Institutional pressures and the accounting and reporting of environmental liabilities

Abstract

The study explores the role of institutional forces in shaping corporate accounting and reporting for environmental liabilities practice within the context of South Africa. Drawing on the literature that conceptualizes accounting as a “social and institutional practice” and using Scott's institutional pillars approach, we qualitatively analyze data obtained through in‐depth interviews and documentary reviews and demonstrate that environmental liabilities reported on financial statements of South African companies may not reflect the full extent of environmental obligations stemming from their operations. The enabling environment for this dereliction of corporate responsibility is fostered by the following: (a) a mosaic of weakly enforced laws, acts, and regulations that constitutes the regulative pillar; (b) a cultural‐cognitive template that is still at an early stage of its development; and (c) a stronger normative pillar reinforced by relatively powerful actors who support the institutionalization of normative modes and conflicts and/or contradictions among actors who support the regulative institutions. Our findings suggest that companies in South Africa tend to adopt practices that foster production and disclosure of environmental information that comply with the normatively sanctioned scripts to maintain legitimacy with important stakeholders while decoupling these practices from the regulative prescripts that call for greater environmental accountability.

Business strategy and sustainable development: Evidence from China

“…Institutional pressures have effect on corporate environmental practices (Negash & Lemma, 2020). In this section, we explore the effect of environmental regulation on the association between business strategy and green innovation.…”

Evidenciação de Passivos Ambientais em Empresas de Energia Hidrelétrica.

“…Outrossim, pode-se concluir que há necessidade das empresas melhorarem as evidenciações acerca das informações ambientais reforçando o que se apresenta em outros estudos (Por exemplo, Barbosa et al, 2014;Barcelos et al, 2016;Coelho et al, 2010;Negash & Lemma, 2020;Paananen et al, 2021;Rover et al, 2008;Senn & Giordano-Spring, 2020). Vale salientar que o arcabouço teórico e legal existente para a realidade brasileira está aderente às normas internacionais.…”

“…Mais recentemente, no início do Século XXI, estudos internacionais mostram que a evidenciação de informações ambientais ainda carece de melhorias (Por exemplo, Negash & Lemma 2020;Paananen, Runesson & Samani, 2021;Senn & Giordano-Spring, 2020). Apesar de um aumento de práticas ambientais, estudos sinalizam que ainda são baixos os níveis de evidenciação relacionados a divulgação nos relatórios a respeito de passivos ambientais.…”

The relevance of compliance audit on companies’ compliance with disclosure guidelines of financial statements

“…(Islam and Sadekin, 2020) studied the reporting disclosure levels and compliance with banks’ guidelines, Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) Accounting Standard, IFRS and Securities and Exchange Commission (SEC) Rules of Islamic Financial Institutions. (Negash and Lemma, 2020) explored the role of institutional forces in shaping corporate accounting and reporting for environmental liabilities practice. (Mardini et al , 2018) examined the extent of segmental reporting disclosure and its value relevance to listed companies following the implementation review of the IFRS.…”