As firms’ economic activities are forced down by environmental pollution problem, the main objective of this study is to suggest a desirable direction to environmental management activities, from two core perspectives as follows; corporate environmental report and measuring the corporate environmental performance. This study consists of two major parts; one research theme is to propose a framework which assesses the quality of environmental information, and applies this to the real data disclosed in corporate environmental reports; the other research theme is related to the case study of four domestic leading companies with the conceptual model for case analysis.
In order to measure firms’ environmental performance, we suggest a framework called “Gscore” that consists of five categories, namely GEM (General Environmental Management), Input, Process, Output, and Outcome. Gscore is a proxy measure of corporate environmental performance based on voluntary Environment, Health, and Safety (EHS) report and is calculated by aggregating the points of the above 5-categories. We apply our measurement framework to the data of 39 firms’ voluntary EHS reports which are available on the internet. Ten of them, on which efficiency analysis was conducted with Gscore, assets, employee, and profits, are in petroleum & refining industry. According to our results: 1) A gap is found between rhetoric and practical environmental management stemming from calculating the relation between GEM and data part in 39 EHS reports. 2) On the whole, EHS reports of petroleum firms have something in common, but there are significant differences in the type and amounts of disclosed data among the EHS reports. 3) From the results of efficiency analysis, it is found that the number of employee exerts a considerable influence on determining the relative efficiency of petroleum firms, then Gscore, profits, and assets in sequence. Furthermore, Exxon, Ashland, Phillips Petroleum, and ARCO are shown to be efficient among 10 petroleum firms.
As regards to case study of domestic firms, we approach the four target firms with the new concept of ‘environmental report readiness’ that is central to the conceptual model. We divide ‘environmental report readiness’ into two sub-concepts as follows; ‘environmental contents readiness’ and ‘environmental information system readiness’, and endeavor to explore environmental activities of domestic firms with these concepts. According to the case study, there may be lots of similarities both in the scope of managed information and in the quality of internally managed reports, but the disclosure policies of each firm are different. However, on the whole, the conceptual model for case analysis seems to be inadequate for clarifying the obscure relation of theoretical concepts on environmental management. Noticeably, there is a gap in between internally managed environmental information and externally reported one; that is domestic firms are yet to be in reactive level. These facts show how leading international firms are different from domestic firms, and it is deeply considered that the lack of transparency over the whole society has taken effect behind such a situation.