Disclosure of Environmental Compliance Management on Corporate Websites: Literature Review and Future Research Foundation

Disclosure of Environmental Compliance Management on Corporate Websites: Literature Review and Future Research Foundation

Heiko Henning Thimm (Pforzheim University, Pforzheim, Germany) and Karsten Boye Rasmussen (University of Southern Denmark, Odense, Denmark)
DOI: 10.4018/IJSECSR.2020010103

Abstract

Environmental disclosure in business has been researched. However, only a few projects have addressed disclosures in connection to the companies' obligations to follow environmental laws, standards, and regulations which is the main objective of the field of corporate environmental compliance management (CECM). This article describes the basis of a systematic literature review and the current state of knowledge about CECM website disclosure. Furthermore, major conceptual and methodological aspects for future disclosure studies are presented. The authors also propose a global CECM data collection and further research directions in order to close today's knowledge gap concerning determining factors and major characteristics of CECM disclosure. The research directions are exemplified by a set of novel questions. Future investigations of these questions through corresponding data analysis on the basis of the proposed CECM data collection will yield new insights that are relevant for researchers, practitioners, and governmental agencies.
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Introduction

Managing compliance with environmental laws and regulations is a major corporate sustainability management task. Corporate Environmental Compliance Management (CECM) implies the company’s obligation to ensure that first and foremost all relevant laws and regulations in their latest editions are known and secondly are enforced by appropriate measures (Thimm, 2017). The CECM work field can be broadly divided into strategic, tactical, and operational compliance management tasks. These tasks need to address many different aspects such as the workforce and the infrastructure of the company, the production and the operational processes, and the products and the services. Compliance violations may be the result of many different situations such as communication and information management problems, breakdowns of infrastructure and machines, failed judgment by people, natural disasters, sabotage acts, plus other human factors. Non-compliance events can ultimately lead to governmental sanctions such as fines and loss of permits. Furthermore, breaches of environmental laws almost always lead to reputational damage which even may hurt the company economically harder than fines.

Firms increasingly follow the Triple-Bottom-Line (TBL) framework that John Elkington coined in 1994 (Elkington, 1998). Through the TBL adoption companies demonstrate their commitment to focus on social and environmental concerns just as they do on profits. Instead of focusing on one bottom line, it is focused on the three: profit, people, and the planet. The TBL also expects companies to address these three bottom lines in the corporate reporting practice by ((Jackson, Boswell, & Davis, 2011), p. 56) “presenting what the business is doing well, along with areas that need improvement.” In the literature and in the business practice TBL reporting and sustainability reporting are often used interchangeably because both at their very core are all about profit, people, and the planet. Systematic discussions of both concepts are for the example given in (Adams & McNicholas, 2007; Jackson et al., 2011). The Global Reporting Initiative (GRI) guidelines (Global Reporting Initiative, 2015) have quickly emerged to one of the most popular guidelines for sustainability reporting for the business. Several environmental performance indicators recommended by the GRI are referring to the firm’s regulatory compliance record. In particular, firms are advised to report the number of non-compliance sanctions and the total monetary value of non-compliance fines. The GRI guidelines can therefore be viewed as an exemplification of the fact that both concepts, CECM and sustainability reporting, are closely related to each other.

The ongoing digitization of the business world and the low cost of electronic publishing compared to the production of paper-based documents will make the Internet the primary medium for sustainability reporting in the near future. As a result, internet-based sustainability disclosure will become an “expanding field of research” (Hahn & Kühnen, 2013) which will include newsletters (Dikeocha, 2019), social media, and in particular disclosure on websites. In fact, during the last two decades, the use of corporate websites to disclose information about the firm’s efforts concerning Corporate Social Responsibility (CSR) has gained growing popularity (Atli, Vidović, & Omazić, 2018; Bonson & Escobar, 2002; Ettinger, Grabner-Kräuter, & Terlutter, 2018; Tagesson, Blank, Broberg, & Collin, 2009; Tukker, Bennett, Burritt, Jasch, & Schaltegger, 2009). Since firms increasingly follow the TBL principle, today’s website disclosure practice includes a growing extent of environmental management information.

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