Users’ corporate environmental information needs

Peter Nasiema Kamala,Christa Wingard,Christo Cronje

doi:10.4102/sajems.v19i4.1312

Abstract

Most listed South African companies appear to have embarked on environmental reporting without enquiring what the users’ needs are. If users’ needs are not determined prior to reporting, it is unlikely that the resulting reports will meet those needs. Using a questionnaire, this study investigated the environmental information needs of South African users of environmental reports. The study was deemed necessary to unveil users’ preferences which, if incorporated in reports, could enhance their perceived decisionusefulness, thus increasing readership. The results of the survey revealed that users need balanced environmental information that identifies and describes key, relevant issues and that is both specific and accurate. In addition, users need future-oriented information that identifies and addresses key stakeholders’ concerns, and which demonstrates the integration of environmental issues into core business processes. Furthermore the information should be summarised in an integrated annual report and posted on a company’s website. Based on its findings, this study recommends that standard setters and regulators should recognise that both financial and non-financial users need decision-useful environmental reports. Disclosure standards and regulations should therefore be amended to accommodate this reality.

Highlights

In response to the mounting public pressure for companies to account for their environmental performance, growing numbers have increased the volume and scope of their environmental reports (Jira & Toffel, 2013; Marquis & Toffel, 2014)
Given that the population of users as defined in the accounting conceptual framework could foreseeably include the entire South African population (GRI, 2008; IASB, 2008; FASB, 2010), this study focused only on user groups actively involved in 1) ethical investment, 2) environmental protection and 3) environmental reporting research
The respondents represented a broad cross-section of users, which did increase the likelihood that respondents of different persuasions had answered the questionnaire (De Villiers & Van Staden, 2010a), but was consistent with the broad definition of users in the accounting conceptual framework (FASB, 2010; IASB, 2010)

Summary

Introduction

In response to the mounting public pressure for companies to account for their environmental performance, growing numbers have increased the volume and scope of their environmental reports (Jira & Toffel, 2013; Marquis & Toffel, 2014). The number of environmental reports produced appears to have increased without regard to users’ needs (Laud & Schepers, 2009). The stakeholders have not influenced the content presented in the reports to suit their needs, an approach that has undermined the perceived relevance of the reports (Marquis & Toffel, 2014). The assurance engagements are typically determined by and undertaken for the companies' management, an approach that has undermined the perceived independence of the assurance providers (ACCA, 2009). Most companies’ environmental performance measurement systems are inept and error prone, given

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Conclusion