Barriers to Environmental Reporting

Barriers to environmental reporting  

Measurement problem
KPMG (2005) argue that the measurement of social and environmental performance is rather a
complex task. Besides, it has been observed that there is difficulty in measuring environmental costs
and benefits objectively. Conventional accounting system allocates many of the green costs to general
overhead accounts and thus, some less tangible environmental costs remain hidden from management
(UNDSD, 2001). This problem is particularly due to the fact that to date, no specific accounting
standard has been developed to deal with environmental matters but there are provisions made such as
those in the IAS 37- Provisions, Contingent Liabilities and Contingent Assets that provide some
guidelines relating to the subject.  
Lack of consistency and comparability
There is actually no disclosure technique or proper standardisation of environmental reports and this
usually result in diverse reports from different corporations (Souther,1999). In other words, it
produces a lack of consistency and comparability. Such ‘lacuna’ has restricted the ability of the
stakeholders to use the information for decision making purposes (O’Rourke, 2004).
Expose to criticism  
Companies that publish environmental information are expected to face criticism which represents
potential cost in terms of public reactions to firms’ disclosures. Costs also seem to rise as reporting
becomes more thorough and comprehensive (O’Rourke, 2004). These costs generate considerable
incentives for organisations to release CR reports that are purely public relation tools or simply to
avoid reporting. In addition, firms may be unwilling to disclose environmental information if it is
confidential data which can be used by their competitors.
Lack of government policy on the issue  
Environmental reporting is basically a voluntary disclosure (Shivaji and Subramaniam, 2008).
Governments of different countries are trying to bring... [continues]

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