0.27)
2.94d
(0.71)
1.43
(1.78)
#0.33
(0.47)
#48.30d
(5.67)
Controlled
48.56d
0.46
1066

Poor Performers
Good Performers
Poor Performers $ T2010
Good Performers $ T2010

Table 5
Disclosure of negative/sensitive information by poor performers after violations had
been exposed by the MEC.
Dimensions
1. Penalty
A statement of the penalty by MEC
No information
2. Listed among severe polluting enterprises
A statement of no inclusion
No information
3. Reached environmental standards
Stated no
Stated yes
No information
4. Disclosed the quantity of emissions
5. Mentioned environmental impacts of construction projects
6. Mentioned the inuence of environmental regulation
7. Complaints and cases of collective environmental petition
8. Stated the amount of sewage charges
9. Mentioned the existence of major risk source
Total

Quantity
of samples

Size
Ownership
ROA
Leverage

4
44
27
21
2
17
29
8
13
22
0
19
5
48

Items 4e9 report the number of rms that disclosed related information; the
remaining rms did not disclose any information.

Constant
Industry effects
F-statistic
Adj. R2
N

a
p < 0.10; bp < 0.05; cp < 0.01; dp < 0.001. The dependent variable is the level of SEID.
T2010 is a dummy variable equal to 1 if the year is 2010, and 0 if the year is 2009.
Signicance levels are based on OLS regression with robust (Eicker-Huber-White)
standard errors (reported below the estimated coefcient). Model 1, 2, and 3 reported poor, mixed, and good performers increased more on their disclosure from
2009 to 2010, respectively. Model 4 reported that poor performers signicantly
increased their disclosure from 2009 to 2010, more than the mixed performers, and
that good performers signicantly increased their disclosure from 2009 to 2010
more than the mixed performers. In Model 4, the F test shows no statistical signicance between the coefcient values of Poor Performers $ T2010 and Good
Performers $ T2010 (F 0.09, p 0.75).

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X.H. Meng et al. / Journal of Environmental Management 145 (2014) 357e367

which is known as the difference-in-differences estimator in

empirical economics (Green, 2003). As Model 4 in Table 6 shows,
both the coefcients for the Poor Performers $ T2010 and good
Performers $ T2010 variables (4.60 and 3.74, respectively) are statistically signicant at the 0.05 level (p 0.041, 0.038, respectively),
indicating that both poor and good performers increased their
disclosure from 2009 to 2010 signicantly more than did the mixed
performers.
However, a further F test of the difference between the coefcient values of the two interaction terms shows no statistical signicance (F 0.09, p 0.75). Table 6 reveals that poor performers
provided signicantly more environmental disclosure after being
exposed by the MEC than did mixed performers. However,
compared with good performers, such exposure did not have a
signicant impact. Thus, Hypothesis 3b is partially supported.
6. Discussion and conclusion
This study has examined three questions about the relationship
between a rm's environmental performance and EID, including (1)
how EID relates to underlying environmental performance; (2)
whether there is a difference in the nature of environmental
disclosure between poor and good performers; and (3) whether or
not poor performers increase their EID and release relevant negative or sensitive environmental information after their violations
have been exposed by the authorities. Using discrete environmental performance variables (good/mixed/poor performers), a
disclosure scheme in the Chinese context, as well as more than one
year of data, we obtained some ndings.
First, we provided empirical evidence to reveal a nonlinear
relationship between environmental performance and EID. By
introducing a large number of mixed performers, our results show
that both poor and good performers disclosed signicantly more
environmental information than mixed performers, which provides additional evidence to support Dawkins and Fraas's nding
(2011a) of a curvilinear environmental performanceedisclosure
relationship. However, we also documented that good performers
disclosed signicantly more environmental information than poor
performers, and showed structural differences in disclosure components at the two ends of environmental performance.
Second, though it is difcult to distinguish poor from good
performers, there is a statistically signicant difference in what
they are releasing: that is, poor performers disclose more soft information on environmental performance than good performers,
while good performers disclose more solid information. Our ndings also revealed that good performers communicate with stakeholders by using more objective and veriable disclosure as
predicted by the voluntary disclosure theory (Dye, 2001;
Verrecchia, 1983), but they also legitimize their operations with
soft claims; poor performers communicate with stakeholders using
more soft and unveriable disclosures, as the legitimacy theory
predicts (Patten, 2002), but they still use objective disclosure to
communicate their environmental efforts.
Our ndings indicate that the two competing linear explanations
(that is, voluntary disclosure theory and legitimacy theory) need
not be mutually exclusive, but can instead be integrated to explain
Chinese rms' EID behaviors. Considering that the Chinese government is currently exploring ways to encourage rms to undertake
environmental disclosure in a way that complements the
existing regulatory system (Zeng et al., 2012; Zhu et al., 2013) in
order to incentivize proactive implementation of environmental
management, we would have expected good performers to disclose
more information including soft claims in order to qualify for those
tangible benets (e.g., environmental awards, convenience of renancing and investment examination options, tradable permits, and

support for a green credit policy). However, the mixed performers

disclosed signicantly less environmental information in almost
every category than both poor and good performers. This suggests
that a large number of mixed performers merely meet basic expectations and adopt a baseline strategy, not seeking opportunities to
highlight their environmental performance in a proactive manner,
but also not reacting to the threat to their legitimacy.
Third, we found that poor performers increased their environmental disclosure after their violations were exposed by the MEC
but released very little actual negative/sensitive environmental
information, which suggests that companies do not report their
environmental news objectively (Deegan and Rankin, 1996). This
may be attributable to the fact that the increasing pressure from the
Chinese government has had a certain effect on environmental
disclosure (Liu and Anbumozhi, 2009), but the weak legal system
and low penalties may still give rms some leeway to be selective.
The public and investors still do not have enough inuence on poor
performers in China, as also concluded by Xu et al. (2012), who
demonstrated that at present negative environmental violation
events have a certain impact on stock markets. Considering this
nding together with ours, it seems that the reliability of environmental disclosure remains a concern for the Chinese market. A
poor performer may mislead investors by increasing its disclosure
in order to appear to be a good performer, although very little
factual information is actually given. Thus, though there is a statistically signicant difference in disclosure patterns, it still seems
quite difcult for investors or other stakeholders to identify good or
poor performers by considering only the level and content of their
environmental disclosure.
These results have important implications for academics, managers, and regulators. From an academic perspective, focusing on
what is disclosed, we provide evidence from the existing literature
trying to reconcile the legitimacy and voluntary disclosure theories
in the Chinese context. An integration of these theories provides a
comprehensive view of environmental disclosure, showing that
more than one theory can be used in future research to explain
managerial behaviors in emerging markets.
Our study also provides useful information for corporate practice. Proactive environmental disclosure can be used as a strategy,
for good performers in particular, to provide more objective and
veriable disclosure to communicate actual operating capacity and
good performance. Such efforts help improve the corporate public
image and bring about a green competitive advantage (Brammer
and Pavelin, 2006). For poor performers, the discrediting effects
of EVEs and negative publicity threaten environmental legitimacy
and further harm corporate protability and survival (Xu et al.,
2012; Meng et al., 2013) if rms passively respond to environmental management, gloss over information, or use strategic ways
to lter it selectively. Since it is difcult for external stakeholders to
measure the accuracy of EID and to distinguish good and poor
performers, it is certainly possible to publish reports that dress up
companies (Pava and Krausz, 1996). Also, given the fact that a large
number of mixed performers disclosed little environmental information of any kind, it is necessary to encourage top executives to
shoulder corporate responsibility, especially for poor and mixed
performers, in accordance with social and ethical judgments about
appropriateness, acceptance, and desirability (Patten, 2002). Initiatives such as the China Entrepreneur Club's promotion of environmental friendliness may change top executives' views of
environmental issues and therefore bring about a shift in corporate
behavior (Zeng et al., 2012). Berrone and Gomez-Mejia (2009),
Mahoney and Thorn (2006), and McGuire et al. (2003) also suggest
that executive compensation (such as salary, bonuses, and stock
options) can be an effective tool to encourage rms to be more
socially responsible.

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X.H. Meng et al. / Journal of Environmental Management 145 (2014) 357e367

Our ndings also have certain policy implications. Firstly, in

China, given the large gaps in information and the split of regulatory
functions, it is necessary to share information about rms' environmental activities between the MEC and the China Securities Regulatory Commission (CSRC). Particularly for severe environmental
events, it is important for investors and other stakeholders in the
stock market to have easy access to information that will help them
to identify a company's environmental performance. Secondly, in
order to avoid selective disclosure or the concealing of key environmental facts, mandatory reporting requirements should be
dened for disclosure items. Thirdly, the CSRC should improve
enforcement, increase the cost penalties for disclosure violation, and,
if possible, establish environmental audit systems. The goal must be
to raise the visibility of corporate environmental performance and
thereby incentivize rms to be environmentally friendly.

This study has only provided a snapshot of the environmental

performance-EID relationship in the early stages of the development of environmental disclosure in China. A longitudinal study to
assess the validity of the relationship we have identied would be
of signicant future benet.

Acknowledgments
We would like to thank the Associate Editor and two anonymous referees for very helpful suggestions that substantially
improved this article. This research is supported by the National
Natural Science Foundation of China (Grant No. 71025006,
71373161, 71390525) and funded by the Ministry of Education of
Humanities and Social Science Project (Grant No. 14YJC630100).

Appendix I. EID scoring index for content analysis.

Item

(I1)
1.
2.
3.
(I2)
1.
2.
3.
4.
5.
6.
7.
8.
9.
(I3)
1.
2.
3.
4.
5.
6.
(I4)
1.
2.
3.
4.
(I5)
1.
2.
3.
4.
(I6)
1.
2.
3.
4.
5.

Values, policy, and environmental organization

Top executive's statement on values and principles related to environmental protection
Firm's environmental protection policy, annual goals, and plan
Department or ofce for pollution control, and its personnel, responsibilities and operations
Environmental management system and initiatives
Information related to ISO 14000 environmental system and/or product eco-labeling
certication
Situation of voluntary cleaner production
Employee training in environmental management and operations
Greening plant and improving employees' operating environment
Communication with stakeholders (such as suppliers, consumers, and communities) on
environmental information
Implementation of environmental management accounting
Voluntary agreement with environmental authority for improvement of environmental
practices
External environmental honors or rewards
Independent verication/assurance of environmental information disclosed in the annual
report
Technology, investment, and expenditure related to the environment
Firm's investment expenditure for environmentally friendly products/energy-saving
technologies
Technological innovation/imports related to treatment of generated waste, recycling, and
integrated utilization of waste products
Construction and operation of environmental protection facilities
Loans related to environmental protection
Government funds, subsidies, and tax rebates related to the environment
Firm's routine expenditure related to restoring the environment (land, water, air)
Resource consumption and pollutant control
Yearly total consumption of resources (materials/fuel/power/other energy)
Type, quantity, concentration, and destination of gas emissions
Type, quantity, concentration, and destination of efuents
Type, quantity, and destination of solid waste/toxic substances disposal and treatment
Environmental performance improvement
Reduce resource consumption (such as raw materials, water, and energy) per unit of product
Reduce pollutant discharge (such as waste gas, water, and major pollutants) per unit of
product
Environmental benets, such as waste income, environmental by-products income, and
sewage charges savings, etc.
Statement on other social/environmental benets of energy conservation, pollutant
reduction, or resource utilization
Important environmental issues and environmental impact
Violation of environmental regulations and punishment (such as public criticism, lawsuits,
heavy nes, suspension, and closure)
Existence of new, reforming and/or expansion construction projects that have a signicant
environmental impact
A statement about whether the rm/plant is listed as a severely polluting enterprise by SEPA
A statement about whether there is a major risk source and plans for environmental
emergency
Signicant inuence of government environmental law, standards, and/or industrial policy

Firms disclosing the item

Average score

2009

2010

654
429
512
343
682
213

61.4
40.2
48.0
32.2
64.0
20.0

0.72
0.73
0.87
0.57
0.33
0.39

0.80
0.81
0.91
0.69
0.38
0.47

201
181
153
135

18.9
17.0
14.4
12.7

0.29
0.29
0.22
0.18

0.35
0.31
0.26
0.21

334
139

31.3
13.0

0.84
0.25

0.92
0.28

256
53

24.0
5.0

0.49
0.04

0.58
0.10

841
493

78.9
46.2

0.90
0.96

0.97
0.99

269

25.2

0.57

0.59

380
397
583
206
90
41
26
37
23
463
330
285

35.6
37.2
54.7
19.3
8.4
3.8
2.4
3.5
2.2
43.4
31.0
26.7

0.80
0.98
1.60
0.49
0.08
0.09
0.08
0.09
0.05
0.48
0.75
0.61

0.85
1.08
1.65
0.64
0.08
0.12
0.07
0.08
0.05
0.49
0.77
0.62

108

10.1

0.23

0.25

203

19.0

0.31

0.32

354
13

33.2
1.2

0.06
0.01

0.18
0.04

57

5.3

0.09

0.09

185
69

17.4
6.5

0.01
0.08

0.69
0.11

118

11.1

0.15

0.16

(continued on next page)

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X.H. Meng et al. / Journal of Environmental Management 145 (2014) 357e367

(continued )
Item

6.
(I7)
1.
2.
3.
4.
5.
6.
7.
8.
(I8)
1.
2.
3.

Firms disclosing the item

Complaints of local residents/community and/or cases of collective environmental petition

Compliance with environmental regulations
Statement about whether pollutants of gas emissions reach specic environmental
standards
Statement about whether pollutants of efuents reach specic environmental standards
Statement about whether noise meets specic environmental standards
Statement about the treatment of general solid waste in accordance with the law
Statement about the safe treatment of toxic substances or risk waste in accordance with the
law
Discharge permission, sewage charges in accordance with the law, and actual amount paid
The progress/schedule of tasks of total emission reduction at the plant and/or rm level
Environmental assessment of construction projects in accordance with the law
Environmental public welfare activities and other
An overview of environmental public welfare activities (such as environmental education,
tree-planting afforestation, and biodiversity conservation)
An overview of potential environmental inuences on global warming, ozone layer, acid
rain, or water eutrophication.
Other environmental-related information

Average score

2009

2010

1
321
150

0.1
30.1
14.1

0.00
0.11
0.16

0.00
0.14
0.20

177
59
65
16

16.6
5.5
6.1
1.5

0.21
0.06
0.08
0.02

0.24
0.08
0.10
0.03

71
54
89
87
57

6.7
5.1
8.3
8.2
5.3

0.17
0.09
0.11
0.06
0.11

0.21
0.09
0.14
0.06
0.09

0.7

0.01

0.01

36

3.4

0.06

0.07

Index items are classied into eight categories. The sample contains 533 rms assessed in 2009 and 2010. The third and fourth columns present the number and percentage of
rms disclosing each item, respectively. The average score on each item for the full sample of rms is reported in the last column.

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