Usefulness of Environmental Reporting

Topics: Financial statements, Sustainability, Environmental law Pages: 19 (6156 words) Published: October 29, 2010
Vol. 3, No. 12

International Journal of Business and Management

Corporate Environmental Reporting: An EmergingIssue in the Corporate World Alok Kumar Pramanik Department of Commerce, Bhatter College P.O. – Dantan, Pin 721426, Dist. – Paschim Medinipur (West Bengal) Tel: 32-2925-3481 Email:

Nikhil Chandra Shil, ACMA (Corresponding Author) Department of Business Administration, East West University 43, Mohakhali C/A, Dhaka 1212, Bangladesh Tel: 18-1928-9589 (M) Email:

Bhagaban Das P.G. Department of Business Management, Fakir Mohan University P.O. – Balasore, Pin 756019, Orissa, India E-mail: Abstract

Corporate environmental reporting becomes a crucial issue in today’s corporate reporting. The present status and future focus gives every indication that it is going to capture a permanent position in the bundle of general-purpose financial statement. Because, the corporate reporting is for the stakeholders and every stakeholders show a keen interest on such disclosure. Protecting the environment is the social responsibility and commitment of corporations towards the society. It is believed that corporation is responsible for the environmental crisis and so they should pay for this (cost-benefit trade off). However, reporting is mostly guided by standards, guidelines etc. And, we do not have any standards designed for such disclosure. So, such reporting is still voluntary that has no specific format and style. Voluntary disclosure often leads to non-disclosure and mandatory disclosure leads to minimal disclosure. Thus, environmental disclosure should have both type of orientation, as it is a question of life and sustainability. The paper gives a conceptual discussion on corporate environmental reporting and guidelines. It also gives a literature review of current reporting practices to highlights the developments till date. And, this concludes that the level, extent and style of disclosure are not satisfactory at all in any respect. The professionals and respective regulatory authorities should come forward with stricter standards and guidelines to this issue that is the demand of time. Keywords: Corporate environmental reporting, Corporate environmental report, Environmental accounting, Financial reporting 1. Introduction

The awareness of the environment and man’s ability to cause damage started from the fifties of last Century. In 1972, a World Conference was held in Stockholm where heads of States from all over the world came together for the first time to consider the state of the Globe as a whole, which ultimately gave birth to a special UN Agency titled UN Environmental Program (UNEP) to deal with environmental issues. In the mid-eighties, on the basis of changing situation and becoming the environmental issues a worldwide phenomenon in the developed and the developing countries, World Commission on Environment and Development (WCED), known as Bruntland Commission was established by the UN. The Commission published a report called “Our Common Future”’ in 1987, with the proposed concept of ‘sustainable development’. This concept received worldwide acceptance and led to the convening of the UN Conference on Environment and Development (UNCED) in Rio de Janerio, Brazil in 1992, known as “EARTH SUMMIT”. In this conference, heads of different States signed four agreed document including the Agenda 21. The Agenda 21 contains a checklist of do’s and don’ts to protect the environment through the next Century. Particularly, the 146

International Journal of Business and Management

December, 2008

role of corporate entities in respect of overall management of the environment has been duly recognized in this conference. In recent years, adverse environmental effect of economic development has become a matter of great public concern all over the world. Gradually, environment is becoming a much more urgent economic, social and political problem....
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