Do environmental disclosures in U.S. annual reports differ by environmental performance?

This study investigates the relationship between environmental disclosures made within the various sections of the 1992 annual reports of the 20 U.S. firms named by Fortune (Rice, 1993) as the ten leaders and ten laggards in environmental performance. We compared the disclosures made by the companies identified as leaders with the disclosures made by the companies identified as laggards, to determine if there was a relationship between companies' environmental performances and their environmental disclosures. We found that laggards made significantly more mandatory disclosures than did the leaders; however, there was little difference in the voluntary disclosures of the two groups. The leaders' disclosures were positively correlated between the mandatory and voluntary sections; there was virtually no correlation within the laggards. Leaders and laggards could be properly classified on the basis of their environmental disclosures.