This chapter aims to analyze the online environmental disclosure practice by big polluters in Serbia. The analysis was based on a sample of 69 companies, classified into five affiliation sectors, from the Pollutant Release and Transfer Register (PRTR). The results show that big Serbian polluters still use the traditional management approach since the level of disclosure is less than 30%. To quantify the level of disclosure, Environmental Disclosure Index was employed, containing 15 variables. Most of the analyzed companies on their websites disclosed their environmental certification, environmental policy, and waste management and reduction, while the less informed variable was pollutant types and emissions. Also, the results show that big polluters in Serbia are willing to disclose only positive environmental activities and results.
TopIntroduction
The Industrial Revolution spurred economic growth worldwide but also caused a decline in environmental quality, leading to global warming and climate change concerns. It is further exacerbated by the substantial increase in CO2 emissions from energy use in newly industrialized economies since the 1990s compared to already industrialized countries (Mitić et al., 2023a). Extreme climate changes resulted in increased environmental pollution and GHG emissions by all business subjects, which led to the need to accomplish optimal ecological, social, and economic performance (Bazhair et al., 2022). This is particularly important for big polluters since “100 active fossil fuel producers account for 71% of global industrial GHG emissions since 1988 and 52% of all global industrial GHGs emitted since the start of the industrial revolution in 1751.” (CDP Carbon Majors Report 2017, pp. 5-8). Companies should reveal their environmental actions to present current activities and future commitments concerning reducing pollution and GHG emissions, as they both contribute to and solve these environmentally hazardous activities. But the question is, do they do that, and at which level?
Understanding and implementing the data disclosure concept requires considering two issues: why is disclosure necessary, and how much data should companies disclose? Mathews (1997) describes data disclosure as the voluntary disclosure of information, qualitative and quantitative, by an organization to inform or influence the public, whereby the published quantitative information can be financial or non-financial. Disclosure can be mandatory and voluntary. In the first case, there are legal requirements related to what to disclose where failure to do so may cause a penalty (Akhter et al., 2022), and in the second one, it depends on the company.
Hendriksen (1982) distinguishes three types of the disclosure: adequate (minimum degree of disclosure but sufficient so that the user of the report is not misled), fair (ethical goal of providing equal treatment to potential readers), and complete (presentation of all relevant information). According to Frooman (1997), disclosure is essential for enlightened self-interest where companies promote the interests of shareholders, while Smith (2003) notes it is not just good but also a smart thing to do because it reduces information asymmetry (Nobanee & Ellili, 2016). Also, disclosure can have a positive impact on financial performance (Carnini Pulino et al., 2022), which leads to growth and sustainability. But other authors, like Deegan et al. (2002), go in the other direction and relate it to the organization's survival. It gives a good foundation to conclude that, in general, disclosure is essential to increase transparency and ensure legitimacy. This is closely related to the legitimacy theory that refers to social expectations in the form of prevailing social ideologies, managers' attitudes toward what they consider legitimate social expectations, and business behavior. Barnett (2007) believes that legitimacy arises from the congruence between the company's activities and social expectations, stressing that the loss of legitimacy can occur when a company acts contrary to social expectations and as a result of changes in social expectations.