Assessing the Quality of Disclosure on Material Topics in Mandatory and Voluntary Reports: Study of the Oil and Gas, Exploration and Production Industry

Ouafaa Hmaddi

Assessing the Quality of Disclosure on Material Topics in Mandatory and Voluntary Reports: Study of the Oil and Gas, Exploration and Production Industry

Abstract

This study examines the quality of mandatory and voluntary disclosure with respect to itsThis study examines the quality of mandatory and voluntary disclosure with respect to its materiality to the “reasonable investor”. It evaluates the consistency between disclosures on ESG information and materiality according to SASB’s definition of materiality for a sample of 26 companies in the Oil & Gas industry. The focus of this analysis is on 11 material topics identified based on the SASB framework. For each identified material topic, the analysis focuses on the quality of disclosure based on the following classifications: no disclosure; boilerplate statement; qualitative disclosure or quantitative disclosure. The analysis also includes a discussion about the seriousness of reporting, depending on if the company discusses progress on disclosed material topics or not. This analysis provide evidence that boilerplate statement is the dominant form of regulated reporting. More importantly, it demonstrates that while voluntary reporting uses more quantitative and industry tailored language, the disclosure is selective in terms of what material topics. In addition to providing evidence on the practice of selective disclosure and quality of disclosure, the paper also highlights the low level of reporting on progress against the companies targets which is an important indicator of disclosure quality and seriousness. materiality to the “reasonable investor”. It evaluates the consistency between disclosures on ESG information and materiality according to SASB’s definition of materiality for a sample of 26 companies in the Oil & Gas industry. The focus of this analysis is on 11 material topics identified based on the SASB framework. For each identified material topic, the analysis focuses on the quality of disclosure based on the following classifications: no disclosure; boilerplate statement; qualitative disclosure or quantitative disclosure. The analysis also includes a discussion about the seriousness of reporting, depending on if the company discusses progress on disclosed material topics or not. This analysis provide evidence that boilerplate statement is the dominant form of regulated reporting. More importantly, it demonstrates that while voluntary reporting uses more quantitative and industry tailored language, the disclosure is selective in terms of what material topics. In addition to providing evidence on the practice of selective disclosure and quality of disclosure, the paper also highlights the low level of reporting on progress against the companies targets which is an important indicator of disclosure quality and seriousness.

Date Issued

2017-05

Keywords

Mandatory disclosure, Voluntary disclosure, CSR reporting, Materiality.

Degree Discipline

Public Administration

Degree Level

Master

Types

dissertation or thesis