Environmental disclosure by Australian mining companies: environmental conscience or commercial reality?

Over the past couple of decades there has been a series of literature in the social accounting field that indicates a gradual increase in the amount of social disclosure appearing in company annual reports. In particular, the amount of environmental disclosures appears to have increased and a number of theories have been postulated as to why companies disclose such information. Most of these prior studies have not identified the particular items that are being disclosed except to classify them broadly as ‘environment’ related and the majority of these studies have found that mining companies disclose more than other industries. Such results have then been used to support various theories as to why disclosure is on the increase, and in particular, to indicate a new ‘commitment’ to the environment by these companies. This is an Australian study that expands current research, and provides an alternative interpretation for environmental reporting by some corporations. It shows that a large proportion of ‘environmental’ disclosures by Australian mining companies are related to rehabilitation of mine sites—this disclosure may not be influenced by a desire to be environmentally conscious, but by a resultant tax benefit from including it in the annual accounts. The findings may have implications for other countries with a large extractive industry and similar tax provisions.