Red Dust - there she blows - an environmental incident, corporate disclosure and legitimacy theory

Purpose: Change in CSR in annual reports before and after a major environmental incident in 2006 is investigated.

Design/Methodology/Approach: Content analysis adopting words was undertaken (2004 to 2008) of annual reports of the ‘incident’ company and a sample of 130 ASX listed companies drawn from the mining industry.

Findings: The results indicate the quantity of disclosure increased over the period. The ‘incident’ company did respond by increasing disclosures after the ‘incident’ year. Disclosures for the sample from the mining industry increased disclosures significantly in the year of the incident.

Research: Limitations/implications This paper adds to the literature that considers social and environmental incidents in the context of legitimacy theory. The differential results suggest that further investigation is warranted in terms of sample size and in the context of internet reporting.

Originality/Value: This exploratory study adds to literature in CSR, the implications of incidents affecting the environment, addressing stakeholders and the relevance of legitimacy theory.