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THILAGAN A/L RAJENDRAN

109110066

NUR ISZYANI BINTI POAD

1091101201

Environmental

Reporting

&

Corporate

Social

Responsibility

Briefly discuss

what is difficult about

environmental

reporting based on the following

items

Measurement

Issues

Transparency

And

Disclosure Issues

Accountability

Substitutability

Environmental Reporting

&

Corporate Social

Responsibility

Environmental Reporting

Public disclosure by a firm of its

Title and Content Layout with List

environmental performance

information, similar to the publication

of its financial performance information.

Add your first bullet point here

Corporate Social Responsibility

Add your second bullet point here

A companys sense

of responsibility towards

the community and environment (both

ecological and social) in which it operates. Companies express this citizenship

(1)through

their waste and pollution reduction pro cesses, (2) by contributing educational and social programs, (3) by earning adequate returns on the employed resources.

Add your third bullet point here

Measurement Issues

There are serious concerns on the appropriateness of attempting to monetize nature in this way. No satisfactory method of assessing, basing our decision-making on the wider implications of our activities. Time Horizons Business decisions tend to be made on the basis of what is likely

decisions tend to be made on the basis of what is likely to happen in the
decisions tend to be made on the basis of what is likely to happen in the
decisions tend to be made on the basis of what is likely to happen in the
decisions tend to be made on the basis of what is likely to happen in the

to happen in the next financial year, year up to five years into the

future. Unfortunately some of the environmental impacts that result from business activities can continue to have a negative

effect for hundreds, thousands, or even hundreds of years.

Measurement Issues

The process of measuring sustainability impact and sustainability reporting can be complex and there is currently process of measuring sustainability impact and sustainability reporting can be complex and there is currently no widely accepted model for assessing the financial value of sustainability contributions to a company.

Companies will take different approaches when measuring the different approaches when measuring the

impact of their sustainability activities. They will differ by industry

according to the issues faced.

Accountability

Within the conventional agent-principal relationship ( conventional agent-principal relationship (

communication between principal agent and feedback agent- principal

The instruction and feedback from and to society-extra responsibility (feedback to natural environment, costly, to whom, instruction and feedback from and to society-extra responsibility (feedback to natural environment, costly, to whom,

effectively communicate or not)

Transparency and Disclosure Issues

Disclosure by businesses can be a very costly exercise, not unsurprisingly the business community seems reluctant to take on this expense beyond costly exercise, not unsurprisingly the business community seems reluctant to take on this expense beyond current reporting requirements

Other reasons;take on this expense beyond current reporting requirements protection for competitive position , fear precipitating

protection for competitive position , competitive position,

fear precipitating legal action against disclosing companies precipitating legal action against disclosing companies

Substitutability

Many of the environmental accounting techniques encourage us to consider natural resources as another input the production function, substitutable accounting techniques encourage us to consider natural resources as another input the production function, substitutable with the more traditional capital and labour inputs.

By considering nature as just another resource, we will continue to will continue to

degrade the environment in pursuit of the accumulation of money.

QUESTION 2

Discuss factors that motivate corporate social

responsibility reporting

Key Drivers for Sustainable Reporting

Support and encouragement by regulators

In Malaysia, the Securities Commission and the Second Minister of Finance have come out clearly in support of better Corporate Social Responsibility (CSR).

In Malaysia's National Report on the United Nations' Agenda 21, the government acknowledged the importance of sustainable development.

Advances in communications technology

information becomes public to a wider audience more rapidly than

at any earlier time.

Bad news transmitted faster

high-profile events have demonstrated the risks to reputation and

image associated with poor sustainability management.

Financial markets' interest

Linkages between sustainability performance and key value drivers

such as brand image, reputation and future asset valuation are awakening the mainstream financial markets to new tools for understanding and predicting value in capital markets.

Demands for greater disclosure and accountability

Demand/pressure from stakeholders

Demand for disclosure on social and environmental performance, as well as financial performance

What are their expectation?

Growing importance of intangibles

Reputation and brand

QUESTION 3

Briefly explain three theories explaining corporate engagement in corporate social responsibility reporting

Theory of CSR reporting

The political economy theory (political and economy perspective)

suggests that accounting systems act as mechanism used to create, distribute and mystify power, where accounting reports serve as a tool for constructing, sustaining and emphasis added economic and political arrangements, institutions and ideological themes which contribute to the corporations private interest.

Corporate reports as a product of the interchange between the corporation and its environment

interconnection of social, political and economic processes in society

how institutions develop in different social and economic systems

The social contract theory

explaining the boundaries of acceptable interaction between participants within society

Bounds and norms not static so require organization to be responsive

Relies on the notion of a social contract

The organizational legitimacy theory

corporate management seeks to meet societys expectations, thereby gaining organizational legitimacy

response to changes in community expectations in a way that avoids further explicit restrictions (such as government regulations) or implicit restrictions (such as reputation effects) on their operations

Organizations seek to ensure they operate within the bounds and norms of their

respective societies

Activities are perceived to be legitimate