DISEÑO DE LA ESTRUCTURA PARA EL SOPORTE DEL

Table 4.2 provides the descriptive statistics for all variables used in the analyses, while Table 4.3 provides the correlations between these variables.

Table 4.2 Descriptive statistics

Variable Observation Median Mean S.D. Min Max

ES 617 49.00 54.38 23.85 11.10 124.39 E 619 19.51 22.02 13.53 2.33 63.57 S 627 28.07 32.10 12.87 4.69 70.18 ESt-1 380 51.12 55.91 24.33 11.90 124.39 Et-1 381 20.93 22.72 13.76 2.33 62.79 St-1 388 28.07 32.84 13.16 4.69 70.18 Slack 607 6.07 6.20 1.53 2.21 11.11 ROS 622 0.12 0.15 0.27 -1.28 5.42 ROE 600 0.17 0.24 0.46 -1.10 5.02 ROSt-1 620 0.13 0.16 0.28 -1.93 5.42 ROEt-1 605 0.19 0.26 0.43 -2.41 4.71 Size_emp 622 9.34 9.29 1.62 2.56 13.30 Leverage 627 0.23 0.25 0.19 0 1.33 Fin_acts 627 0.002 0.02 0.07 -0.01 0.85 Str_holds 629 0.16 0.20 0.17 0 0.83 Media 629 1.39 1.61 1.53 0 6.53

Notes: ES denotes the sum of environmental and social disclosure scores; E denotes environmental disclosure; S denotes social disclosure; ESt-1, Et-1 and St-1 refer to one year lagged ES, E and S score respectively; Slack is measured as the natural logarithm of the sum of cash & short term investment and total receivables; ROS denotes the ratio of earnings before interest and taxes to net sales; ROE denotes the ratio of net income before preferred dividends minus preferred dividend requirement to last year's common equity; ROSt-1 and ROEt-1 refer to one year lagged ROS and ROE; Size_emp denotes firm size and is measured as the natural logarithm of employee number; Leverage is defined as the ratio of total debt to total assets; Fin_acts is defined as financial activities and measured as the ratio of net proceeds from sale/issue of common and/or preferred stock during the year to total assets at the beginning of the year; Str_holds refers to strategic shareholdings and is measured as the percentage of total shares in issue held strategically and not available to ordinary shareholders (holdings of 5% or more are counted as strategic); Media denotes media exposure and is measured as the natural logarithm of the number of environmental news exposed by media plus one.

Table 4.2 shows that the mean value of ES, i.e., the summed E and S scores, is 54% (about 56% for lagged ES score). The summed ES score is the simple summation of the individual E and S scores of the firms, and could be interpreted as the average aggregate E and S disclosure of the firm. As for the individual scores, S has an average score of 32%, and E of 22%. The mean values of lagged E and lagged S are 23% and 33% respectively. The average slack is 6.2, equivalent to the mean value of GBP 494 million. Average ROS

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and ROE are 15% and 24% respectively. The mean value of lagged ROS and lagged ROE are 16% and 26%. Average firm size is 9.29 (i.e., about 10851 employees). The average leverage is 25%. The mean values of strategic shareholdings and financial activities are 20% and 2% respectively (i.e., 20% of total shares in issue are held by strategic shareholders, and 2% of total assets are generated from sales or issue of common and/or preferred stock during the year). The mean of the log of media exposure is 1.6. In other words, the average number of environmental news to which a firm is exposed in one year is 5. All median values are very closed to mean values, which indicates that the sample is not affected by outliers. The median values are normally distributed. Full definition of variables used and their data sources are given in Appendix 3. Of note, the number of observations for each variable varies slightly, based on the availability of data for the variable.

The pair-wise correlation matrix is displayed in Table 4.3. Table 4.3 shows a high correlation among ES, E, and S score and their lagged values, which implies stickiness of E and S scores across years. In other words, it seems that once a firm sets a precedence of voluntary reporting in a particular area, it tends to continue doing so in subsequent periods (consistent with the costs of commitment argument). It is worth mentioning the relationship between profitability and environmental/social score. It can be seen that there is a positive link between ROS and E score, while lagged ROS is positively correlated with E, ES and lagged E scores. Although there is no significant link between profitability and social score, the sign with respect to this relationship is positive. As mentioned in the section 4.3.2 ‘measurement of variable’, there is moderately high correlation between firm size and slack (0.65) as well as between firm size and media exposure (0.67). Hence, I performed variance inflation factor (VIF) checks for all regression analyses to ensure that there are no multicollinearity concerns, and all values of VIF tests are less than 10 (VIFs exceeding 10 are signs of serious multicollinearity requiring correction).

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Table 4.3 Pair-wise correlation matrix

Notes: : ES denotes the sum of environmental and social disclosure scores; E denotes environmental disclosure; S denotes social disclosure; ESt-1, Et-1 and St-1 refer to one year lagged ES, E and S score respectively; Slack is measured as the natural logarithm of the sum of cash & short term investment and total receivables; ROS denotes the ratio of earnings before interest and taxes to net sales; ROE denotes the ratio of net income before preferred dividends minus preferred dividend requirement to last year's common equity; ROSt-1 refers to one year lagged ROS; Size_emp denotes firm size and is measured as the natural logarithm of employee number; Leverage is defined as the ratio of total debt to total assets; Fin_acts is defined as financial activities and measured as the ratio of net proceeds from sale/issue of common and/or preferred stock during the year to total assets at the beginning of the year; Str_holds refers to strategic shareholdings and is measured as the percentage of total shares in issue held strategically and not available to ordinary shareholders (holdings of 5% or more are counted as strategic); Media denotes media exposure and is measured as the natural logarithm of the number of environmental news exposed by media plus one. *, **, *** indicates significance at the .10, .05, .01 levels respectively.

Variable (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) 1 ES 1.00 2 E 0.91*** 1.00 3 S 0.90*** 0.64*** 1.00 4 ESt-1 0.92*** 0.84*** 0.84*** 1.00 5 Et-1 0.83*** 0.88*** 0.62*** 0.91*** 1.00 6 St-1 0.85*** 0.63*** 0.91*** 0.90*** 0.64*** 1.00 7 Slack 0.60*** 0.52*** 0.56*** 0.64*** 0.57*** 0.59*** 1.00 8 ROS 0.05 0.07* 0.01 0.07 0.08 0.02 0.02 1.00 9 ROE 0.05 0.05 0.05 0.05 0.03 0.06 0.00 0.20*** 1.00 10 ROSt-1 0.10*** 0.12*** 0.05 0.08 0.10** 0.02 0.04 0.28*** 0.03 1.00 11 Size_emp 0.44*** 0.40*** 0.40*** 0.45*** 0.42*** 0.41*** 0.65*** -0.21*** 0.00 -0.20*** 1.00 12 Leverage 0.00 0.01 -0.01 0.03 0.02 0.01 -0.04 0.01 0.14*** 0.06 0.12*** 1.00 13 Fin_acts 0.01 0.02 0.00 -0.01 0.00 -0.01 -0.02 -0.03 -0.06 0.02 -0.08** -0.08* 1.00 14 Str_holds -0.26*** -0.28*** -0.18*** -0.29*** -0.30*** -0.22*** -0.31*** 0.04 0.02 0.03 -0.22*** -0.08** -0.09** 1.00 15 Media 0.55*** 0.49*** 0.51*** 0.59*** 0.52*** 0.55*** 0.66*** 0.06 0.04 0.06 0.48*** 0.07* -0.02 -0.22*** 1.00

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