标题: P1 ENVIRONMENTAL ACCOUNTING AND REPORTING (2) [打印本页] 作者: edgeon 时间: 2016-4-16 13:43 标题: P1 ENVIRONMENTAL ACCOUNTING AND REPORTING (2)
GUIDELINES FOR ENVIRONMENTAL REPORTING
In most countries, environmental reporting is entirely voluntary in terms of statute or listing rules. In effect, however, it has become difficult to resist for large companies concerned about their reputations, certainly in highly developed countries in which large companies experience high political visibility.
Because it is technically voluntary, companies can theoretically adopt any approach to environmental reporting that they like, but in practice, a number of voluntary
reporting frameworks have been adopted. The best known and most common of these is called the Global Reporting Initiative (or GRI).
The GRI is a reporting standard in that it prescribes and specifies how the company should report on a wide range of social and environmental issues. It arose from a number of organisations (some non-corporate) in the US seeking to enhance their reporting in the late 1990s. Its website describes itself in the following way:
The Global Reporting Initiative (GRI) is a non-profit organisation that promotes economic, environmental and social sustainability. GRI provides all companies and organisations with a comprehensive sustainability reporting framework that is widely used around the world.
As it evolved over time, the GRI became more influential, including in Europe and elsewhere, until many large companies adopted it as a framework for ensuring the breadth of their reporting categories. Some companies now openly say they report their voluntary information under GRI while others base their reporting on GRI guidelines without saying explicitly that they do so (perhaps wishing to adopt its provisions selectively).
WHERE DOES ENVIRONMENTAL REPORTING OCCUR?
Environmental reporting can occur in a range of media including in annual reports, in ‘stand alone’ reports, on company websites, in advertising or in promotional media. To some extent, there has been social and environmental information in annual reports for many years. In more recent times, however, many companies – and most large companies – have produced a ‘stand alone’ report dedicated just to environmental, and sometimes, social, issues. These are often expensive to produce, and contain varying levels of detail and information ‘quality’.
Companies use a range of names for these ‘stand alone’ reports. Often linked to the company’s marketing and public relations efforts, some companies include the word ‘sustainability’ in the title (perhaps ‘sustainability report’), others include a range of social measures in addition to the environmental information (such as jobs created, skill levels in the workforce, charitable initiatives, etc). Some companies employ a wording in the title intended to gain attention and stimulate interest. Barclays, the UK bank, refers to its ‘Citizenship report’, for example, and GlaxoSmithKline, the pharmaceuticals company, produces a ‘Corporate responsibility report’. Others combine environmental reporting with social and governance reporting to produce an ‘ESG’ (environment, social and governance) report.
ADVANTAGES AND PURPOSES OF ENVIRONMENTAL REPORTING
Because of the complex nature of business accountability, it is difficult to reduce the motivations for environmental reporting down to just a few main points. Different stakeholders can benefit from a company’s environmental reporting, however, and it
is capable of serving the information needs of a range of both internal and external stakeholders.
Some would argue that environmental reporting is a useful way in which reporting companies can help to discharge their accountabilities to society and to future generations (because the use of resources and the pollution of the environment can affect future generations). In addition, it may also serve to strengthen a company’s accountability to its shareholders. By providing more information to shareholders, the company’s is less able to conceal important information and this helps to reduce the agency gap between a company’s directors and its shareholders.
Academic research has shown that companies have successfully used environmental reporting to demonstrate their responsiveness to certain issues that may threaten the perception of their ethics, competence or both. Companies that are considered to have a high environmental impact, such as oil, gas and petrochemicals companies, are amongst the highest environmental disclosers. Several companies have used their environmental reporting to respond to specific challenges or concerns, and to inform stakeholders of how these concerns are being dealt with and addressed.
One example of this is the use of environmental reporting to gain, maintain or restore the perception of legitimacy. When a company commits an environmental error or is involved in a high profile incident, many stakeholders seek reassurance that the company has learned lessons from the incident and so can then resume engagement with the company. For the company, some environmental incidents can threaten its licence to operate or social contract. By using its environmental reporting to address concerns after an environmental incident, society’s perception of its legitimacy can be managed.
In addition to these arguments based on accountability and stakeholder responsiveness, there are also two specific ‘business case’ advantages. The first of these is that environmental reporting is capable of containing comment on a range of environmental risks. Many shareholders are concerned with the risks that face the companies they invest in and where environmental risks are potentially significant (such as travel companies, petrochemicals, etc) a detailed environmental report is a convenient place to disclose about the sources of these risks and the ways that they are being managed or mitigated.
The second is that it is thought that environmental reporting is a key measure for encouraging the internal efficiency of operations. This is because it is necessary to establish a range of technical measurement systems to collect and process some of the information that comprises the environmental report. These systems and the knowledge they generate could then have the potential to save costs and increase operational efficiency, including reducing waste in a production process.
In conclusion, then, environmental reporting has grown in recent years. Although voluntary in most countries, some guidelines such as the GRI have helped companies to frame their environmental reporting. It can take place in a range of media including
in ‘stand alone’ environmental reports, and there are a number of motivations and purposes for it including both accountability and ‘business case’ motives.
Written by a member of the Paper P1 examining team
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