Legitimacy Motives for World Wide Web (www) Environmental Reporting: An Exploratory Study
into Present Practices in the Australian Minerals Industry
1
Legitimacy Motives for World Wide Web (WWW)
Environmental Reporting: An Exploratory Study into Present
Practices in the Australian Minerals Industry
Sumit K. Lodhia1
The Australian National University, Australia
Abstract This exploratory study expands current literature on corporate environmental reporting
by developing legitimacy theory further through its application to WWW environmental reporting.
The various motives for legitimacy; maintaining, gaining and repairing legitimacy are applied to
web based environmental reporting and it is suggested that in comparison to print media, the
WWW provides greater benefits to companies when they seek to gain or repair legitimacy. A
study into the use of the WWW by companies in the Australian Minerals Industry for
environmental disclosure is then undertaken. This enables insights into the use of the WWW in an
industry, which is environmentally sensitive and where environmental disclosure is essential in
order for companies to appear legitimate to various stakeholders.
The findings of this research indicate that while companies use the WWW to maintain their
legitimacy, there is limited use of the WWW for gaining or repairing legitimacy. This indicates
that the WWW is not “fully” utilized by companies for seeking legitimacy from stakeholders
through environmental disclosure. It is suggested that mandatory and voluntary initiatives are
needed to provide an impetus for web based environmental reporting. Moreover, future academic
research in this area requires specific methods to be developed to capture the dynamic nature of
information dissemination through the WWW.
Introduction
Literature suggests that the practice of corporate environmental reporting (CER) is rising in
global importance (Gray, 2001a, 2001b, Deegan, 2002). The common media that companies often
use for disclosing environmental information to their stakeholders include conventional print
media such as annual reports, environmental reports, news media, advertisements and brochures
(see for instance, Zehgal and Ahmed, 1990, Brown and Deegan, 1998, Tilt, 2001, Deegan et al,
2002, Lodhia, 2004). More recently, the World Wide Web (WWW) has also emerged as a medium
for corporate environmental disclosure (see for instance, UNEP 1999, 2001, ACCA, 2001).
Prior studies have suggested that companies that operate in industries that are environmentally
sensitive disclose environmental information in order to legitimise their existence to society (see
1
Acknowledgement : My appreciation is extended to Dr. Roger Burritt, Professor Shirley Gregor and Dr.
Richard Winter of ANU, and Dr. Geoff Frost of University of Sydney for their support towards this project.
The encouragement of the editor of this journal is also acknowledged. An earlier draft of this paper was
presented at the APIRA 2004 conference in Singapore.
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Lodhia / Journal of Accounting and Finance 4 (2005) 1~15
for example, Patten, 1992, Deegan and Gordon, 1996, Deegan and Rankin, 1996, Neu et al, 1998,
O’Donovan, 1999, 2002a, Deegan et al, 2002). Consequently, legitimacy theory is the most
comprehensive framework for studies on corporate environmental reporting (Deegan, 2002).
A majority of CER research has primarily focused on conventional print media, especially
annual reports, as a disclosure medium. Even though conventional print mechanisms are widely
utilised as media for environmental disclosure, these suffer from time lags for information
dissemination, a lack of accessibility and interaction with stakeholders, coupled with a limited
means of presenting and organizing information (Lodhia, 2004). Often, periodic information is not
sufficient for an organization when it seeks legitimacy from its stakeholders. A common example
is when an environmental incident occurs. During such a situation, a company cannot solely rely
on periodic reporting. A need arises for a medium for environmental disclosure that is timely,
accessible to stakeholders, allows succinct presentation and organization of information, and over
which the company has complete control 2 .Companies may also like to interact with key
stakeholders during such instances.
Information and communication technology, especially the phenomenal growth of the Internet,
has had a profound impact on corporate acitivty (see for instance Thornburg, 1995, De Maeyer,
1997, Doost, 1999, Shepherd et al, 2001). For instance, the Internet provides numerous benefits to
companies which include convenience, better visual presentations, faster communication and
interaction (see for example, Lodhia, 2004). The World Wide Web (WWW) protocol of the
Internet is already being used for financial reporting (see for instance, Lymer, 1997, Ashbaugh et
al., 1999, Craven and Marston, 1999, Gowthrope and Amat, 1999, Lymer et al, 1999, FASB,
2000). There is also some evidence of disclosure of environmental information on corporate
websites (see for instance, Jones et al, 1998, 1999, Williams and Pei, 2000, Adams and
Frost,2004).
Research Problem, Justification and Scope
In light of the preceding discussion, this research establishes the potential that the WWW
offers to an organization for disclosing environmental information to its stakeholders. It is
suggested that the dynamic nature of the WWW can allow organizations to enhance their attempts
to legitimise their environmental position to stakeholders through environmental reporting.
Following from this, the extent to which companies in a particular environmentally sensitive
industry in Australia, the Australian minerals industry, use the WWW for environmental reporting
in order to legitimise their existence to their stakeholders is investigated.
The focus on Australian companies is prompted by the various local developments in
mandatory and voluntary initiatives towards environmental reporting. These include for instance,
mandatory initiatives such as the requirement by corporation’s law for companies to disclose their
environmental performance as well as the maintenance of a national pollutant inventory (NPI)
whereby companies are required to disclose their emission levels. Voluntary initiatives include the
signing of a greenhouse challenge agreement by companies with an intention to reduce greenhouse
2
Companies could use media releases during such situations but these are often limited in scope and do not
lie within the control of the organization.
Legitimacy Motives for World Wide Web (www) Environmental Reporting: An Exploratory Study
into Present Practices in the Australian Minerals Industry
3
emissions3, as well as the public environmental reporting (PER) initiative where companies are
encouraged to prepare environmental reports and provide these to Environment Australia (see
Burritt, 2002a, 2002b). Initiatives such as NPI and PER involve electronic presentation of
information; NPI data and public environmental reports are available on the NPI and Environment
Australia websites. Thus, environmental reporting in Australia is subject to mandatory and
voluntary pressures, and does require the use of the WWW in some instances, making it an ideal
context for this study.
The Australian minerals industry is selected for analysis because companies in this industry
have extensive environmental impacts as a result of their operations. Accordingly, these
companies are subjected to close scrutiny from their stakeholders and quite often need to disclose
environmental information to them in order to legitimise their existence (see for instance, Frost,
1999).
Companies associated with the industry association for the Australian minerals industry, the
Minerals Council of Australia, have signed a voluntary code for environmental management,
which requires them to improve their environmental performance and report these through various
media (Minerals Council of Australia website) 4 . Past research has also indicated that such
companies are the leaders in environmental reporting (Christopher et al, 1998, Peck and Sinding,
2003). The emphasis in this paper is only on companies associated with the Minerals Council of
Australia because these are expected to disclose environmental information to their stakeholders
extensively in order to legitimise their existence to them.
The rest of this paper is structured as follows. The next section discusses legitimacy theory,
followed by its application to web based environmental reporting. A research design is developed
for undertaking the study and details on the collection of data are explained subsequently. The
penultimate section discusses the findings of this research, and the final section provides
appropriate conclusions.
Legitimacy Theory
Legitimacy theory suggests that organizations will undertake activities to manage their
environmental impacts in order to legitimise their existence to stakeholders. The theory is based on
the notion of organizational legitimacy, which is described by Dowling and Pfeffer (1975, p. 2) as:
“a condition or status which exists when an entity’s value system is congruent with the value system
of the larger social system of which the entity is a part. When a disparity, actual or potential, exists
between the two value systems, there is a threat to the entity’s legitimacy”.
This threat is referred to as a legitimacy gap (Shocker and Sethi, 1978, Lindblom, 1994) and
organizations need to undertake actions to reduce this gap in order to survive.
The degree of legitimacy will vary between organizations (Dowling and Pfeffer, 1975,
Lindblom, 1984, Oliver, 1991). Those organizations which are more visible to their external
3
Companies could report their reduction in greenhouse emissions. Currently, they only report to the
Greenhouse office.
4
http://www.minerals.org.au/
4
Lodhia / Journal of Accounting and Finance 4 (2005) 1~15
constituents and those who rely extensively on their social and political support will require a
greater level of legitimacy (Ibid). More specifically in the environmental context, environmentally
sensitive industries will require a greater level of legitimacy from their stakeholders than those
companies that are operating in industries that have stable environmental conditions. Thus, this
paper focuses on companies in an environmentally sensitive industry (Australian minerals
industry), as their environmental impacts are highly visible to their stakeholders.
The activities that an organization undertakes in order to appear legitimate has to be
communicated to key stakeholders, referred to as conferring publics by O’Donovan (2002a,
2002b). It is in this regard that CER has emerged as a critical element of a company’s attempt to
manage its legitimacy relationships with its stakeholders.
Suchman (1995) associates the management of legitimacy to various motives. These include
the process of maintaining legitimacy, gaining/extending legitimacy, and repairing/defending
legitimacy. The motives of legitimacy can be applied to corporate environmental reporting.
The maintenance of legitimacy refers to the ongoing environmental reporting practice of an
organization, which is a means of preserving the legitimacy of the company in the eyes of external
stakeholders. On the other hand, an organization will report on specific issues in order to gain
legitimacy when it enters into an uncharted area. This could include for instance, communication
of issues such as its involvement in voluntary initiatives such as the code of environmental
management for the minerals industry or engagement in environmental collaborations with nongovernmental organizations. Moreover, repairing legitimacy will relate to instances when the
organization’s legitimacy is in doubt and constitutes all actions undertaken to address this
legitimacy gap. This could include for example, disclosure by the company in response to an
environmental incident. The maintenance of legitimacy is often an easier task than gaining or
repairing legitimacy, which basically differ in terms of one being proactive (gaining legitimacy)
and the other reactive (repairing legitimacy).
Early studies in CER have focussed merely on legitimacy theory at a general level without
relating environmental disclosure to specific legitimacy motives (see for instance, Patten, 1992,
Deegan and Gordon, 1996, Deegan and Rankin, 1996, Neu et al, 1998). Most of these studies have
often focused on the use of conventional print media for environmental disclosure as a means of
maintaining legitimacy (see Deegan and Gordon, 1996, Deegan and Rankin, 1996, Neu et al,
1998). While some studies have looked at the use of environmental disclosure for gaining or
repairing legitimacy (see Patten, 1992, Deegan and Rankin, 1996, Jantadej and Kent, 1999)5, these
have been restricted to periodic reporting through conventional print media.
Recent work by O’Donovan (2002a, 2002b) has utilised Suchman’s legitimacy motives to
broaden the legitimacy theory framework. This paper adds a further dimension to existing
literature on legitimacy theory by focusing on specific legitimacy motives associated with
environmental disclosure through the WWW.
5
These studies while focusing on the process of repairing legitimacy have not specifically used this term,
focusing on legitimacy theory at a general level.
Legitimacy Motives for World Wide Web (www) Environmental Reporting: An Exploratory Study
into Present Practices in the Australian Minerals Industry
5
WWW Environmental Reporting and Specific Legitimacy Motives
Companies can use the WWW in a similar manner to environmental disclosure through
conventional print media in order to maintain their legitimacy. This involves disclosing periodic
environmental information through the WWW. Companies can organise their environmental
disclosure by providing reports in Portable document format (PDF) form and having other
hyperlinked information. The visual tools provided by the WWW can be used to enhance the
presentation of environmental information, while the mass communication benefit of the WWW
will allow information to be accessible to numerous stakeholders.
The WWW offers greater potential for gaining and repairing legitimacy in relation to
environmental disclosure. Companies can report on specific environmental issues on a continuous
basis when gaining legitimacy such as for instance, environmental performance information, and
information on environmental impacts associated with the opening, ongoing operations or closure
of mines. They can also report on their adherence to mandatory and voluntary initiatives and the
progress made in relation to these, as well as provide information on environmental collaborations
with various parties. Even information on environmental excellence such as environmental awards
can be disclosed while press releases, presentations and speeches related to environmental issues
can be reported on the web for the purposes of gaining legitimacy.
Conversely, the WWW can be used to repair legitimacy when an environmental incident
occurs. Companies can use their website to disclose environmental information and provide their
account (as opposed to media reports) of the incident and the associated remedial actions being
undertaken. They can also engage with key stakeholders when repairing legitimacy (or gaining
legitimacy if they are proactive) by utilising the interactive capabilities of the WWW.
While the presentation, organization and accessibility benefits apply to all forms of reporting,
the timeliness and interactive capabilities offered by the WWW allow companies to provide on an
ongoing basis, information which is incremental to that found in periodic reports. Thus, the WWW
is quite useful to companies for gaining or repairing legitimacy, enabling a continuous and
interactive form of reporting.
Research Design
Having determined the potential of the WWW for environmental disclosure in relation to the
three legitimacy motives, a need arises to determine the extent to which companies are utilising the
WWW to disclose environmental information. The criteria that was used for analysing corporate
websites for environmental disclosure in relation to the three legitimacy motives is illustrated in
Figure 1.
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Lodhia / Journal of Accounting and Finance 4 (2005) 1~15
1. Maintaining legitimacy:
What approach is used to present the ongoing environmental information associated with the
company?
□ Piggy back – environmental and other reports merely replicated
□ Integrated – environmental and other reports plus additional information and features
□ Stand alone – No reports are available, website has limited information on environmental
issues
2. Gaining legitimacy
Are the following disclosed through the website, independently of the downloadable
environmental reports:
Mandatory Initiatives
□ National Pollutant Inventory (NPI) data
Voluntary Initiatives
□ Information on Greenhouse challenge
□ Public Environmental Reporting information in addition to that in environmental reports
□ Minerals Council of Australia Code of Environmental Management information
□ Information on environmental collaborations with non-governmental organizations or
other parties
□ Information on International Initiatives such as Global Reporting Initiative or Global
Mining Initiative
□ Other initiatives – specify
Other issues
□ Environmental performance information
□ Press releases related to environmental issues
□ Environmental information related to opening, ongoing operations or closure of mines
□ Environmental awards
□ Other issues related to gaining legitimacy – specify
3. Repairing Legitimacy
Does the company disclose information on
□ environmental incidents
□ other legitimacy threatening environmental issues – specify
Figure 1: Criteria for assessing environmental information content
The content of environmental information on corporate websites can be related to the three
legitimacy motives. In order to ascertain the type of environmental information that is disclosed on
the WWW in relation to maintenance of legitimacy, an attempt was made to investigate whether
such information is also available in print media. As suggested earlier, maintaining legitimacy
relates to the ongoing environmental information about a company and can be found in the form of
periodic reports. Thus, quite often, companies provide downloadable environmental reports on
websites to maintain their legitimacy.
Legitimacy Motives for World Wide Web (www) Environmental Reporting: An Exploratory Study
into Present Practices in the Australian Minerals Industry
7
ACCA (2001) states that three major methods are used for presenting social, environmental
and sustainable information through the WWW (see also Lymer et al, 1999 or FASB, 2000 for a
somewhat similar classification for web based financial reporting). These are namely the “piggyback”, integrated and stand-alone approaches. The piggy –back approach is merely the replication
of the paper based report in electronic form while the stand-alone mechanism involves complete
reporting solely through the WWW. Conversely, the integrated approach uses the piggy-back
approach but includes further features such as summarized reports, email and feedback facilities,
and live graphics (AACA, 2001, p.13).
This study modified these criteria for analysing the maintenance of legitimacy. The piggy back
and integrated classification have been retained but given the difficulty in assessing whether a
company is reporting exclusively through the web; the stand alone criterion was taken to include
limited use of the web for environmental reporting purposes. This includes basic information
available on the web such as environmental policies and environmental targets, but does not
include availability of downloadable reports.
Thus, an attempt was made to identify which of these approaches companies in the Australian
Minerals industry use rather than content analysing specific environmental disclosure on the web.
The later approach was not used, as there is a possibility of certain environmental disclosure being
provided in downloadable environmental reports. Content analysing this would be akin to studying
environmental disclosure in paper based reports.
Companies can also seek to gain legitimacy by providing information on their performance in
relation to mandatory and voluntary environmental reporting initiatives such as NPI, greenhouse
challenge, public environmental reporting, the code of environmental management of the minerals
council of Australia, international initiatives such as global reporting initiative and global mining
initiative, and environmental collaborations with non-governmental organizations or other parties.
They can report on specific environmental issues such as the environmental impacts associated
with the opening, ongoing operations and closure of mines, as well as environmental performance
information. Press releases and presentations can also replicated while information on
environmental awards can be provided. An attempt was made to investigate whether companies
disclose such information on the WWW. Furthermore, the issue of whether companies use the
WWW to repair their legitimacy was ascertained. This involved a study of disclosure of
environmental incidents or other legitimacy threatening issues.
Data Collection
A total of twenty-six companies were associated with the Australian Minerals Industry as at
November 2003. Not all of these companies are mining exploration companies. There is a law
firm, two accounting firms and several companies that provide mining based services such as
mining engineering and supply of specialised mining equipment. Furthermore, there were two
companies that are subsidiaries of other companies. One of the mining companies went into
receivership during the period of analysis and was eliminated from data collection. Thus, the
remaining companies’ websites (fourteen companies) were analysed over two different time
periods, July and November 6 (see Lodhia et al, 2004 for a similar approach in Internet based
6
Website analysis in these specific months is mainly coincidental. Emphasis was primarily in ascertaining
changes in environmental information over a period of time.
8
Lodhia / Journal of Accounting and Finance 4 (2005) 1~15
financial reporting). This was undertaken to ensure that any changes made to websites overtime
was taken into account. The details of the company websites that were analysed are provided in
Table 1.
Table 1: Company websites that were analysed
Company Name
Website address
Anglo Coal Australia Pty Ltd.
www.anglocoal.com.au
MNC
AngloGold Australia Ltd.
Barrick Gold of Australia
Ltd.
Iluka resources Ltd.
http://www.anglogold.com.au/default.asp
MNC
http://www.barrick.com/1_Global_Operations/
MNC
http://www.iluka.com/default.asp
Local
Newcrest Mining Ltd.
http://www.newcrest.com.au/
Local
Sons of Gwalia
http://www1.sog.com.au/
Local
Ticor Ltd.
http://www.ticor.com.au/home.htm
Local
Xtrata Coal Australia Pty Ltd.
Newmont Mining
Corporation
Placer Dome Asia Pacific
http://www.xstrata.com/
MNC
http://www.newmont.com.au/
MNC
http://www.placerdome.com/
MNC
Rio Tinto
http://www.riotinto.com/
MNC
Pasminco
http://www.pasminco.com.au/
Local
BHP Billiton Ltd.
http://www.bhpbilliton.com/bb/home/home.jsp
MNC
WMC Resources Ltd.
http://www.wmc.com/
Local
MNC/Local
As evident from Table 1, mining companies in Australia comprise multinational corporations
(MNCs) and local companies. There are 8 multinationals (approximately 57 % of companies)
while the rest are local companies. Only two MNCs have local (Australian) websites.
It was decided to spend about an hour analysing each website over a two week period in July
and November, 2003. Most stakeholders would not spend as much time on websites if information
was not easily available to them and hence, the time spent on analysing these websites was
considered to be sufficient.
Legitimacy Motives for World Wide Web (www) Environmental Reporting: An Exploratory Study
into Present Practices in the Australian Minerals Industry
9
Results
Overview
All companies whose websites were analysed have a separate section for environmental issues.
The titles for the environmental section of these websites can be classified into four categories;
environment (or environmental management), community and the environment, social (or
corporate) responsibility, and sustainability. This highlights that companies are attempting to
integrate environmental information with other social information.
The content of environmental information disclosed on websites by most MNCs is aggregated
and focuses on their entire global operations. In some cases, it is difficult to access Australian
specific information.
Maintaining Legitimacy
Results of the website analysis for maintenance of legitimacy are illustrated in Table 2. The
table clearly indicates that most of the companies in the Australian Minerals Industry are moving
beyond straightforward replication of Pdf reports to utilise the potential of the WWW for
environmental disclosure. These companies use hyperlinks and graphics to provide further
information than what would be found in print based reports and rely on the mass communication
feature of the WWW to make this information accessible to numerous stakeholders. There are only
three companies that make limited use of the WWW for environmental reporting purposes.
Table 2: Approaches towards environmental reporting through the WWW
by companies in the Australian Minerals Industry
Environmental reporting approach
No. of companies
Percentage
Integrated
11
79
Piggy back
2
14
Stand alone
1
7
Gaining Legitimacy
While companies seem to be utilising the WWW extensively for environmental disclosure in
order to maintain their legitimacy with their stakeholders, their use of the WWW for gaining
legitimacy is quite limited. Companies do not seem using the WWW extensively to report on a
continuous basis in relation to their environmental impacts.
Companies in the Australian Minerals Industry do not appear to use the WWW extensively to
report on the various environmental initiatives that they are engaged in. It should be noted that all
these companies need to report in relation to the national pollutant inventory and the minerals
council of Australia initiatives. However, the findings of the analysis suggests that companies are
reluctant to disclose this information through the WWW, even through disclosure through such a
10 Lodhia / Journal of Accounting and Finance 4 (2005) 1~15
medium would enable stakeholders to be aware of the organization’s commitment to
environmental sensitivity.
Table 3: The reporting of various environmental initiatives through the WWW
Initiative
No. of companies
involved
No. of companies
reporting via WWW
Percentage
NPI
Greenhouse challenge
All
6
3
3
21
50
PER
MCA code
MCEP
GMI
GRI
10
All
5
5
3
0
2
1
2
1
0
14
20
40
33
Similarly, even though the majority of the companies are involved in the public environmental
reporting initiative with Environment Australia, there is not a single company that mentions this
on its website or provides a link to their environmental reports on the public environmental
reporting website. Although limited companies are involved in local initiatives such as greenhouse
challenge and the mining certification evaluation project (MCEP) 7, or international approaches
such as global mining initiative (GMI) or global reporting initiative (GRI), most of these do not
seem to be reporting on these matters through their website. One of the multinational companies
however reports on the greenhouse gas protocol.
Companies seem to be reporting more extensively on specific environmental issues when
compared to reporting on various environmental initiatives. Even though such reporting is also
somewhat limited, it does suggest that companies are willing to provide specific environmental
information such as environmental performance. However, issues related to opening, closure or
ongoing operations of mines are quite limited.
Table 4: Reporting of specific environmental issues through the WWW
Issue
Environmental collaborations
7
No. of companies
reporting via WWW
3
Percentage
21
Environmental Performance Information
10
71
Press releases on environment
2
14
Speeches/ Presentations on Environment
2
14
Mine opening, operations and closure
4
29
Environmental Awards
5
36
Further details on MCEP can be found on http://www.minerals.csiro.au/sd/SD_MCEP.htm
Legitimacy Motives for World Wide Web (www) Environmental Reporting: An Exploratory Study 11
into Present Practices in the Australian Minerals Industry
There are two companies that provide press releases or presentations/speeches related to
environmental issues; only one of them includes these specifically on its environmental section.
Issues such as environmental collaborations and environmental awards are often contingent on
whether companies are actually engaged in such activities or whether they have received such
awards. This suggests that even though few companies are reporting on these issues, this is not a
general overview of the status quo.
There are other types of environmental information available that can be related to gaining
legitimacy. One company reports on tailings 8 management, another has a question and answer
section for environmental information while another has environmental information for schools.
There are two companies that provide details of employee involvement in environmental issues;
one mentions an environmental management induction program of employees while another has
interviews of environmental personnel.
These results indicate that some companies are slowly moving towards using the WWW
strategically in providing more extensive and regular environmental information to their
stakeholders. The web can play an instrumental role in a company’s pursuit in gaining legitimacy
and anecdotal evidence suggests that companies in the Australian Minerals Industry are utilizing
this technology, albeit on a small scale.
Repairing Legitimacy
There are only two companies that report on environmental incidents through the medium of
the WWW. One of these provides specific details on environmental incidents that have affected
the company over a period of time. The other focuses on only one major environmental incident
that affected the company several years ago and attempts to indicate that it has undertaken actions
to rectify the situation.
The analysis of websites suggests that limited companies are using the web to repair
legitimacy, as evident from the lack of information on environmental incidents. However, it is
clear that major incidents are reported, even though there may be a time lag between the
occurrence of the incident and its subsequent disclosure as in the instance of the major
multinational described previously. Some companies may on the other hand be reluctant to talk
about environmental incidents if these are not that significant, viewing such disclosure as
unnecessarily increasing public pressure rather than as a transparent reporting mechanism.
Discussion and Conclusion
This study was based on companies that are members of the Minerals Council of Australia, and
it is expected that such companies would be the leaders in relation to reporting of environmental
information. The research differs from conventional studies on environmental disclosure, because
it has considered the use of the WWW as a medium for environmental disclosure. It has also
sought to determine the extent to which companies in the Australian minerals industry disclose
environmental information according to the various legitimacy motives. Findings suggest that
8
Tailings are the waste products that remain after the mining operation has ceased..
12 Lodhia / Journal of Accounting and Finance 4 (2005) 1~15
while companies are increasing their use of the WWW for environmental disclosure, their motives
seem to be related to maintenance of legitimacy. Limited companies are using the WWW to gain
or repair their legitimacy.
The anecdotal evidence presented in this paper indicates that present practice of web reporting
of environmental information fails to utilise the potential of the WWW for continuous reporting.
This may be due to the fact that companies may be unaware of the potential that the WWW offers
for environmental reporting. Conversely, given the sensitive nature of environmental issues, they
may be reluctant to disclose environmental information on a continuous basis. Further research is
required to establish the reasoning behind the status quo of present practices in the Australian
Minerals Industry.
It is suggested in this study that even though companies are moving beyond straightforward
replication of hardcopy reports on websites, they need to be encouraged to use the WWW more
extensively to manage their legitimacy relationships with their stakeholders. By using the web to
report information on an ongoing basis, companies can improve their communication of
environmental information to stakeholders. They do not need to wait for “year end” to report such
information. The timeliness, presentation and organization, mass communication and interactivity
offered by the WWW (Lodhia, 2004) will allow companies not only to maintain their legitimacy
but also enable them to gain legitimacy for their environmental actions and assist in repairing
legitimacy if environmental incidents occur. Thus, the web is not merely restricted to ecommerce
related activities; it also provides benefits for corporate reporting. In essence, it provides a
different outlook altogether to reporting, continuos reporting can become the norm of the day.
This study has advanced literature on legitimacy theory by relating legitimacy motives to
WWW environmental disclosure. Thus, legitimacy theory is also useful for explaining
environmental disclosure in any medium but needs to be refined for study of disclosure on the
web.
This study has implications for the methods to be used for studies on WWW reporting. The
ability to update information on an almost instantaneous basis on the web highlights a need for a
different approach towards analysing disclosure on the WWW as opposed to content analysis of
disclosure in conventional print media. This research has studied environmental disclosure at two
different time periods, suggesting that analysis of websites differs from that of conventional print
media and requires a longitudinal approach. Whilst a more extensive analysis is beyond the scope
of this paper due to time constraints, future studies that could expand the present study by
analysing websites on a continuous basis over a longer period of time are envisaged. This would
provide a richer understanding of the use of the timeliness and interactive capabilities of the
WWW by companies to gain and/or repair legitimacy.
This study has also provided insights into WWW environmental reporting in a particular
industry, an issue that has been conspicuously absent from prior literature. Such a study enables an
in-depth and specific understanding of how the WWW is used in an environmentally sensitive
industry. Policy issues are also embedded in this study, suggesting a need for mandatory and
voluntary initiatives on WWW environmental reporting to encourage companies to undertake such
a practice on an ongoing basis. The benefits of the WWW for environmental reporting provides
companies with an improved mode of communication with stakeholders in relation to
environmental issues and could lead to an increasing need for them to legitimise their existence to
the society. Accordingly, regulators and industry associations such as the Minerals Council of
Australia have an important role in relation to the development of guidelines that could assist
Legitimacy Motives for World Wide Web (www) Environmental Reporting: An Exploratory Study 13
into Present Practices in the Australian Minerals Industry
companies in utilising the WWW to legitimise their environmental position to their numerous
stakeholders.
Future research should complement analysis of corporate websites with the more traditional
research methods such as surveys and interviews that could seek to gain further information on the
processes involved in WWW environmental reporting. For instance, the views of mining
practitioners and even stakeholders on web based environmental reporting can be obtained. The
use of the WWW by companies in other environmentally sensitive industries for legitimising their
environmental position to their stakeholders can also be studied and results can be compared to the
current study. These would provide a more comprehensive understanding of the findings of this
study, enabling a richer description of the different contexts in which the WWW is used for
environmental reporting.
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