Environmental Reporting Practices: A Study on Selected Manufacturing Companies in Bangladesh

Abstract

Within the last few decades environmental reporting has become a popular field of research and has impressed several numbers of researchers around the world. But, very few studies have been carried out in the context of developing countries, particularly in Bangladesh. So, there exists a dearth of comprehensive research in this field. Therefore, this study aimed at exploring two primary areas of environmental reporting in Bangladesh. Firstly, the study explored the nature and extent of environmental disclosures in the annual reports of the selected Cement, Tannery, Textiles and Pharmaceuticals companies in Bangladesh during 2009-2013 by using content analysis method and a dichotomous procedure known as Kinder Lydenberg Domini (KLD) rating system. In this regard, the International Organizations for Standardization’s requirements (ISO 14031) was selected as a benchmark. Then the study explored the perceptions of multiple stakeholder groups regarding the various aspects of the reporting practices through arranging a series of face-to-face interviews (with the help of a structured questionnaire) with 85 respondents of five selected managerial and non-managerial stakeholder groups. The results revealed that sample companies disclosed very negligible amount of information regarding environmental issues, but quantity of disclosure had been increasing gradually during the period of analysis 2009-2913. The results further showed that sample companies mainly disclosed descriptive information regarding their environmental performance. It is also observed that sample companies preferred to report the positive impacts of their activities on environment rather than the information that reflects discredit to the company. The study concludes that environmental disclosures of the sample companies were largely unregulated and inconsistent. The findings showed the low level of understanding of stakeholders on the concept of environmental reporting. It is also revealed that most of the selected stakeholders considered environmental reporting as a significant tool for improving environmental accountability of the companies. Besides, survey respondents believed that environmental performance and disclosures of environmental information can influence the corporate relationships with stakeholders. But environmental disclosures of the listed manufacturing companies in Bangladesh were not considered credible to the stakeholders without any external verification. It is also found that about 90% of the survey participants supported the mandatory status of environmental reporting for the listed manufacturing companies in Bangladesh. In addition, the study explored the perceptions of stakeholders regarding the content-category themes for ideal environmental reporting of the listed manufacturing companies in Bangladesh context. Besides, the findings revealed a range of limiting factors of environmental reporting practices in Bangladesh and the possible ways of minimizing the challenges of the reporting practices based on views and comments of respondents. Taking into consideration the findings, this study sketched some recommendations for the consideration of the stakeholders Moreover, the study concludes by proposing a number of potential avenues for further research.