Longitudinal study of Thai listed companies' environmental disclosures and current environmental shadow accounts

Worldwide economic growth presents challenges to the future of humankind including environmental issues. Companies’ licences to operate are granted under a social contract between society and the company. Companies disclose their activities to the public via their annual reports or sustainability reports with a focus on legitimacy and stakeholder rights. However, companies’ environmental reports are still voluntary in most countries. Two key aspects of corporate environmental reporting are corporate disclosures and stakeholders’ perspectives (including shadow accounts), relating to corporate environmental performance and accountability. This study examines the nature of environmental disclosures of Thai listed companies and also provides a critical perspective of corporate environmental reporting in the form of shadow accounts by Non-Governmental Organisations (NGOs). Evidence relating to the differences between corporate environmental reporting and shadow accounts, and critical perspectives of NGO representatives are discussed, compared and contrasted to provide a holistic view of the state of environmental reporting of Thai companies.

A mixed methods approach has been implemented as follows: in phase 1, content analysis of the environmental disclosures in annual and sustainability reports of 108 listed companies for the years 2010- 2014 was conducted. EViews9 has been used to undertake the quantitative analysis of the coded data. The second phase involved obtaining critical perspectives of NGOs on the role of shadow accounts, using semi-structured interviews (19 interviewees) and thematic analysis to analyse the data. The theoretical lens of legitimacy, stakeholder, and media agenda setting theories have been applied to the research findings.

The results of the corporate environmental disclosures in annual and sustainability reports show increasing trends of voluntary reporting. High profile industries predominantly disclosed emissions, effluents, and waste data. The Thai Sustainability Reporting Guidelines released in 2012 were found to have a significant effect on the disclosures of the agricultural industry, the age of the company and the extent of media attention had a positive relationship with environmental disclosures whereas the profitability ratio had a negative relationship. Meanwhile, in relation to the perspectives of NGOs on shadow accounts, this study has found as prior studies on voluntary environmental disclosures that corporate environmental reports’ quantity and quality are serious issues, which activate civil society’s criticism of the information. The shadow accounts by NGOs published through the media, especially social media, were found to attract public power and support. Government information (especially Environmental Impact Assessment reports (EIA) provided by the Office of Natural Resources and Environmental Policy and Planning (ONEP)) was found to be more useful to the NGOs than company information. Furthermore, the interviewees also provided some recommendations to improve corporate environmental disclosures, to make them more reliable and useable such as through third party verification.

By looking at the two dimensions of companies’ voluntary reporting and the civil society’s representative views, information gaps between the voluntary information companies provide, and the civil society representative requirements have been highlighted. In addition, this study demonstrates the different levels of legitimacy, and internal and external pressures on voluntary environmental reporting by considering the adoption of the GRI reporting framework as soft law. Finally, this study adds to the environmental reporting and shadow accounts literature as it was conducted in the context of an economically developing but environmentally sensitive region of the world, Thailand.