Environmental reporting for Australian corporations: An analysis of contemporary Australian and overseas environmental reporting practices

Environmental and Planning Law Journal

Volumn 13, Issue 2, 1996, Pages 120-132

  Deegan, Craig ^a  

^a UNIVERSITY OF NEW ENGLAND   (Australia)

Author keywords

[No Author keywords available]

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EID: 0344233718     PISSN: 0813300X     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (45)

1. This list of users is provided by Statement of Accounting Concept No 2, Objectives of General Purpose Financial Reporting released by the Australian Accounting Standards Board in August 1990.
2. C A Tilt, "The influence of external pressure groups on corporate social disclosure: some empirical influence" (1994)
3. (No 4) Accounting, Auditing and Accountability Journal 47-72.
4. Companies are required to follow applicable accounting standards issued by the Australian Accounting Standards Board (AASB). Such standards cover a number of diverse issues and can include numerous measurement and disclosure requirements.
5. Schedule 5 to the Corporations Law lists a large number of required disclosures. Schedule 5 does not provide measurement guidelines as these are typically included within the various accounting standards issued by the AASB.
6. The UIG was established in 1995 and is a self-regulatory mechanism of the Australian accounting profession under the auspices of the Australian Accounting Research Foundation. Releases of the UIG must not be in conflict with accounting standards issued by the AASB. The contents of the abstracts released by the UIG have mandatory status by way of a revised release of APSI Conformity with Accounting Standards and UIG Consensus Views. APSI is jointly released by The Institute of Chartered Accountants in Australia, and the Australian Society of Certified Practising Accountants and shall be followed by members of the accounting profession.
7. Contingent liabilities are obligations that will only arise upon the happening of a future event. For example, a pending decision in a legal case. An accounting exposure draft (EDG7) was recently released that proposes to incorporate Sched 5 disclosure into an AASB accounting standard. To avoid duplication, Sched 5 will be removed from the Corporations Regulations. The proposed standard is expected to apply to reporting periods ending on or after 31 December 1996.
8. C Deegan and B Gordon, "A study of the environmental disclosure practices of Australian corporations" (1996) Accounting and Business Research (forthcoming)
9. C Deegan and M Rankin, "Do Australian companies objectively report environmental news? An analysis of environmental disclosures by firms successfully prosecuted by the Environmental Protection Authority" (1996) Accounting, Auditing and Accountability Journal (forthcoming).
10. The signing of the Directors' Statement is considered to constitute the point at which the financial statements are completed.
11. One was the Premier's Award for Environmental Excellence in the Queensland Mining Industry for the Cannington Exploration Project, whilst the other was the Quarantine and Inspection Service Award to Industry for BHP's contribution to research in controlling potentially harmful organisms in ships' ballast water.
12. This definition is from Statement of Accounting Concept No 4, Definition and Recognition of the Elements of Financial Statements, which is an output of the Conceptual Framework Project jointly developed by the Australian Accounting Research Foundation and The Australian Accounting Standards Board.
13. C Deegan, "The Environment: An Accountants Dilemma" (1994) Vol 65, No 7 Charter 64-67.
14. "Free goods" are defined in the Penguin Dictionary of Economics as "Goods which are not relatively scarce, and therefore which do not have a price, eg fresh air, sea water".
15. R Repetto et al, Wasting Assets, National Resources in the National Income Accounts (World Resources Institute, Washington, 1989), p 2.
16. Institute of Directors, Stewards of the Earth: Environmental Policy for a Market Economy (London, 1992), p 3.
17. C Deegan and M Rankin, "Do Australian companies objectively report environmental news? An analysis of environmental disclosures by firms successfully prosecuted by the Environmental Protection Authority" (1996) Accounting, Auditing and Accountability Journal (forthcoming).
18. Positive environmental disclosures were broadly defined as "information which presents the company as operating in harmony with the environment". Negative disclosures on the other hand were broadly defined as disclosures "that present the company as operating to the detriment of the natural environment".
19. Environmental sensitivity was determined by use of a questionnaire administered to Australian environmental lobby groups in which office bearers were required to rate industries (on a 0 to 5 scale) on the basis of whether the industry had been made the focus of action as a result of its environmental activities.
20. C Deegan and M Rankin, "Do Australian companies objectively report environmental news? An analysis of environmental disclosures by firms successfully prosecuted by the Environmental Protection Authority" (1996) Accounting, Auditing and Accountability Journal (forthcoming).
21. R Gibson and J Guthrie, "Recent Environmental Disclosures in Annual Reports of Australian Public and Private Sector Organisations" (1995) 19 (No 2/3) Accounting Forum 111127.
22. KPMG, International Survey of Environmental Reporting, 1993, p 16.
23. This view is also reflected in a document released by the International Institute for Sustainable Development (1993). In their document, Coming Clean: Corporate Environmental Reporting they state that "some of the most effective report makers have been those that have been prepared to adopt a 'warts-and-alP approach. Those that have taken this path have found that stakeholders are much more likely to believe the good news where there is also a frank, detailed discussion of the remaining problems" (p 46).
24. United Nations Environmental Programme Industry and Environment, Technical Report No 24, Company Environmental Reporting: A Measure of the Progress of Business and Industry Towards Sustainable Development, 1994.
25. Coopers and Lybrand Consultants, Business and the Environment: An Executive Guide (Sydney, 1993), p 4.
26. Coopers and Lybrand Consultants, Business and the Environment: An Executive Guide (Sydney, 1993), p 4.
27. Coopers and Lybrand Consultants, Business and the Environment: An Executive Guide (Sydney, 1993), p 4.
28. Confederation of British Industry, Introducing environmental reporting: Guidelines for Business (CBI, London, 1994).
29. International Institute for Sustainable Development, Coming Clean: Corporate Environmental Reporting (London, 1993).
30. C Deegan and M Rankin, "Do Australian companies objectively report environmental news? An analysis of environmental disclosures by firms successfully prosecuted by the Environmental Protection Authority" (1996) Accounting, Auditing and Accountability Journal (forthcoming).
31. Ball reports in the Environmental Accountability Research Group Newsletter, University of Tasmania (June 1995, p 8) that "the number of organisations promoting ethical investments in Australia are few to date and have attracted few investors (less than AUD $5 per capita). The Australian Conservation Foundation, YWCA, the Over 50's Friendly Society and the Friends Provident Life Assurance Company are examples of organisations which offer these alternative investment products. In contrast ethical investment in the United States is big business, with per capita investment standing at around US $2,200 with the Mutual (pension) Funds being key players in the market".
32. KPMG, UK Environmental Reporting Survey, 1994.
33. KPMG, UK Environmental Reporting Survey, 1994.
34. KPMG, UK Environmental Reporting Survey, 1994.
35. KPMG, UK Environmental Reporting Survey, 1994.
36. Gray et al. Standards, Stakeholders and Sustainability: The Association s 1994 Environmental Reporting Awards (University of Dundee, 1994), p 7.
37. Forcing awareness of emissions through such schemes as the TRI may actually be beneficial to the companies themselves. As well as the benefits that may be associated with greater community acceptance of the company, emission or waste reduction campaigns can lead to significant savings. A good example here is 3M. M Jacobs, Macroeconomic Policies for a Sustainable Society (Environmental Economics Conference: Environmental Economics-Moving to Sustainability, National Convention Centre, Canberra, November 1993), p 8 states that between 1975 and 1990 3M's Pollution Prevention Pays (3P) Programme reduced air pollutants by 122,000 tons, water pollutants by 16,000 tons, solid waste by 400,000 tons and waste water by 1.6 billion gallons, and in doing so saved the company S482 million-while output expanded.
38. Confederation of British Industry, Introducing environmental reporting: Guidelines for Business (CBI, London, 1994).
39. KPMG, International Survey of Environmental Reporting, 1993.
40. Federation des Experts Comptables Europeens, FEE 1994 Investigation of Emerging Accounting Areas (Routledge, London, 1994), p 42.
41. As reported in Business Review Weekly, 3 July 1995, p 85.
42. In due course Australia will have a National Pollutant Inventory (NPI). Although the final model and date of implementation are yet to be determined it is expected that it will be similar to the US TRI system. To date, three principal reports have been issued by the Commonwealth Environment Protection Agency (CEPA). In February 1994 a Discussion Paper was issued prior to public workshops in June and July 1994. A second report was issued in October 1994 and a third in January 1995. Minter Ellison recently completed a consultancy on the NPI for CEPA in which six alternative NPI models were outlined. It is not expected that there will be a requirement that annual reports will be required to incorporate the information provided within the NPI submissions. Howfever, the NPI will provide a further source of environmental information for the public and this in itself may translate to a more balanced level of disclosure within Australian annual reports.
43. A English, Discussion paper: Developing the Management of Aboriginal Heritage in Protected Areas in New South Wales, unpublished report to the NSW NPWS (Sydney, 1995).
44. A English, Discussion paper: Developing the Management of Aboriginal Heritage in Protected Areas in New South Wales, unpublished report to the NSW NPWS (Sydney, 1995).
45. In considering the issue of costs to the environment, there has been some discussion about recognising "sustainable costs": J R Gray and J Bebbington, Can the Grey Men Go Green?, Discussion Paper, Centre for Social and Environmental Accounting Research (University of Dundee, 1994), p 7. As they state (p 15): "a more interesting and potentially more practicable approach might be the requirement of organisations to calculate and disclose sustainable costs. Sustainable cost can be defined as the amount an organisation must spend to put the biosphere at the end of the accounting period back into the state (or its equivalent) it was in at the beginning of the accounting period. Such a figure would be a notional one, and disclosed as a charge to a company's profit and loss account. Thus we would be presented with a broad estimate of the extent to which the accounting profits had been generated from a sustainable source... our estimates suggest that the sustainable cost calculations would produce the sort of answer which would demonstrate that no Western company had made a profit of any kind in the last 50 years or so. " The notion or idea of sustainable costs is all very well, but at present there is no clear way to determine them. Hopefully continued research will provide some guidance.