Environmental Reporting

Joseph Okon Written by Joseph Okon · 2 min read >

Environmental reporting: It could be narrative and a numerical info on the organization’s environmental footprint.

Narrative includes; objectives, reasons for not meeting previous targets, specific stakeholder concerns addressed etc.

Numerical includes; report on measures such as emissions in tones, resources consumed in liters, land used in square meters etc.

Ways of Reporting: as a part of annual report, a stand-alone report, on website, in advertising material

Why should a company report its footprints?

 Better accountability to stakeholders, can address specific challenges through these reports, society’s perception improves especially when environmental errors/accidents occur, it helps in environmental risk assessment, encourages internal efficiency in operations as a proper system for information communication and measurement will need to be created. In broad terms, environmental reporting is the production of narrative and numerical information on an organization’s\ environmental impact or ‘footprint’ for the accounting period under review. In most cases, narrative information can be used to convey objectives, explanations, aspirations, reasons for failure against previous years’ targets, management discussion, addressing specific stakeholder concerns, etc. Numerical disclosure can be used to report on those measures that can usefully and meaningfully be conveyed in that way, such as emission or pollution amounts (perhaps in tonnes or cubic metres), resources consumed (perhaps kWh, tonnes, liters), land use (in hectares, square metres, etc.) and similar. Guidelines for Environmental Reporting In most countries, environmental reporting is entirely voluntary in terms of statute or listing rules. Because it is technically voluntary, companies can theoretically adopt any approach to environmental reporting that they like, but in practice, a number of voluntary reporting frameworks have been adopted. The best known and most common of these is called the Global Reporting Initiative (or GRI).

Where does environmental reporting occur? Environmental reporting can occur in a range of media including in annual reports, in stand-alone reports, on company websites, in advertising or in promotional media. To some extent, there has been social and environmental information in annual reports for many years. In more recent times, however, many companies – and most large companies – have produced a ‘stand-alone’ report dedicated just to environmental, and sometimes, social, issues. These are often expensive to produce, and contain varying levels of detail and information ‘quality’. Advantages and Purposes of Environmental Reporting Environmental reporting is a useful way in which reporting companies can help to discharge their accountabilities to society and to future generations (because the use of resources and the pollution of the environment can affect future generations). In addition, it may also serve to strengthen a company’s accountability to its shareholders. By providing more information to shareholders, the company’s is less able to conceal important information and this helps to reduce the agency gap between a company’s directors and its shareholders. Academic research has shown that companies have successfully used environmental reporting to demonstrate their responsiveness to certain issues that may threaten the perception of their ethics, competence or both. Companies that are considered to have a high environmental impact, such as oil, gas and petrochemicals companies, are amongst the highest environmental disclosers. Several companies have used their environmental reporting to respond to specific challenges or concerns, and to inform stakeholders of how these concerns are being dealt with and addressed. One example of this is the use of environmental reporting to gain, maintain or restore the perception of legitimacy. When a company commits an environmental error or is involved in a high-profile incident, many stakeholders seek reassurance that the company has learned lessons from the incident and so can then resume engagement with the company.


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