Determinants of Social and Environmental Accounting Information Disclosure: An Analysis of top 50 Firms in New Zealand

In this study, we examine the determinants of voluntary disclosures of Social and Environmental Accounting (SEA) among the top 50 firms in New Zealand over the period of 2011 to 2017. The study is an extension of Hackston and Milne’s (1996), however distinct in various ways; we use a relatively larger dataset spanning over seven years, we look at both qualitative and quantitative SEA information, and we include some additional industry and corporate governance variables that provides insightful results. The study is timely in that New Zealand is the first country to implement mandatory climate risk reporting according the New Zealand Minister for Climate Change, Mr. James Shaw (Climate Disclosure Standards Board, 2020), which is a significant step towards supporting SEA disclosure. Whilst realizing that it is optional for firms to be engaged in SEA disclosures, we come up with a more appropriate research design to examine both qualitative-and quantitative-types of SEA disclosure using probit and logit regressions. To contribute to this area of SEA, we extend our analysis to show the impact of industry-type, board size and board composition. The regression results show that profitability is positively associated with quantitative-type disclosure, and size is positively associated with both quantitativeand qualitative-type disclosures. The big four auditors are indifferent to the types of SEA disclosure; and board size is negatively associated with qualitative-type disclosure, and positively associated with quantitative-type disclosure. At sectoral level, building sector is positively associated only with the qualitative-type, whereas energy, retail and service sectors have positive associations in general. Interestingly, we note that female (male) directors have positive (negative) association with both type of disclosures. This study contributes to the SEA literature by categorizing and looking at both qualitative and quantitative SEA disclosures, looking at the typ