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A Relationship Between Environmental Disclosure and Environmental Responsiveness Essay (Critical Writing)

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Updated: May 14th, 2022

Introduction

Critical review of journal articles entails the assessment of the articles’ validity, strengths, and weaknesses. The review facilitates in enlightening the readers through analysing, interpreting, and explaining the article. An effective critique is one that facilitates the reader to make a value judgment of the article. Such a review offers information about the approach the author used in compiling the article as well as the conclusion made. Besides, it brings out the article’s significance with respect to its field and it analyses the article’s strengths and weaknesses using relevant examples. This paper aims at compiling a critical review of a journal article (A comprehensive comparison of corporate environmental reporting and responsiveness) by Van Staden and Hooks.

Summary

The article is motivated by the desire to establish if there is a relationship between organisations that have been perceived as environmentally responsive relative to an autonomous ranking and the degree and quality of their revelations about their environmental effects. In a bid to determine the positive relations between the revelations and environmental responsiveness, the article employs the legitimacy theory. Besides, the article assesses all kinds of environmental reports. The degree and quality of the report is compared with an autonomous evaluation of every organisation’s environmental responsiveness. The article found considerable affirmative correlations between autonomous ranking and rankings based on the quality and degree of revelation. The article suggested that organisations’ revelations reflect their environmental responsiveness and underpins the prospects developed relative to legitimacy theory.

Critique

The research question for this article is if there is a positive correlation between companies’ environmental responsiveness and environmental disclosure (Staden & Hooks 2007). Currently, the society has become environmental conscious. Many people wish to associate with organisations that are environmental friendly. Besides, different countries have come together to establish environmental laws that organisations ought to abide by in their operations. As organisations seek to attract more customers and operate within the established environmental guidelines, they tend to package their products and services in a manner that appear to be environmental conscious. Moreover, they ensure that they supply the public with information regarding their operations and their environmental conservation strategies. With this respect, this article is very interesting. The article not only tries to evaluate the reasons why organisations make great efforts to report on their environmental policies, but also gives some of the strategies that the organisations apply in reporting their environmental practices.

In addition, the article brings out the correlation between the organisations’ environmental responsiveness and their environmental disclosures, a phenomenon that helps the readers to determine if the organisations actually commit to achieving what they report on relative to environmental issues. The outcomes of the article are very critical as they facilitate in determining the level of organisational commitment to environmental conservation. Through the outcomes, individuals would determine if the organisations commit to environmental conservation simply to attract more customers or because they understand and appreciate their duty to conserve the environment. Therefore, from the outcomes, readers would determine if organisations use environmental reporting as a strategy to retain customers or they actually respond to environmental issues as they report.

One of the factors that motivated the authors to compile this article at this time is the increase in the number of environmental reports that different organisations are currently publishing. Numerous scholars have come up with different explanations as to why organisations publish their environmental reports. Some claim that they do it to counter certain crises facing their organisations. Despite the numerous publications, no literature review attempts to address the issue of legitimacy as the reason behind the increase in environmental reporting. Consequently, the authors compiled this article with an aim of bringing out the underlying relationship between organisations’ environmental responsiveness and the degree and quality of deliberate environmental revelations.

This topic is very important since it adds to the existing literature. The article introduces the issue of legitimacy to the existing literature on companies’ environmental reporting, thus introducing a novel idea into this field. The topic contributes to literature in different ways. For instance, the research method employed covers a wider scope, thus addressing numerous environmental responsiveness issues. The method looks into the quality and the level of organisations’ environmental disclosures. From a theoretical point of view, the topic introduces the issue of legitimacy theory, which is an absent aspect in other scholarly articles that address the same problem.

The research is founded on the aspect of legitimacy theory, which is an aspect that other existing scholarly articles have overlooked. The authors have applied this theory appropriately throughout the article. In the literature review, they have tried to explain the reasons why organisations disclose their environmental activities and relate their motives to the legitimacy theory. The legitimacy theory posits that for an organisation to attain legitimacy, it has to operate within the expectations and norms of the society. In this respect, the authors have proved that most organisations make their environmental responsiveness public with an aim of winning the trust from the public, thus improving their profit margins. The authors have looked at different scholars who have discussed the various strategies used by organisations to attain legitimacy. Using the various findings made by different scholars, the authors have proved that all these strategies support the legitimacy theory. Some of the key motivating literatures on which this literature depends on include literature by Cho and Patten in 2007 that addresses the role of environmental disclosures in establishing legitimacy. Besides, the researchers depend on the work by De Villiers and Van Staden that determine if environmental disclosures have a legitimising affect.

The authors chose to use a literature search as the research method. Literature search entails reviewing the existing materials. In this case, the authors analysed the available company reports and online databases to determine the correlations between companies’ environmental responsiveness and disclosures. Numerous research methods could have facilitated in this study like personal interviews, online surveys, and talking with company leaders. Nevertheless, of all the possible research methods, literature search proved to be the most appropriate method. The method is inexpensive relative to all the other methods (Saunders, Lewis & Thornhill 2009). Even tough it requires a lot of time to gather all the required information, literature search proved as the best research method for this study. In a bid to understand the correlations between organisations’ environmental reporting and responsiveness, the authors had to go through environmental reports of various organisations, which called for the authors to conduct a thorough search of the reports. Besides, they had to compare the reports with the existing literature. Of all the available research methods, literature search was the most economical and it could help to gather accurate and adequate information.

The authors used convenience-sampling technique to come up with the most appropriate sample population. The method is inexpensive and allows researchers to work with only the most convenient variables (Smith 2003). In this context, the authors identified 32 companies from the CBSD ranking and to cater for the validity and reliability of the information gathered from the sample, the authors made sure that they used companies from the different subgroups as per the ranking. This aspect made sure that all companies were represented, and thus helped the authors to come up with a comprehensive report.

In an attempt to compile the final report, the authors analysed the gathered information on two different levels, viz. univariate and multivariate level. They computed the spearman-Rank order correlations, which facilitated in bringing out the correlation between the variables of interest. Quality and the degree of revelation acted as the dependent variables, while external ranking acted as the independent variable. One of the benefits of using the univariate analysis is that the method is reliable. The method gives accurate results as only a single variable is determined while all the other data is known. Multivariate analysis offers a room for researchers to carry out multiple analyses. Hence, multivariate analysis gave the authors a chance to evaluate the different dependent variables and their correlation with the independent variable (Ho 2006). Through multivariate analysis, the authors were in a position to analyse the varied strategies used by organisations in compiling the environmental reports and their relationship with the legitimacy theory. The major drawback of using a univariate analysis is that it does not cater for all factors that are at play. Only one variable can be changed at a time and this aspect makes it hard for researchers to come up with a strong correlation amongst the different factors. On the other hand, multivariate analysis would facilitate in drawing these correlations. Nevertheless, the analysis also has its own limitations. The method is hard to interpret, which makes it hard for readers to understand the analysis (Huberty & Morris 2003).

The objective of the study was to assess if there is a positive relationship between environmental disclosure and environmental responsiveness. The study’s conclusions were in line with the findings. The study established a positive relationship between environmental disclosure and responsiveness. Upon controlling the factors like the type of industry and company size, the authors found that responsive companies were using environmental disclosure as a strategy to achieve legitimacy. From the study, it is clear that environmental responsiveness acts as the major determinant of organisations’ environmental orientation. The research brings out the concept of legitimacy as the factor behind the increase in number of organisations disclosing their environmental activities. Hence, the paper brings to the attention the need for researchers to carryout further investigation to determine the actual role of legitimacy in the current level of companies’ environmental disclosures.

Conclusion

There is a strong correlation between environmental responsiveness and environmental disclosure. According to this research by Van Staden and Hooks, organisations that take proactive environmental responsiveness tend to disclose their activities more than those that do not. The research raises the issue of legitimacy, which a majority of the existing literature overlooked. Hence, future studies ought to focus on this issue to determine its role in the current rate of companies’ environmental disclosures.

Reference List

Ho, R 2006, Handbook of Univariate and Multivariate Data Analysis and Interpretation with SPSS, Chapman and Hall/CRC, London.

Huberty, C & Morris, J 2003, ‘Multivariate analysis versus multiple univariate analyses’, Psychological Bulletin, vol. 105, pp. 302-308.

Saunders, M, Lewis, P & Thornhill, A 2009, Research Methods for Business Students Importance of theory in research, 5th edn, Pearson, Harlow.

Smith, M 2003, Research Methods in Accounting, Sage Publications, Thousand Oaks, CA.

Staden, C & Hooks, J 2007, ‘A comprehensive comparison of corporate environmental reporting and responsiveness’, British Accounting Review, vol. 39 no.3, pp. 197-210.

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