Voluntary environmental disclosures in the annual report: The impact of the National Greenhouse and Energy Reporting Act

Drawing on legitimacy theory and information-based theories, this study examines the extent of environmental disclosures in the annual reports of Australian corporations regulated by the National Greenhouse and Energy Reporting Act and competitor companies not regulated by the Act. After adjusting for industry and size, results from this investigation indicate carbon emission and energy consumption is not correlated with environmental disclosure in the first reporting period under the Act. A key conclusion drawn from this study is the existence of an industry-wide effect whereby companies not regulated by the Act significantly increased disclosure in the first reporting period under the Act. These findings have implications for standard-setters and policy-makers regarding the 'knock on' effect of legislation across industries.