SOCIAL AND ENVIRONMENTAL REPORTING

Report on Social and Environmental Reporting

Report on Social and Environmental Reporting

1.0 Introduction

The last few decades of the twentieth century have witnessed a remarkable growth in awareness of the significance of social and environmental reporting. Thousands of organisations including many of the largest are currently reporting their social and environmental information (Spence, 2007). For example, Gray and Milne (2008) noted that during 1993 fewer than 100 organisations worldwide disclosed their social and environmental information. However, by 2003, this number changed tremendously, and more than 1500. organisations reported their corporate social behaviour.

This tremendous increase in social and environmental reporting could be attributed to a number of different factors. For example, over the past 40 years, there has been an expansion in the strength and scope of awareness of and attention to the impact of businesses' operations and activities on the natural and social environment, which, in return, became a major concern to a wide range of groups in society such as customers, managers, academics, governments and other different members and groups in society (Antal, 2002).

Additionally, due to a growth in social problems such as poverty, unemployment, racial, sexual, religious discrimination and increase in pollution, there has been a noticeable increase of awareness in public about corporate social reporting (Boatright, 1993). This led many researches to argue that process of globalisation and bad business activities have been called responsible and major causes for a number of these social problems (Nissanke and Thorbecke, 2010). Therefore, many organisations found it essential to deflect this negative news and differentiate themselves from the worst polluters as being socially sensitive organisations responsible for their operations and outcomes in the society (Othman and Ameer, 2010).

According to Kay (2002), however, the concept of social and environmental reporting is not a new phenomenon, and such activities in the past were considered paternalistic and charitable. In addition, historically, the disclosure of social information can be traced to the early twentieth century, while the disclosure of environmental information began to emerge in 1960 (Guthrie & Parker, 1989).

In addition, the literature on management, corporate social responsibility was strongly supports more than 50 years researchers such as Bowen (1953), Friedman (1962) and Carroll (1979). This led to a number of theoretical approaches and research, to explain the importance of social and environmental reporting practices. These include the theory of legitimacy, stakeholder theory and institutional theory (Solomon, 2005).

It is also believed supporters of social and environmental reporting that its use will help a better way of corporate reporting, more stakeholder equity, and ultimately sustainable corporate activities and operations guided by the relevant development (Hess, 2008). Unlike the current situation does not seem to correspond to these beliefs. In fact, the worst pollutants, such as working in sensitive sectors such as oil and chemical industries, among those who disclose their social and environmental information, most (Niskanane and Nieminen, 2001).

However, in connection with this rapid growth in the disclosure of social and environmental disclosure, Gray (2006a) argues that there should be different cases that the ...