Why do shareholders require corporate environmental disclosure?

Abstract

We do a survey of individual shareholders' corporate environmental disclosure needs. We find that South African shareholders require companies to disclose the following specific environmental information:
•    Environmental risks and impacts,
•    Environmental policy,
•    Measurable environmental targets,
•    Performance against targets,
•    Environmental costs disclosed separately, and
•    An independent environmental audit report.
Shareholders prefer this information in a separate section of the annual report and on company websites. Shareholders want such disclosure to be prescribed by law and/or stock exchange rules. The most popular reason why they want environmental information disclosed, is to hold companies accountable for their environmental stewardship. A high percentage of shareholders also indicate that they want disclosure, because they are concerned about climate change. These findings imply that legislators and standard setters may have to consider changing disclosure laws and standards.