A longitudinal Examination of Environmental Reporting Practices in Malaysia

Abstract

A content analysis of the annual reports of 96 Malaysian companies in 1999, 2003 and 2006 finds that the number of companies reporting on the environment increased from 47 percent in 1999 to 60 percent in 2003, and further increased to 67 percent in 2006. However, the extent of environmental reporting as measured by the number of environmental sentences and disclosure scores (using a self-constructed disclosure index) indicates a low quality of disclosure. Overall, the disclosure is ad-hoc and predisposed towards building a “good corporate citizen” image. The increasing trend, however, is consistent with the prediction of social issue life cycle theory.

Exploring the Relationship between Carbon Performance, Carbon Reporting and Firm Performance: A Conceptual Paper

“…The index measures the comprehensiveness of the carbon information in terms of its breadth, depth and the reliability of the information. Therefore, the formation of reporting index is consistent with the concept of accountability and the principle of full disclosure of accounting information (Alrazi, Nik Ahmad & Sulaiman, 2009). The assessment of the quality of carbon reporting using disclosure index is essential in monitoring the carbon disclosure practices of companies over time and will increase competition between companies, hence ensuring a more comprehensive information (Hadley's study as cited in Jones & Alabaster, 1999).…”

Environmental Disclosures by the Malaysian Construction Sector: Exploring Extent and Quality

“…While there are fewer social and/or environmental disclosure studies in developing countries, the results appear to be similar in that studies found that extent of environmental disclosures is very minimal and disclosures tend to be self‐laudatory and very general information which is not easily verifiable (Basalamah & Jermias, ; De Villiers & Van Staden, ; Sumiani et al ., ; Islam and Deegan, ; Alrazi et al ., ). Alrazi et al .…”

“…The literature review suggests that while environmental disclosures were generally increasing, the extent and quality are still low, both in developed and developing countries (Niskala & Pretes, ; Moneva & Llena, ;Alrazi et al ., ). Most disclosures are self‐laudatory and confined to general, descriptive statements (Deegan & Gordon, ; Deegan & Rankin, ; Laine, ).…”

“…Alrazi et al . () examined the extent and quality of environmental disclosures of Malaysian public‐listed companies for the years 1999, 2003, and 2006. The authors found that no company provided an independent verification of the information reported.…”

“…The author attributes this to the low level of environmental awareness in the country. This conclusion, and findings of recent environmental disclosure studies that disclosures in Malaysia are low in extent and quality (Sumiani et al ., , Alrazi et al ., ), give rise to a critical question; ‘do such disclosures discharge accountability?’…”