Description
It talks about the attitude of the corporates towards the environmental communication to shareholders. The paper talks about the objectives and the methodology adopted for the research. It then highlights the key findings of the survey. Then it highlights the existence of EMS by industry
Corporate Attitude towards Environmental Communication to Shareholders
Introduction Introduction
• Main Focus of the Paper is on the views of Environmental Managers regarding the impact of environmental ‘news’ on the companies’ ‘external’ stakeholders Earlier studies focused on market reactions (in terms of share prices) to externally produced environmental information.
•
•
A few experimental studies investigated analysts reaction to positive and negative narrative information regarding Environment.
A second active branch of the literature has examined the subsequent reporting behaviour of companies in the light of social or environmental ‘disturbances’
•
Information Inductance
• This paper does not directly consider the impact of incidents on external parties or related proxy phenomena such as share price, nor does it directly explore the firm’s own disclosures. It focuses instead on the perceptions of a company’s own environmental manager. The phenomenon thus explored is the one of “Information Inductance”. It refers to the practice whereby the way in which a firms’ activities are reported can influence the way in which these activities are carried out.
•
Objective Objective: 1) a study of the share price reaction to information published to get the views of the stakeholders 2) perceptions of companies, environmental sensitivity and management system Methodology Methodology sample: 200 companies prone to pollution from London stock exchange companies questionnaire divided into 3 sections: 1) pollution control and environment policy, 2) environment communication to stakeholders and 3) personal details of the
Likert scale, yes-no quest and open ended questions Purpose of questions • q1: nature of the business, environment policies, pollution control assessments etc • q2: issues of communication to stakeholders • q3: details of the respondents
How ‘polluting’ is your company?
• YES: 65-88% • Suggested and ‘Other’ categories • Precision v/s Brevity • Lack of homogeneity • Just one ‘clean’ response: Director of Finance of a Construction company
Environmental Communications to Stakeholders
• Focal section of questionnaire on the communication of environmental information to corporate stakeholders • Includes views on incidents involving the environmental strategy • 17 companies were named by environmental agency in their ‘hall of shame’ and their share prices were analysed
Questionnaire
Major Observations
• 33% respondents agreed their company were subject to incident from Environmental Agency whereas they did not think it affected the share price –However , evidences prove otherwise • 69% respondents agreed that shareholders were informed about the improvements in company’s pollution control • The mean level of interest in environmental control which respondents imputed to shareholders was 3.05 • Opinions of importance of environmental communication for shareholders showed higher mean score of 3.41 • Possible explanation can be mismatch between environmental and financial significances of environmental controls
– Financial impact of polluting events may be relatively insignificant – Some respondents regarded pollution controls as a rather detailed technical issue – For reputation and not for content
Existence of EMS by Industry
• Presence of an Environmental Manager
Findings from the Survey
• A variety of practices, even across comparable sectors • The company management may be underestimating the possible share price effects of environmental pollution incidents. • Shareholders are deemed to be the stakeholder group least interested in environmental communication.
Points to Ponder
? Need for companies to develop their awareness of the importance of environmental issues. ? This development might usefully include ? Formalizing environmental management ? An increased focus on the importance of environmental communication to a variety of stakeholders. ? a significant association between the two ? Level of reporting activity may not match the degree of importance attached to environmental concerns by non-financial stakeholders
Appendix: Survey Questionnaire
Questionnaire
Pollution Control and Environmental Policy
• • • Which types of pollution could be caused by your company? Does your company have an environmental policy statement? Does your company conduct an annual assessment of its pollution control? •
Environmental Communications to Stakeholders
Please indicate the extent to which you think shareholders are interested in any environmental controls that have been introduced by your firm. Are you aware of any pollution incidents involving your firm, which have been reported to the Scottish Environment Protection Agency (SEPA) or the Environment Agency (EA), that resulted in a fine or other penalty? •
Personal Details
Are you the primary ‘spokesperson’ for your company on environmental/pollution issues? How long have you been in your position? Were you employed by your company before you held this position?
•
•
•
Thank You!
doc_386483131.ppt
It talks about the attitude of the corporates towards the environmental communication to shareholders. The paper talks about the objectives and the methodology adopted for the research. It then highlights the key findings of the survey. Then it highlights the existence of EMS by industry
Corporate Attitude towards Environmental Communication to Shareholders
Introduction Introduction
• Main Focus of the Paper is on the views of Environmental Managers regarding the impact of environmental ‘news’ on the companies’ ‘external’ stakeholders Earlier studies focused on market reactions (in terms of share prices) to externally produced environmental information.
•
•
A few experimental studies investigated analysts reaction to positive and negative narrative information regarding Environment.
A second active branch of the literature has examined the subsequent reporting behaviour of companies in the light of social or environmental ‘disturbances’
•
Information Inductance
• This paper does not directly consider the impact of incidents on external parties or related proxy phenomena such as share price, nor does it directly explore the firm’s own disclosures. It focuses instead on the perceptions of a company’s own environmental manager. The phenomenon thus explored is the one of “Information Inductance”. It refers to the practice whereby the way in which a firms’ activities are reported can influence the way in which these activities are carried out.
•
Objective Objective: 1) a study of the share price reaction to information published to get the views of the stakeholders 2) perceptions of companies, environmental sensitivity and management system Methodology Methodology sample: 200 companies prone to pollution from London stock exchange companies questionnaire divided into 3 sections: 1) pollution control and environment policy, 2) environment communication to stakeholders and 3) personal details of the
Likert scale, yes-no quest and open ended questions Purpose of questions • q1: nature of the business, environment policies, pollution control assessments etc • q2: issues of communication to stakeholders • q3: details of the respondents
How ‘polluting’ is your company?
• YES: 65-88% • Suggested and ‘Other’ categories • Precision v/s Brevity • Lack of homogeneity • Just one ‘clean’ response: Director of Finance of a Construction company
Environmental Communications to Stakeholders
• Focal section of questionnaire on the communication of environmental information to corporate stakeholders • Includes views on incidents involving the environmental strategy • 17 companies were named by environmental agency in their ‘hall of shame’ and their share prices were analysed
Questionnaire
Major Observations
• 33% respondents agreed their company were subject to incident from Environmental Agency whereas they did not think it affected the share price –However , evidences prove otherwise • 69% respondents agreed that shareholders were informed about the improvements in company’s pollution control • The mean level of interest in environmental control which respondents imputed to shareholders was 3.05 • Opinions of importance of environmental communication for shareholders showed higher mean score of 3.41 • Possible explanation can be mismatch between environmental and financial significances of environmental controls
– Financial impact of polluting events may be relatively insignificant – Some respondents regarded pollution controls as a rather detailed technical issue – For reputation and not for content
Existence of EMS by Industry
• Presence of an Environmental Manager
Findings from the Survey
• A variety of practices, even across comparable sectors • The company management may be underestimating the possible share price effects of environmental pollution incidents. • Shareholders are deemed to be the stakeholder group least interested in environmental communication.
Points to Ponder
? Need for companies to develop their awareness of the importance of environmental issues. ? This development might usefully include ? Formalizing environmental management ? An increased focus on the importance of environmental communication to a variety of stakeholders. ? a significant association between the two ? Level of reporting activity may not match the degree of importance attached to environmental concerns by non-financial stakeholders
Appendix: Survey Questionnaire
Questionnaire
Pollution Control and Environmental Policy
• • • Which types of pollution could be caused by your company? Does your company have an environmental policy statement? Does your company conduct an annual assessment of its pollution control? •
Environmental Communications to Stakeholders
Please indicate the extent to which you think shareholders are interested in any environmental controls that have been introduced by your firm. Are you aware of any pollution incidents involving your firm, which have been reported to the Scottish Environment Protection Agency (SEPA) or the Environment Agency (EA), that resulted in a fine or other penalty? •
Personal Details
Are you the primary ‘spokesperson’ for your company on environmental/pollution issues? How long have you been in your position? Were you employed by your company before you held this position?
•
•
•
Thank You!
doc_386483131.ppt