Environmental Disclosure in Annual Report of Energy Companies

This article discusses the importance of environmental disclosure in the annual reports of energy companies. It covers the impact of carbon emissions and energy on the environment, the Global Reporting Initiative and its role in aiding companies to report their effects on climate change, corruption and human rights. The article also includes a literature review and research methodology. Course code and college/university not mentioned.

ENVIRONMENTAL DISCLOSURE IN ANNUAL REPORT OF ENERGY COMPANIES IN
NEW ZEALAND
[Author Name(s), First M. Last, Omit Titles and Degrees]
[Institutional Affiliation(s)]

Contents
CHAPTER 1: INTRODUCTION............................................................................................................................ 3
Environmental Disclosure and its Importance...................................................................................... 3
Global Reporting Initiative............................................................................................................................. 5
Carbon Emissions and Energy...................................................................................................................... 5
CHAPTER 2: LITERATURE REVIEW................................................................................................................ 7
CHAPTER 3: RESEARCH METHODOLOGY................................................................................................. 17
Introduction....................................................................................................................................................... 17
Research Methodology.................................................................................................................................. 18
Research Methods and Data Sources....................................................................................................... 18
Advantages of Quantitative Research..................................................................................................... 20
Disadvantages of Quantative Research................................................................................................... 20
Rationale for Research Methodology...................................................................................................... 21
CHAPTER 4: RESULTS AND DISCUSSION................................................................................................... 22
Descriptive analysis........................................................................................................................................ 22
Scores of carbon emission disclosures by various industries.......................................................24
Regression analysis for the disclosures of carbon emissions........................................................26
Conclusion............................................................................................................................................................... 28
References............................................................................................................................................................... 29

CHAPTER 1: INTRODUCTION
Environmental Disclosure and its Importance
With time, the engagement of a company in CSR issues develops and hence the degree to which
it is in a position to disclose its information. Past research has indicated gradual increases in the
disclosure of CSR in the annual reports of companies. Environmental reporting was first studied
as a segment of social reporting. Different studies have been done regarding corporate socials
reporting as well as environmental reporting. Environmental disclosure can thus be defined as
the disclosing of the information of a company regarding its environmental practices. Such
disclosure may be of benefit to the company and its reputation as compared to the actual
environmental firmly performance as has been proven by a recent study (Haque & Deegan
2010).
The non-anticipated benefit of disclosing information may help lower the incentives of a
company toward improving the environmental performance in the times to come. From the
various analyses done by researchers, it has been demonstrated that the more information is
disclosed by companies with regard to their sustainable practices, the better they were perceived
to be environmentally friendly even under circumstances that the data presented proved
otherwise (Moroney, Windsor & Aw 2012).
With the current business information technology such as the internet accessible equipment and
the tools, the industrial environmental tools of the management, the policies and the legislation
that govern the environmental information has been designed. The information that is obtained
from the environmental information system has been of help to the managers. It has helped the
managers to identify the potential risks, the incurred costs of the structure including the
investment that needs the environmental challenge to be faced by the firm itself.

The surrounding or the environment may not only be protected by those strict economic
outcomes or the results. It is important to note that the environmental information like
accounting of the environment together with the reporting may be done by the individuals on the
voluntary basis. This is usually made possible when the concern is directed to the natural
environment (Lodhia & Martin 2011). The basis of very many environmental researches has
been the use of the information given by the international organization for the standardization
(ISO). In order to comply with these demands or to meet them effectively, the corporate reports
on the annual basis that is commonly referred to as the annual reports AR) besides the
accounting information are considered very important aspect. Such information should be
communicated to the stakeholders of the firm.
Most scholars recognize the tricky nature of this particular method. The concept that aims at the
sustainability of the development will always appear to defy those steps or the different measures
that exist within the financial accounting economic based analysis. These models or the analysis
have taken the center in the determination of the today’s success of most business. The concept
argues that the concept of the economic development and the protection of the natural
environment will always be treated as a single entity and not as separate processes (Beck,
Campbell & Shrives 2010). The used methodology is taken to be qualitative research just to
understand the meaning that the firms and the managers have already been pointed out and
among the key issues highlighted may include the environmental disclosure(ED), how the
individuals exploit their knowledge about the natural environment and the experiences that they
have. The quantitative research will always help in the identification of the concepts, the
comparable metrics and to make the analysis of the statistical information to be successful.

Various authors have talked about the environmental disclosure as the best approach in order to
tack the challenges. The authors have first discussed the literature review. The empirical analysis
can also be used in achieving the specific goals .The description of the process, the data
collection processes, hypotheses subjected to the proper testing and finally there is a presentation
that will include the data processing, the test of the hypotheses and getting the results.
Global Reporting Initiative
The Global Reporting Initiative, GRI, refers to a global independent organizations of stands that
aid business, governments an any other companies or organizations in comprehending and
communicating their effects on issues among them climate change, corruption and human rights.
Owing to the increasing pressure from the various groups of stakeholder for more transparency
on social, environmental and economic implications, most of the companies are forced to make
and produce sustainability reports (Beck, Campbell & Shrives 2010). The frame work of GRI is
suited in such a way that it aids the companies in the identification, collections and reporting of
such information in a manner that is clear, concise and comparable.
Carbon Emissions and Energy
The population of the country is relatively small though it is endowed with many resources that
are naturally occurring. The unfortunate thing about this country is that it cannot have sufficient
internally produced energy (Lodhia & Martin 2011). It is a net importer of the energy in the form
of the petroleum products .It important to note that the ratio of the renewable to non-renewable
has shown consistency since the year 1975.This ratio however showed a lot of decrease almost
by 60 per cent in the year 2014.The proportion of the non-renewable source has entirely relied on
the water flow in the period of years although the records are taken annually.

The most common energy supply sources incudes the coal, the oil gas, the waste gas, biofuel,
solar wood, hydro, geothermal, wind among many more.
The carbon emissions that have dominated the atmosphere of the New Zealand mainly come
from the combustion of the fossil fuels. These fuels are compounds of the carbon, hydrogen and
oxygen elements. When they undergo combustion, a lot of carbon dioxide gas is produced. In the
cases of the incomplete combustion, carbon monoxide is produced instead of the carbon dioxide.
The tremendous increase in the level of the gas can be associated with other activities a part from
the combustion in the identified area or sources (Hsieh 2012). The road vehicle emissions were
up to 37 per cent as indicated by the recent data or statistics. The manufacturing and the
construction industries had their emissions up to 43 per cent while the electricity only
contributed only 11 percentages of the total emissions of the carbon.
The result of this high increase in the level of carbon dioxide in the atmosphere is the increase
amount of the temperatures in this country. This has led to the melting of the glacier, production
of the acid rain whose scorching effects are transferred to the lives of the plants and the animals.
The overproduction of the sooty smoke is attributed to the respiratory tract diseases in the
animals and the reduced photosynthesis rates in the green plants. The net uptake of the carbon
dioxide through absorption in the water bodies and the forest has equally gone down and this has
just worsened the situation (Kaenzig et al. 2011).
The energy and the energy utilities in New Zealand vary from the electricity industry to the oil
and gas companies. The demand for this type of energy has gone so high and this has forced the
companies to explore the new areas whether in terms of technological possibility while applying
the engineering concepts (Lodhia & Martin 2011). There is a lot of the expectation that in the

future this demand will be sufficiently met through increasing the mix of generation
technologies. The role of the electricity is expanding. It is even expected to be a lot with the
increase in the use of the modern cars that uses the electricity.
CHAPTER 2: LITERATURE REVIEW
Climate change has remained a significantly growing issue for numerous decades especially in
the developed countries even though only a few on climate changes have been done in the
developing countries. There is thus a need to encourage and bring on board both the private and
the public sectors urgent and set in place action on both the adaptation and mitigation measures
towards the menace (Hooks & Van 2011). Such an action will have an impact as well as
stimulate the market that would be important in the generation of more investments that are
aimed at the achievement of sustainable energy in the times to come. The effective and most
reliable tool in the combat of climate change is through carbon pricing which would translate the
emission of carbon into a cost that a government a company or business as well as the
accompanying customers are in a position to incorporate into the decisions of reinvestments.
This may also be perceived as sustainable finance.
Researchers and scholars have mentioned that there is an urgent for strong and consolidated
public pressure in the world to mitigate the GHC emissions in as much as there are significant
variations in the GHC mitigations regulatory requirements among different countries. This
illustrates that there could be variations in the policy and regulations between the developing and
developed countries (Cowan & Deegan 2011).
(King, Fogelberg, Hoballah, Malan 2016) as well discusses this in which they say that
sustainability reporting has formed an integrals aspect of global actions which should take into
consideration environmental and social sciences. Owing to this, need to take into account the

policies, standards, relaxations and other instruments arise as well as the need to encourage
organizations to be encouraged to report issues on climate change.
Going by statistics there has been recorded an increase in the consumption of household in New
Zealand with an increase in the income. Still, a shift has been observed in the consumer social
life percentages with a decade ranging between 2005 and 2015 (Albertini 2014). During this
period, there were a high number of households that had high amount of annual disposable
incomes that was to the tune of over IDR 120 million which is on average $10, 000 or IDR 10,
000, 000 per month. The approximation of the middle class of New Zealand which was
composed of income that ranged between IDR 36-120 million is also expected to expand or
attain 32 million household by the end of 2020. This would basically represent an upward growth
in the consumption (Chapple, Clarkson & Gold 2013).
This would in turn lead to an increase in the energy consumption for each of the household
product and hence a rise in the levels of carbon emissions. This would then translate to quite of a
challenge for reporting and disclosure of carbon emission which will at the end have an impact
on the cost of using energy. The main concern thus remains; will there be a reduction in the
carbon emission? Or should there be set in place strategy that can be used for carbon emission?
This remains a sensitive matter of fact that should be given the attention it deserves (Barbu et al.
2014).
The regulations for intention and drive to check on the activities on the environment or carbon
emissions have not properly been set and the guidelines for New Zealand more specifically in
such activities is only adopted by a few of the companies in the country. A company is only able
to generate a sustainability report if it has enough funding out of which from the more than 600

companies available, just about 100 of them make and produce the sustainability report (Hubbard
2011). This can be taken to illustrate that this is more of a voluntary reporting. Should it be set in
such a way that it is mandatory with a penalty being levied on defaulter by the government, then
most of the companies in the countries if not all will be producing reports on sustainability and
disclosing them to the general public.
The next matter that deserves equal consideration is funding of the constraint. After the problem
has elaborately been explained, disclosed and reported, the need to report is thus explored. This
revolves around understanding the need of companies or organizing reporting and disclosing.
Discussions of GRI 4 and GRI standard extended just provide information on how to
environmentally report but instead does not categorically talk about carbon emission (Moroney,
Windsor & Aw 2012). This then translates to the lack of a formal channel that is concerned with
carbon emission in New Zealand. To add on this list of concern is the lack of information on
New Zealand companies’ inclusion in the GDP.
Researchers conducting research in the factors or determinant of environmental disclosure which
offer consideration to the type of industry, the size of the firm as well as its profitability list
Dutch listed companies as these that belong to developed countries. From their findings, they are
able to authoritative make a conclusion that they type of industry and the size of the firm have a
major role to play when it comes to environmental disclosure (Sprengel & Busch 2011). In their
findings, they also establish that there is no significant correlation between profitability and
environmental disclosure. The basis of their argument is borrowing from data extracted from
conditions of financial crisis which may the case where a company has a debt or is suffering
from financial distress.

Discussion was also carried out by researchers on the possibility of mixing reporting with
compulsory and voluntary carbon emissions. Some of the findings cite the need and importance
of reporting as opposed to elaborate investigation or reporting assessment of various types of
carbon emission, carbon volume, intensity of carbon and carbon reporting (Hsieh 2012).
The need of disclosure and reporting of carbon revolve around an investor taking into
consideration the risk on the environment by a company (Bae, Lee & Psaros 2013). This call on
the investor to have access to information that would assist him in coming up with a
development that is environmentally sustainable and the modalities through which the company
would be able to protect the environmental activities from degradation. This would then enable
the investor to make decisions that are grounded and have a basis and thus better and would see
their portfolio improve.
(Gikson and Ensor 1999) tend to this that despite the tremendous developments in environmental
reporting; New Zealand has remained to lag behind. In their argument and reasoning, they state
that the challenge with environmental reporting in New Zealand is the existence of a voluntary
regime and the system is made up of almost no volunteers. This makes New Zealand take slight
steps into the backward direction at a time when most of the other countries are moving forward
in bounds and leaps. The two researches happen to have taken part in the New Zealand corporate
environmental reporting schemes of award since it was started in 1995 (Hsieh 2012). Auckland-
based water utility Water care Services Ltd. Has remained at the helm of winning the award
alongside another early pioneer in environmental reporting, the Electricity Cooperation of New
Zealand.

There have been stand-alone reports that have been provided by Tasman Pulp and Paper, Carter
Holt Harvey, New Zealand Refining, Fletcher Forests as well as Landcare Research, Meridian
Energy and Sanford Ltd which provided their reports most recently. Just as the case with most of
the reports generated within the Australian and US practice, these reports brought together
environmental reporting hand in hand with issues on health and safety (Lodhia & Martin 2011).
The most current developments of a walk towards sustainability or what is termed as the triple-
bottom line reports have been reported but Landcare, Sanford and Meridian in which there have
been attempts in making reports on the economic, environmental as well as the social
performance.
The superiority of such reports to separate reports is a factor of the extent of detail that is covered
in the report, their completeness not the selectivity or the degree to which they are able to
completely integrate financial, social and environmental performance. That notwithstanding,
most of the companies in New Zealand upon committing to stand-alone reporting have
maintained to develop and improve their practices in reporting.
Still, evidence that os derived from Europe proposes that not only are there chances of
improvement in the reporting but also of utmost importance is the claim by companies that
through reporting they have been able to improve their environmental performance as well as
identifying cost saving modalities through waste control and better emissions (Jones 2011).
The traditional annual report was used as a stepping stone to a stand-alone reporting by ECNZ
and New Zealand Refining. Through offering a separate section to issues on environmental
performance, the companies were able to build up their expertise and confidence that enabled
them to launch a different report.

There are numerous other companies in New Zealand that most probably followed suit. Among
them include Tranz Rail, GRD Macreas Ltd and Ports of Auckland which devoted separate
sections of their yearly financial reports to issues of environmental and health as well as impacts
on safety.
One of the previous research that was conducted in New Zealand aimed at coming up with a
stand-alone annual environmental report. In the study, questionnaires were generated on which
views were sought with regard to the manner in which the report well communicated the
environmental impacts of the companies and the management of the environment to the main
stakeholders in the groups. The study also involved asking the respondents how their own
existing state or anticipated reporting practices were in correspondence with the set out model
report. From the survey, it was established that 60 companies and 20 local authorities took part
in the survey which represented almost 30% response rate. Out of the 60 companies, 24 of them
which represented about 40% of the companies which took part in the exercise either provided or
were intending to provide environmental reports or the combined environmental and health and
safety reports. This statistic was less likely to be indicative of the 200 companies that were
surveyed.
Even so, it is arguable that the lowest possible rate of take up which was 12 per cent represented
by 24 out of 200 companies of used in the survey provided quite encouraging findings. This was
significantly more that the amount that is evidenced through the statistic found in the New
Zealand Environmental Reporting Awards.

Still, there was knowledge about two other organizations that had already issued separate reports
alongside at least two others that were really working on issuing their initial report.
May be then, as much as 15 per cent of the perceived to be the largest New Zealand
organizations would publicly be reporting their environmental performance within a span of
three years. Numerous other companies in the survey steered it clear that they would maintain
reporting their environmental performance using the ancient annual report.
Reluctance over Independent Verification
Some of the aspects of the study illustrated difference in the views between the users and the
issuers. As illustrated in the figure below, it can be noticed that just a handful of the companies
issued or planned to issue their environmental report information which was independently
verified. Bearing in mind that just about 40% of the sample that was used in the study issue or
anticipated to issue stand-alone environmental reports, just approximately a third of the group

had their reported verified independently or were planning to have the independent verification
done.
An idea could be conceived by an individual that the option of coming up with an independent
verification would yield merit just as is the case with financial data that is audited in an annual
report (Frias et al. 2014). Most of the companies in the study however observed it in a similar
way as most of the correspondents noted that it was not in the interest of the company to have the
stakeholder misled even as yet another group suggested that the idea of having the company
being kept honest through an independent verifier negatively painted the image of the company.
One of the researchers established the challenge with which it was when it came to engaging the
companies in an independent verification. As they made remarks, “There tends to be quite little
point in the case when consultant ants have focused interest in the improvement of your system.”
User sceptical
Evidence of sceptics among the users in New Zealand was established from the responses that
they have to the question on why they felt and thought that the companies would only issues
stand-alone environmental reports. Following the World Industry Council for the Environment,

currently known as the World Business Council for Sustainable Development, numerous benefits
are outlined with regard to environmental reporting. As shown in the figure below, most of the
user s looks at environmental reports as legally binding exercises that aim at improving the
image and pre-empting legislation. Just a minority of the users perceived such reports as being
certain evidence of a real corporate commitment to the environment (Kauffmann, Less &
Teichmann 2012).
It would thus be foolhardy of companies to ignore such perceptions as they were derived from
the very people identified by the companies as their target for the reporting. Still, such cynic also
appears to be rarely out of space when it was proposed that the provision of regulators with
information offers a wider appreciation of activities way beyond the legal requirements (Ameer
& Othman 2012). This meant that the more it was possible to understand someone’s enterprise, it
easier it was when it comes to influencing the debate in an individual’s sector.
In the absence of independent verification alongside detailed self-level data or may be even
independent verification, it would be a bit of a challenge to shake off external stakeholder
scepticism among the companies.

Why Most of the New Zealand Companies are not Reporting
Concern has been raised over the poor development when it comes to environmental reporting in
New Zealand. From the findings, most of the reasons could easily be cantered about a lack of a
property established management expertise and systems that are needed in the production of the
relevant data, the accompanying cost implications or even a perception of lack of demand from
most of the stakeholder (Lodhia & Martin 2011).
As illustrated in the figure below, lack of expertise in management alongside systems offer very
little evident barrier to environmental reporting. To some slightly surprising turn of events, there
tends to limited if any implications and hence importance of costs (Silva et al. 2012). Such
appear to be factors only when concern and attention is given to targets and information on
achievements. Suggestions from most of the companies are associated with lack of demand from
the various stakeholders as the main reason when it comes to driving the decisions on whether to
disclose or note.
There is however not clarifying if the lack of stakeholder demand is an issue that has
exhaustively been measured and evaluated or otherwise just pegged on assumptions. Most of the
companies provided in their open responses that they had in a way or another sought the
response from the readers of their yearly reports with regard to the environmental content and
most of the readers happened to be seemingly uninterested in stand-alone environmental reports.
Numerous others reported that the regulations and provisions of the Resource Management Act
were enough to establish accountability via the consent process and via making regular reports to
the local authorities (Moroney, Windsor & Aw 2012). The interested stakeholder was able to get

access to the environmental perforce matters through checking on the records of the local
authority.
There was no crystal clarity whether the external stakeholder shared similar portions as chances
are that they may as well be well to go will the prevailing arrangements. Still, chances are that
they might be ignorant of the possibilities and/or initiatives of distrust corporate environmental
reporting.
CHAPTER 3: RESEARCH METHODOLOGY
Introduction
This chapter provides a review on the methods that will be used the collection of data that is
needed in achieving the aims and objectives of this research. There are different methods and
methodologies of research presented in literature and choosing on a research method should be
determined by the anticipated achievements of the study not forgetting the limiting factors
identified in the study. There are two broadly known and used research types: qualitative
research and qualitative research.
While qualitative research is more of explorative, quantitative research finds its applications
mainly in the quantification in which there is generation of numerical data or any type of data
that is changeable into statics (Dagan and Gordon 1996). Qualitative research is applicable in
offering insights into the underlying factors, arguments alongside opinions on an identified
research statement or problem. Through qualitative research, an elaborate comprehension into
the research questions are offered besides helping in ideas or hypothesis development that have
the potential to be used quantitative research. Qualitative research can also be applied in the
determination of the trends in the views and ideologies and offering more insight into a research

problem. focus groups, observations or participation and individual interviews are the most
common methods used in qualitative data analysis.
Research Methodology
Following the nature of this study and the research question which is to investigate the
environmental disclosure related to emission of energy companies in New Zealand, both
quantitative research analysis and qualitative research analysis will be used in making the
findings. Qualitative analysis will be useful for the narrative information on emission and
energy of the sample companies in the annual reports while quantitative will be used in the
analysis of the figures on emission and energy (Dagan and Gordon 1996). Quantitative research
is used in the quantification of behaviours, opinions, attitudes and any other defined variables
and the generalized result is provided form a large population sample. This method makes use of
measurable data in the formula of the facts and unfolding of the patterns in the research.
Quantitative methods of data collection are structured more than qualitative methods of data
collection and come in various forms such as surveys, longitudinal studies, systematic
observations, website interceptor as well as interviews.
Research Methods and Data Sources
The collected responses which will forms the collected information will be analyzed through the
various quantitative and qualitative methods of data analysis after representation using such
techniques as tables, graphs and histograms (Dagan and Gordon 1996). Data on statistical
measurements will be represented directly using the various statistics data representation
techniques while non-statistical data will be transformed into statistical forms which can be
presented using such techniques as tables. The data will then be analyzed using the tools and
techniques of statistical data analysis among them mean, mode and standard variation.

Computers and other programmable software will be used to help with the simplification of the
computation and analysis process.
Research methodology is associated with a deliberately chosen methodology that assures the
researcher to collect the required data or to adopt evaluation related to the subject of interest
through the utilization of various strategies. The proposed research aims at investigating the
environmental disclosure related to emission of energy companies in New Zealand. The setting
in place the objectives were done in order to aid in the attainment of the main aim of the
research. As a result it was of necessity to have an overview of the environmental disclosure
related to emission of energy companies in New Zealand.
It was of great importance to understand the main features of topic of research. Hence qualitative
research method together with the literature review and quantitative approaches were employed
for the research (Dagan and Gordon 1996). This research methodology is appropriate to carry out
this research because the literature reviews offer information that is detailed about the
environmental disclosure related to emission of energy companies in New Zealand.
This research methodology gives an overview of the preceding researches that have been carried
out in the field and at the same time gives a short description about environmental disclosure
related to emission of energy companies in New Zealand (Galani, Gravas & Stavropoulos 2012).
In short, the literature review that was conducted assists to find the research gap for the research
topic.

Advantages of Quantitative Research
 It is possible to avoid bias when the researcher maintain a distance from taking part on
the subjects and undertaking subjects they do not know
 The use of standard means make it possible to replicate the research, do an analysis and
make comparison between the research with those of similar studies
 Enables wider study which incorporates a large number of subjects and hence allowing
generalization of the results of the study
 Quantative research can permit greater objectivity and higher accuracy of the research.
The design of the quantative method is such that they are able to offer a summary of the
data which are in support of generalization regarding a phenomenon that is under study
Disadvantages of Quantative Research
 Quantative research tends to collect dataset that is on most cases narrower and at other
time superficial
 Offers limited results as they are just but numerical descriptions as opposed to elaborate
narrative and hence tend to offer less elaborate accepts with regard to human perception
 Quantative research is most case conducted in environments that are unnatural in a bid to
introduce a level of control. Such a level of control may not be necessarily applicable in
the real life situation
 The pre-set answers that are got from the set levels of control are not necessarily
reflective of the feeling of the people regarding a subject and in other cases may only be
the closest resemblance.
Rationale for Research Methodology
Suggested research is aimed at making use of case study evaluation as an ideal system to conduct
the research. Techniques of case study motivate a researcher to carefully evaluate the

information associated with a particular setting which is a categorical topographical territory
selected to be the study topic. Further, a case study investigation strategy enables a researcher to
select in order of priority information and demonstrate the dimensions of a suggested research
topic (Ieng Chu, Chatterjee & Brown 2012). For the provided project on research it is
appropriate as the investigation environmental disclosure related to emission of energy
companies in New Zealand. Further, the case studies are set to determine the up to date natural
experience. By considering the above aspects the research proposed undertakes the case study as
the research strategy, which permits the researcher to accommodate this advanced practice on a
building confined to a specific topographical area.
The proposed research will be conducted with both qualitative and quantitative approaches. In
quantitative approach the authentic information is gathered from research executed previously
executed beforehand from the auxiliary sources. In qualitative approach the exploration will
attempt examine on perspectives, encounters and suppositions of the people. In this manner, for
the given proposed research that is investigation of the environmental disclosure related to
emission of energy companies in New Zealand for a particular case study building, qualitative
and quantitative approaches will be appropriate for the research proposed (Trotman & Trotman.
2013). Qualitative analysis will be useful for the narrative information on emission and energy of
the sample companies in the annual reports while quantitative will be used in the analysis of the
figures on emission and energy.
CHAPTER 4: RESULTS AND DISCUSSION
Descriptive analysis
The table below represents the distribution of the disclosure score as well as highlighting the
increasing trend in voluntary carbon emission disclosures among companies in the New Zealand.

It is observed that 57 out of the 97 companies used in the study do not disclose information or
data that meets the requirements of the checklist criteria be it in the annual or environmental
reports. There are slight improvements in the report in the year 2007 in which 46 out of 99
companies which represent 46.46 per cent decide not to provide any information in relation to
climate change or carbon emissions (Trotman & Trotman. 2013). The trend is observed to further
decrease to 33% which 33 out of 100 companies provide no information on climate change.
From the findings of the data, it can be established that the degree of voluntary disclosure has
experienced an upward improvement over the time of the research. While the total number of the
score of carbon disclosure in 2006 were 151 which a mean of 1.56 per company, the number was
246, representing a mean of 2.49 per company. In the year 2008, the score was 416, representing
4.56 per company.
The percentage of the companies that offered information satisfactory of the check list items is
shown in table II. As can be observed from the table, for every one of the 18 items, there is an
increase in the percentage of disclosing companies over the three years’ time frame in which the
analysis was conducted. It is notable that the number of companies that are identifying and

recognising the risk imposed by climate change has doubled between 2006 in which the
percentage was 34.02 to 61.00 per cent in the year 2008 (Trotman & Trotman. 2013). More
companies are observed to be reporting more on the changes in the levels of emissions of carbon
with the values changing frim 12.37 per cent as recorded in 2006 to 34 per cent in the year 2008.
Still, the numbers of companies that are reporting strategies or plans to owner future emissions in
carbon are as well doubling framing 18.56 per cent to 35 per cent from 2006 to 2008. At the very
last is the disclosure of the details of carbon emission accountability by about one quarter which
is representative of 26 per cent of the companies in the year 2008 (Zeng et al. 2010). The number
is representative of about five times increase from 2006 at the time when the percentage of the
companies that disclosed details of the accountability of carbon emission ranged between 5 and 6
per cent.
A summary of the statists for each of the years is provided in table III alongside the paired t-test
results of the variations in the mean of 2006 and 2008. Also provided is the statistics of the
individual and total scores. Upon conducting t-test for the total score, a positive difference is
attained which is significantly varying from zero at the level of one per cent (Dagan and Gordon

1996). This illustrates that the total score of carbon disclosure has for over the time increased.
An increase is noted across all the categories and the mean score is observed to be increasing by
almost a factor of three between 2006 and 2008. Still, during the period, an increase in the
discussion regarding carbon emission was observed both domestically and globally as well as the
introduction of a compulsory reporting system.
From these findings, it can as well be argued that the international factors must as well have a
role to play in the stimulation of the increase in the disclosures of carbon emission during the
period of research.
Scores of carbon emission disclosures by various industries
This section deals with voluntary carbon disclosures by various companies that are in the
different industries. The table IV illustrates the change and levels in the mean disclosure slicers
for about ten industries from the period 2006 to 2007. Among the industries under GICS
classification include industrials, telecommunications, materials, IT, healthcare, transportations,
utilities, consumer staples and consumer discretionary. The IT industry recorded the highest
score in the year 2006 which was followed closely but the materials and transportation. On the

other hand, in the year 2007, transportation took the lead having the highest score and followed
by materials and IT and telecommunications (Andrew & Cortese 2011).
IT and telecommunications took the lead once again the year 2008 which was followed by
consumer staples and transportation. Taking a look at the results in an aggregate form, it can be
observed that most of the industries that recorded the higher scores on disclosure are the
industries that are emission intensive excluding financials, telecommunications and it and
consumer staples (Cho, Roberts & Patten 2010). For the case of industries that are non-emissive
yet recorded high disclosure scores, this can be attributed to the corporate features of each of the
individual member firms as imposed to the specific features of the industry.
More refined analyses are conducted in a bid to closely evaluate the impacts of the
characteristics of the industry on carbon reporting upon regulating the characteristics of the firm
(Prado-Lorenzo & Garcia-Sanchez 2010). The analyses are done using various methods of
regression as discussed in the preceding section. When the variations in the disclosure scores are
evaluated through the use of a paired t-test, there is a relatively significant increase that is
realized across the various industries among them consumer staples, consumer discretionary,
materials, industrials and financials.

Regression analysis for the disclosures of carbon emissions
A correlation matrix between the main variables in the study is shown in table V. there is a
significant association between the explanatory variables and the total score excluding the case
of ROA. As opposed to the anticipations of the research study, leverage indicates a positive sign
of correlation with the total score. This finding can be attributed to the relatively high correlation
bittern LEV and SIZ which is about 0.66.
The findings of the regression analyses for each of the three years on an individual basis as well
as in a pooled sample are shown in table VI (Griffin, Lont & Sun 2012). In th first regression
model, it can be observed that the corporate characteristic among them the levels of emission, the
size of the firm as well as the quality of the corporate governance are the main determinants of
the degree of carbon disclosures (Rankin, Windsor & Wahyuni 2011). The finding is in line with
the various hypotheses of the research. (Bowen 2000) suggests that the positive impacts that the
size of a firm has on its environmental responsiveness can as well be elaborated by the fact that
bigger firms tend to have additional resources hence making them able to make such disclosures.
Companies endowed with greater resources are able to effectively respond to the rise in the
environmental concern as additional discretionary resources can enhance the managers in finding
more appropriate options in environmental response concerns (Dong & Burritt 2010). For this
reason, the achieved positive result for the size of the firm could be indicative of large firms
taking part more actively in voluntary reporting of carbon emissions as they have greater

visibility and will as well be having access to more resources that are needed in the preparation
of comprehensive disclosures.
ROA and LEV, which are two proxies, illustrate the projected signs of correlation even though
their coefficients are not significant in statistical terms. Both the two year dummies illustrate
positive results that are relatively different from zero. More specifically is the coefficient of
Y2008 which is almost tripled in comparison with the Y2007 illustrating a strong increase in the
entire scores of carbon disclosure in the finical year of 2008 (Hassan & Ibrahim 2012). From
such results it can be deduced that the passage of the pending legislation on disclosure might
have led to a rise in the voluntary disclosures of carbon emissions despite the NGER Act which
was not yet in operation at the time.
There is also a positive correlation between firms in industries that are emission intensive and the
scores of carbon disclosure. The significant role of the characteristics of the industry in the
determination of voluntary environmental reporting has been elaborated and reported through
different studies among them (Dagan and Gordon 1996).

Conclusion
This study does an analysis of the environmental disclosure of energy companies in New
Zealand in which a number of companies are studied between the year 2006 and 2008. The
regression models used in the study illustrate that the level of emissions of carbon, the size of the
firm as well as the quality of corporate governance are the main drivers that are used in the
determination of the degrees of voluntary carbon emission disclosures. The findings in this study
are not immune to limitations. The measure of the disclosure of carbon emission was done on
just 18 individual items. In as much as the 18 items considered were perceived to be consistent
with voluntary carbon emission disclosures, there are factors that were likely left out of the study
and thus not taken into consideration. Still, weight variables have not been palled in the study.
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