ABSTRACT With the growing pressure to consider environmental impact on business operations, accounting and disclosure of environmental matters have been rapidly emerging as an important dimension of corporate voluntary practices. The paper examines the differences of environmental disclosure practices between Malaysian and Australian public listed companies. This paper explores the international differences on environmental disclosure practices between Malaysia and Australia with regards to: 1. the state-of-the-art and 2. the factors influencing the environmental disclosure decisions of public listed companies. Empirical evidence is gathered through a content analysis of year 2002 and 2003 corporate annual reports of the top 50 Malaysian and Australian public listed companies. The findings indicated that Australian companies disclosed more and extensive environmental information compared to Malaysian companies. The factors that have some level of impact on environmental disclosure practices among Australian companies are financial performance and ISO 14001 certification, while ISO certification was found to be the sole factor for Malaysian environmental disclosure practice.
Keyword: Environmental disclosure; content analysis; annual report; Malaysia; Australia
Correspondence Details: Haslinda Yusoff School of Commerce University of South Australia Ph: + 61 8 8302 7042 (office) Fax: + 61 8 8302 0992 E-mail : Haslinda.Yusoff@postgrads.unisa.edu.au
INTERNATIONAL DIFFERENCES ON CORPORATE ENVIRONMENTAL DISCLOSURE PRACTICES: A COMPARISON BETWEEN MALAYSIA AND AUSTRALIA
1. INTRODUCTION The role of businesses in society is a complex and critical issue. Businesses’ role is critical given their operations and associated powers depend on society’s assent to their activities. Issues of accountability and environmental reporting of this paper contributes to the wider literature on corporate governance, accountability, transparency and responsibility in that it provides a way to think about the role of environmental accounting in developing economics. Or, if the concept of a developing economy is too nebulous, a comparison between Australia and Malaysia gives us some idea about the role of voluntary reporting in these two economics - given that both countries are committed to privatization and deregulation settings. The critical role of accounting becomes complex when corporations are the means to inform stakeholders on corporate social and environmental objectives. Accounting and reporting system is also challenged by various regulatory environment and globalization perspectives under multiplicity of social, political and cultural surroundings. Accordingly, corporations need to strive to aim for both economic and societal goals and this paper contributes to that literature by providing voluntary initiative scenario of nations under-studied compared to western developed territories (for example, Gray et al., 1995a; b; Brammer and Pavelin, 2004). Corporate social responsibility has grown to include environmental matters over the years as environmental issues such as environmental pollution and environmental litigations have become more prominent economic, social and political problems throughout the world. These have put force for corporations to engage into environmental responsibility including environmental accounting and reporting matters. As argued by Margolis and Walsh (2003): From society’s perspective, creating wealth and contributing to material wellbeing are essential corporate goals. But restoring and equipping human beings, as well as protecting and repairing the natural environment, are also essential objectives. Companies may be well designed to advance the first set of objectives, yet they operate in a world plagued by a host of...