The descriptive statistics of the last two variables is shown for all the years together. See appendix 13.6 for the assigned scores for the disclosed environmental information for the 45 companies of the sample in the four different years. Table 3 and 4, on the next page, give a listing of the industries with the number of companies per industry, and a listing of the countries in the sample with the number of companies. Table 4 views the wide spread of the sample over different countries, some countries only occur one time. This is the reason why the control variable of country is excluded from the analysis. Descriptive Statistics N Minimum Maximum Mean Std. Deviation ED 2003 45 10 31 19,02 5,194 ED 2005 45 8 32 20,47 5,798 ED 2007 45 8 34 21,84 6,399 ED 2008 Size Leverage 45 359 358 10 4,72 0,12 34 14,60 1,09 22,60 10,19 0,63 6,088 1,854 0,188 Valid N (listwise) 45 Table 2: Descriptive statistics of used variables. Country Industry Frequency Percent Valid Basic Materials 6 13,3 Consumer Goods 9 20,0 Financials 5 11,1 Industrials 4 8,9 Oil and Gas 6 13,3 Telecommunication 4 8,9 Utilities 6 13,3 Consumer service 5 11,1 Total 45 100,0 Table 3: Industries in sample Frequency Percent Valid Austria 1 2,2 Denmark 1 2,2 Finland 4 8,9 France 4 8,9 Germany 3 6,7
disclosure and Return on Equity, however this relationship is not significant and has only a small influence. As last can be concluded that the assumption of no perfect collinearity is met, none of the variables have a perfect relationship of higher than 0,80. Analysis of regression This paragraph, with the help of table 7, provides the results from the multiple regressions analysis conducted to investigate the impact of prior environmental disclosure on subsequent financial performance. For the financial performance measures are the used the subsequent years; 2004, 2006, 2008 and 2009. The adjusted R square gives some idea of how well the models generalize (Field, 2005). The values for this variable differ from 0,2% to 30,8%, meaning that the explanatory power of the models differs between the six different financial measures, but still isn’t high. The coefficients of EDi for the different financial variables are -0,001, 0,002, -0,001, -0,004, and 0,000 respectively. These values indicate that as environmental disclosure volume increases with one unit, the ROA decreases with 0,001 unit. Only the values regarding the relationships of EDi with ROA and OPA are significant, meaning that these values for EDi are significant predictors for ROA and OPA for European companies. There can be concluded that he coefficients values for EDi are all relatively small, the relationship between the environmental disclosure volume and the financial performance are proposed to almost have no effect. As last can be concluded over the control variables that SIZEi is insignificantly positive related to all financial performance variables, except for Cash ROE whereby the SIZEi is insignificantly negatively related. From table 7 can also be concluded that the LEVi is negatively related to ROA, ROE, Cash ROA and OPE, for the other two financial performance variables is the relationship positive. Only the relationship between LEVi and ROE is significant. The industry variable INDi (CGs vs Financials) is negatively related for all, three of the six relationships are significant. This means that the financial variable of the companies in the financial industry is relatively poorer than companies in the consumer goods industry. The industry variable CGs vs Industrials is significantly positively related with ROE, further relationships are not significant. The industry telecommunications is positively and negatively related to the financial variables, whereby the results of ROA, Cash ROA, Cash ROE and OPA are significant. Also the INDi -
Waddock and Graves (1997) 8 Kinder, Lydenberg, Domini (KLD) measures (SA/P/O) ROA, ROE, and ROS CSP is positively related to subsequent financial performance, but also positively related to prior financial performance 469 firms (+) McGuire et.al. (1990) Fortune magazine rating: 'responsibility to community/environment' (R ) Stock returns, ROA Results show that CSP is more closely related to prior financial performance than to subsequent financial performance. 131 firms (+) Preston and O'Bannon (1997) Fortune magazine rating: 'responsibility to community/environment' (R ) ROA No significant negative social-financial performance relationships and strong positive correlations found. 67 firms (o) Spicer (1978) CEP ratings ROE and P/E ratio The results suggest a positive relationship between pollution disclosure and the financial performance. 17 firms (+) Kraft and Hage (1990) Community goals Net income and assets In both ways were community service goals were significantly correlated with profit goals, and the other way around. 82 firms (+) Aras et.al. (2009) Content analysis with 4 categories ROE, ROA and ROS Still after controlling for firm size, no significant relationship between CSR and financial performance is found. 40 firms (o) Scholtens (2008) Kinder, Lydenberg, Domini (KLD) measure (SA/P/O) ROA, assets growth and operating revenu Most important finding supports a positive and significant interaction between the financial and social performance. 289 firms (+) Author(s) and year Measure of social/ environmental disclosure Measure of CFP Outcome Sample Type of relationship
Shane and Spicer (1983) CEP reports on environmental performance Market based returns adjusted for risk The results are consistent with stakeholders using the released data to discriminate between firms with different pollution control performance records. 72 firms (+) Richardson and Welker (2001) Social disclosure (subsumes environmental disclosure) Cost of Capital Signifantly positive between disclosure and cost of capital, more profitable firms are penalized. (+) Freedman and Stagliano (1991) Annual reports disclosures, content analysis 4 categories Stock returns Companies with separate environmental reports provide more information voluntary. 52 firms (o) Moneva et. Al. (2000) Environmental and annual reports, 4 categories Stock returns No evidence that firms try to satisfy their stakeholders through environmental reporting 70 firms (o) Fiori et.al (2007) Analysis of CSR disclosure reports Stock price No significant relationship could be found (o) Montabon et.al. (2007) Content analysis of CSR disclosure reports ROI, sales growth Positive relationship between the two measurements. 230 firms (+) The G2 and G3 framework compared G2 G3 Materials Aspect: Materials EN1 Materials used EN1 Materials Used EN2 Use of waste material EN2 Use or Recycled input Energy Aspect: Energy EN3 Energy use EN3 Direct energy use EN4 Indirect energy use EN4 Indirect energy use EN17 Renewable/efficiency EN18 Product requirements EN19 Other indirect Energy EN5 Energy saved EN6 Product energy saved EN7 Reduce indirect energy Water Aspect: Water EN5 Water use EN8 Water withdrawal
16 Grupo Santander Spain Financials 17 Heineken N.V. Netherlands Consumer goods 18 Holcim Switzerland Industrials 19 Iberdrola Spain Utilities 20 Iberia Spain Consumer service 21 ING Group Netherlands Financials 22 Kesko Corporation Finland Consumer service 23 KPN Netherlands Telecommunications 24 Lafarge France Industrials 25 Nokia Finland Consumer goods 26 Novozymes Denmark Basic materials 27 Philips International B.V. Netherlands Consumer goods 28 Repsol YPF Spain Oil and Gas 29 Rio Tinto United Kingdom Basic materials 30 Royal Dutch Shell Netherlands Oil and Gas 31 SABMiller UK United Kingdom Consumer goods 32 Statoil Norway Oil and Gas 33 STMicroelectronics Switzerland Industrials 34 Stora Enso Finland Basic materials 35 The Go-Ahead Group United Kingdom Consumer service 36 Vattenfall Sweden Utilities 37 Vivendi Universal France Consumer service 38 Vodafone Group United Kingdom Telecommunications 39 Volvo Sweden Consumer goods 40 Wärtsilä Corporation Finland Utilities 41 Telecom Italia Italy Telecommunications 42 Hera Gruppo Italy Utilities 43 Verbund Austria Utilities 44 Endesa Spain Utilities 45 Oce Netherlands Consumer goods The variables Variable Abbreviation Calculation Environmental disclosure: Environmental disclosure score of company i EDi Hand collected from company's corporate sustainability reports Financial performance