“Comply or Explain” if you do not disclose environmental accounting information: Does new French regulation work?

The objective of this chapter is to analyse the impact of France's ‘Grenelle 2' law of 2010, which applies to environmental accounting disclosures (EADs). More specifically, it seeks to observe whether the ‘Anglo-Saxon' ‘comply or explain' model, transposed into the French regulatory framework, influences the disclosure strategies of firms that are listed on a regulated market. Drawing on the theoretical framework of legitimacy and the concept of normativity, an empirical study is conducted on a sample of 96 French firms listed on the SBF index between 2009 and 2014. The effect of regulation is assessed by a content analysis of EAD in annual reports, examining changes in disclosure practices and the contents of disclosures. The main results show that explanations for the absence of EAD showed a significant increase after the introduction of the law. We also observe that the new rules had no effect on the number of firms making EADs, although the quality of the disclosures declined. Finally, the results also concern practices of non-disclosure without any accompanying explanation.The limitations of this study relate to the choices underlying the classifications and observations made during the content analysis.This study has social relevance in that it supplies information for assessing the transposition of European directives into French law. This study extends research concerning environmental disclosures by examining a recent accounting object. It also continues the debate on normativity, with its analysis of disclosures subject to a changing regulatory framework.