THE LANGUAGE OF CORPORATE ENVIRONMENTAL DISCLOSURE: A RESEARCH NOTE

We investigate different language techniques used in corporate environmental disclosures and test whether the impression management (see Neu et al., 1998) hypothesis holds when disclosures are measured as such. We argue that the way information is presented (i.e., the language and verbal tone of narratives) in environmental disclosure is equally or perhaps more important than its amount or thematic content, and that such narrative choice is not neutral to firm environmental performance. We use a computer-based measurement approach to evaluate the extent of language bias contained in corporate environmental disclosures for a cross-sectional sample of U.S. firms' 10-K reports. This study contributes to the social and environmental literature by (1) systematically analyzing the language used in environmental disclosures, (2) examining whether corporations attempt to manage impressions by writing such disclosures, and (3) further exploring the characteristics of impression management.