Critical Thinking

Environmental of the reports (Marquis & Toffel, 2014).

Environmental
reporting has received increased a attention all over the world during the past
couple of decades, because the business entities have a responsibility to
comply with the environment in which it operates and the society has the right
to demand information of social resources. The recent incidents like meethotamulla,
rathupaswala water crisis has drawn the attention of the need on environmental
reporting for a developing country like Sri Lanka. Since environmental
reporting is largely voluntary and unregulated, there is no proper reporting framework
to adapt by the companies and therefore the decision usefulness of the
disclosures are doubtful.

As
a response to the mounting public pressure for the companies to be accountable
for their environmental performance, the firms have increased the volume and
scope of their environmental reports (Marquis & Toffel, 2014). Nevertheless
the number of environmental reports produced appears to have increased without the
regard to the users’ needs (Laud & Schepers, 2009). However it did not
satisfy the stakeholders demand for environmental information adequately and
the stakeholders have not influenced the content in the reports to match their
needs, an approach that has damaged the perceived relevance of the reports
(Marquis  & Toffel, 2014).

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

Based
on the existing literature only a few studies have conducted to identify the users’
information needs. European Commission, (2011) studies that employ
questionnaires to determine users’ need, it has found that financial stakeholders
do not read or even need environmental reports. In spite of this, studies that
used experimental methodology have identified that financial stakeholders do
use environmental information when making investment decisions when the
information is provided, confirming that they actually need such information (
Rikhardsson & Holm, 2005). De Villiers and Van Staden (2010b) investigated
the preferences of individual shareholders and found that 97 per cent of the
respondents required companies to provide a description of their major
environmental risks and impacts, where 94 per cent required the disclosure of a
company’s environmental policy, while 81 per cent required a disclosure of
actual performance against environmental targets. Furthermore, 80 per cent
requires disclosure of environmental costs by category, 78 per cent required a
disclosure of measurable targets based on environmental policy, whilst 75 per
cent required an independent audit of environmental disclosures. Further, it
was also noted that there is a dearth of studies have done to identify the users’
information preferences on environmental reporting in local context. Thus, this
study attempts to contribute to the extant local literature to fill the gap
observed. 

x

Hi!
I'm Simon!

Would you like to get a custom essay? How about receiving a customized one?

Check it out