Corporate environmental reporting practices: Where does Finland stand?

Julkaistu 11.06.2018.

Industrial activities are directly responsible for incidents that put the natural environment under threat (Jones, 2010). For instance, the Exxon Valdez oil spill in Alaska in 1989, Chernobyl disaster in 1986 and Bhopal gas tragedy in 1984 are some of the incidents that brought about severe environmental degradation.

The environmental threats that could be caused by industrial activities include but are not limited to global warming, diminishing of biodiversity and global water crisis. These environmental threats are not confined to certain geographical boundaries. They can equally affect any part and any nation of the world.

Consequently, Finland is also exposed to all kinds of environmental risks. For example, the climate of Finland is going through changes. The climate of Finland is warming at a faster rate; within last hundred years, the average temperature of Finland has increased by one degree Celsius whereas the global average temperature has increased by 0.850C. The effects of changes in the climate are clearly visible in Finland. The risk of extinction of many Finnish species, probability of early break-up of ice of different water bodies (e.g., rivers, lakes and sea) and probability of forest fires are only a few of the consequences of the climate change in Finland.

Since industrial activities contribute directly to environmental degradation, corporations across the globe should have the environmental management system as an integral part of their business (Sahay, 2004). Corporations play a role in changing the natural environment and the public awareness of this role of corporations is increasing.

Consequently, various stakeholders are pressuring companies to assume more responsibility for the impacts that their activities have on the environment (Braam et al., 2016; Sahay, 2004) and to be more responsible towards sustainable development (Braam et al., 2016). These stakeholders are also demanding for increased information transparency regarding environmental concerns (Meng et al., 2014). By going through a process called corporate environmental reporting, corporations can disclose environmental information to their stakeholders and can thereby meet their demand for environmental information transparency.

Corporate environmental reporting is a subset of corporate social and environmental reporting (Sahay, 2004). KPMG (2017) reports that the majority of the large companies across the globe have already embraced corporate social and environmental reporting practices. Vinnari and Laine (2013) draw attention to the gradual improvement in the general quality of the disclosures and comparability of the information reported. Vinnari and Laine (2013) suggest further that the rapid development of corporate social and environmental reporting practices have attracted research attention that led to the conduct of a wide range of studies in different parts of the world. But unfortunately, the research in the area of corporate environmental reporting in the context of Finland is scarce. My research will fill this void by addressing the research gaps in the field of environmental reporting in the Finnish context. This research will have implications for researchers, investors and policy makers.

Probal Dutta
Doctoral Student in Accounting
School of Accounting and Finance
University of Vaasa, Finland

 

 

 

References

Braam, G. J. M., Weerd, L. U. de, Hauck, M. & Huijbregts, M. A. J. 2016. Determinants of corporate environmental reporting: the importance of environmental performance and assurance. Journal of Cleaner Production, 129: 724-734.

Jones, M. J. 2010. Accounting for the environment: Towards a theoretical perspective for environmental accounting and reporting. Accounting Forum, 34: 123-138.

KPMG. 2017. The KPMG Survey of Corporate Responsibility Reporting 2017.

Meng, X. H., Zeng, S. X., Shi, J. J., Qi, G. Y. & Zhang, Z. B. 2014. The relationship between corporate environmental performance and environmental disclosure: an empirical study in China. Journal of Environmental Management, 145: 357-367.

Sahay, A. 2004. Environmental reporting by Indian corporations. Corporate Social Responsibility and Environmental Management, 11: 12-22.

Vinnari, E. & Laine, M. 2013. Just a passing fad? The diffusion and decline of environmental reporting in the Finnish water sector. Accounting, Auditing & Accountability Journal, 26 (7): 1107-1134.

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Päivitetty 12.06.2018 - Verkkotoimitus
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