Environmental performance, legislation and annual report disclosure: the case of acid rain and Falconbridge

This paper examines the relationship between environmental performance, legislation and annual report disclosure using the case of Falconbridge and sulphur dioxide emissions over a period from 1964 to 1991. Legitimacy theory and political economy theory are used to evaluate the disclosure. Two key questions are addressed: How did the corporation respond to changing government regulations for sulphur dioxide abatement? and How did the corporation choose to present these abatement activities in its annual reports? These questions are examined through the methodologies of historiography, interviews and content analysis. Falconbridge has always been in compliance with SO₂ regulations (albeit with a government extension in the late 1970s) and has consistently provided disclosure discussing the technological aspects of sulphur dioxide abatement. While political economy theory has explanatory power, legitimacy theory offers a more compelling explanation.