Voluntary Disclosure of Environmental Performance

Abstract

Public and private differences have been a central topic in public administration research. This study explores electric utilities’ voluntary disclosure of environmental performance and examines if private (investor-owned) and public (government-owned) utilities have different drivers for voluntary disclosure. In particular, this study analyzes the panel data on electric utilities’ participation in the Department of Energy’s Voluntary Greenhouse Gas Registry program (VGGR) from 1995 to 2005 and attempts to explain the different participation patterns between public and private utilities based on two perspectives—public–private distinction and corporate environmentalism—which probes private firms’ voluntary environmental actions in particular. The findings show that private utilities tend to participate in the VGGR program when they have better performance, higher consumer interaction and market pressure, and also when they anticipate further regulations on greenhouse gas emissions. This is consistent with the existing theoretical and empirical studies on corporate environmentalism, which suggests private firms under intensive government regulation and market pressure actively use voluntary disclosure strategy to preempt future regulations and to gain economic benefit or legitimacy. On the other hand, it is found that public utilities tend to participate in the VGGR program when other related mandatory rules exist. This suggests that public utilities’ voluntary disclosure is primarily being driven by other mandatory requirements.