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

Akash Chand; Nikeel Kumar; Ronald Ravinesh Kumar; Selvin Prasad; Arvind Patel; Peter Josef Stauvermann

doi:10.5755/j01.ee.33.2.20819

Authors

Akash Chand School of Accounting, Finance and Economics, The University of the South Pacific, Fiji
Nikeel Kumar School of Accounting, Finance and Economics, The University of the South Pacific, Fiji
Ronald Ravinesh Kumar School of Accounting, Finance and Economics, The University of the South Pacific, Fiji
Selvin Prasad School of Accounting, Finance and Economics, The University of the South Pacific, Fiji
Arvind Patel School of Accounting, Finance and Economics, The University of the South Pacific, Fiji
Peter Josef Stauvermann Department of Global Business & Economics, Changwon National University, South Korea

DOI:

https://doi.org/10.5755/j01.ee.33.2.20819

Keywords:

Social and Environmental Accounting, New Zealand, Probit, Logit, Qualitative and Quantitative disclosure

Abstract

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 quantitative- and 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 type of industry preferring SEA disclosures, and extending the analyses to include corporate governance variables. In addition, the study presents some important factors that can influence the publication of both quantitative and qualitative SEA information for the interest of researchers, practitioners and regulators working in this domain in order to improve the overall SEA disclosure for firms. Finally, this paper shows the importance of gender balancing on boards in order to be engaged in voluntary disclosures such as SEA.

Author Biographies

Akash Chand, School of Accounting, Finance and Economics, The University of the South Pacific, Fiji

Akash Chand formerly was teaching assistant in the School of Accounting and Finance, at the University of the South Pacific (USP). He holds B.Com in Accounting and Finance and Post Graduate diploma in Accounting from USP.

Nikeel Kumar, School of Accounting, Finance and Economics, The University of the South Pacific, Fiji

Nikeel Kumar formerly was assistant lecturer in the School of Accounting, Finance and Economics at the University of the South Pacific (USP). He holds a B.Com in Economics and Finance and M.Com in Economics from USP.

Ronald Ravinesh Kumar, School of Accounting, Finance and Economics, The University of the South Pacific, Fiji

Ronald Ravinesh Kumar, PhD, is associate professor in the School of Accounting, Finance and Economics, at the University of the South Pacific.

Selvin Prasad, School of Accounting, Finance and Economics, The University of the South Pacific, Fiji

Selvin Prasad is assistant lecturer in the School of Accounting, Finance and Economics at the University of the South Pacific (USP). He holds B.Com in Accounting and Finance, Post Graduate Diploma in Accounting, M.Com in Accounting, and currently pursuing PhD in Accounting from USP.

Arvind Patel, School of Accounting, Finance and Economics, The University of the South Pacific, Fiji

Arvind Patel, PhD, is professor in the School of Accounting, Finance and Economics, at the University of the South Pacific.

Peter Josef Stauvermann, Department of Global Business & Economics, Changwon National University, South Korea

Peter Josef Stauvermann, PhD, is professor of economics at the Department of Global Business & Economics at Changwon National University.