School of Business Administration faculty Darrell Brown and Scott Marshall are studying why corporations disclose their environmental policies, even though it is not required by law. Having looked at company reports and 10-K filings for the past six years, the professors are presenting their findings at a Global Reporting Initiative conference in Amsterdam in May. Brown shares their research.
Q: What kind of voluntary environmental information are corporations providing?
A: The disclosures range widely, from greenhouse gas emissions to hours of employee environmental training to whether a company has a sustainability director.
Q: How do companies benefit by revealing these facts?
A: We found that investors in companies that disclosed more environmental information, demanded slightly lower returns than investors in companies that disclosed less.
Q: What does the consumer get out of it?
A: Actually, it is investors who benefit by having a better understanding of how a business operates. I do not like to speculate, but it is possible that investors find that a willingness to provide voluntary environmental disclosure is a signal of good management.
[photos: above, Darrell Brown, professor of accounting in the School of Business Administration; below, LEED Gold designation for green building.]
Around the Park Blocks: Spring 2008