The influence of the Portuguese environmental accounting standard on the environmental disclosures in the annual reports of large companies operating in Portugal: A first view (2002‐2004)

This paper seeks to empirically examine the influence of the new Portuguese environmental accounting standard on the environmental information disclosed in the annual reports by a sample of large firms operating in Portugal during the period 2002‐2004.

The method used is the content analysis technique by developing an index (which consists of the 16 environmentally‐related disclosure items) in order to assess the presence of the environmental disclosures and their breadth (number of items disclosed).

The results indicate that, in spite of the fact that the level of environmental information disclosed during the period 2002‐2004 is low, the extent of environmental disclosure has increased, as well as the number of Portuguese companies that disclose environmental information. The change in environmental disclosure behaviour between 2002 and 2004 is certainly consistent with the idea that the new accounting standard is starting to have an impact.

The study adds to the international research on environmental disclosure by providing empirical data from a country, Portugal, where empirical evidence is still relatively limited. Moreover, the study provides empirical support for the contentions of other authors that mandatory reporting guidelines affect corporate reporting practices.