The environmental reporting requirement is through regulations on corporate finan-
cial disclosures and responsibilities to shareholders. The basis of the regulation is fur-
ther analysis of activities of the enterprise in an environmental context, and to pro-
vide an overview of the environmental obligations. From the accounts it should be
possible to understand which ambitions and targets the company has set, and what
environmental limitations are expected from the authorities.
(b) Overview of Regulations. Mandatory reporting can be classified as that which
focuses on the financial risks associated with the impact on the environment or reg-
ulations that require a “full account” of a company’s impact on the environment
(these are classified in Exhibit 23.2). Those regulations that focus on the financial
may be seen as a bridge between existing accounting regulations and the increasing
importance of environmental issues. The requirement for “full” disclosure of envi-
ronmental impacts to external stakeholders is much less usual, with a number of
countries requiring components of full disclosure but only to government agencies
for monitoring environmental performance and to collate inventories of environmen-
tal impact (e.g., the TRI in the United States). The disclosure of impact has typically
been dealt with through voluntary environmental reporting guidelines.
(c) Voluntary Guidelines. The introduction of mandatory environmental reporting
guidelines has been relatively recent for many countries, whereas there is a plethora
of guidelines or voluntary standards on the reporting of environmental and social is-
sues. Exhibit 23.3 lists some of these guidelines or standards and gives a web address
for further information.
Many of these guidelines argue for further voluntary disclosure by companies on
their environmental performance, suggesting that such disclosure improves public
perception of the company’s performance (further discussion on voluntary environ-
mental reporting is undertaken below). Further discussion on selected guidelines is
undertaken in a latter section.
(d) Voluntary Disclosures. The voluntary reporting of social and environmental in-
formation by companies has a long history. A 1982 study^7 observed that U.S. Steel
had engaged in social reporting for over eight decades. A similar study^8 of an Aus-
tralian company (BHP) also observed the existence of social reporting over an ex-
23.2 ENVIRONMENTAL REPORTING 23 • 5Country Regulation Type Disclosure Requirement
United States Corporate Compliance and liabilities
Australia Corporate Compliance
Denmark Environment Resource consumption
Netherlands Environment Environmental impact
Norway Accounting Targets and regulations
Exhibit 23.2. Mandatory Regulations.
(^7) Hogner, 1982.
(^8) Guthrie and Parker, 1989.