Internet-Based Environmental Reporting

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With the radical advancement of information technology and the great emphasis on the environmental consciousness, more companies are facing increasing pressure for releasing more information regarding environmental performance on the Internet. This study addresses that companies are responding differently to this increasing pressure as a result of their relative market position such as industry leader and followers.

Regarding Internet-based environmental reporting, this study speculates that industry leaders are more likely to use a standardized format and followers want to use a different format. To investigate how the information format can be used as a strategic variable in the context of Internet-based environmental reporting, we develop following two hypotheses and test them by analyzing contents of Fortune 500 companies' environmental reports posted on the Internet.

We first hypothesize that industry leaders are more proactive (proactive means that they accept more easily the Internet-based environmental reporting) than followers. This study points out that industry leaders usually have superior environmental technologies and want to take advantage of the current technologies as a key competitive advantage to other followers in their industries. Further, it is argued that the industry leaders will directly or indirectly force followers to participate in the ¡®game' named as ¡®Internet-based environmental reporting movement' driven by the leaders because the leaders have already had competitive advantages in terms of environmental performance.

Second, this study hypothesizes that followers are more likely to use different formats responding to the increasing pressure for environmental reporting on the Internet. In this study, we address how and why the followers can benefit from using different formats of environmental reporting on the Internet. Based on the previous studies on the relationship of product variants and price-comparison, we argue that using different format of reporting reduces the direct comparison of environmental performance by consumers, which causes followers to prefer to use different format of reporting instead of the standardized format suggested by a leader.

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