The Role of Non-Financial Reporting in Modern Ecological Problems Updating and Solving
Abstract
The relevance of the paper is due to the conscious demand of society for ecological results data of business against the background of climate change and ecological disasters. The purpose of the article is to develop recommendations aimed at improving informativeness and reliability of the companies’ non-financial reporting on their ecological management. The study is based on a legitimacy and legality analysis of the global practice of compiling and submitting non-financial reporting. It is determined that the Global Reporting Initiative (GRI) Standards are the most popular among the public-interest entities for the preparation of non-financial reporting. The authors have structured a set of current GRI Standards 300 series (Environmental topics) on the issues’ content. The authors have formed practical proposals increasing the informativeness of non-financial reporting, which is made according to the GRI Standards by identifying the need for additional data disclosure about the company’s policies on resource consumption, environmental protection, hazardous emissions and waste management. These proposals will help increase the credibility of non-financial reporting indicators by providing cross-sectional information on the same phenomenon or event in case of the absence of independent control over the statement’s reliability. It will be an important argument in favour of non-financial reporting as a data source for all stakeholders’ decision-making.
References
[1] Aureli, S., Magnaghi, E. and Salvatori, F. 2019. The role of existing regulation and discretion in harmonising non-financial disclosure. Accounting in Europe, 16(3): 290-312. DOI:https://doi.org/10.1080/17449480.2019.1637529
[2] Babiak, K. and Trendafilova, S. 2011. CSR and environmental responsibility: motives and pressures to adopt green management practices. Corporate Social Responsibility and Environmental Management, 18(1): 11-24. DOI: https://doi.org/10.1002/csr.229
[3] Brown, H. S., de Jong, M. and Levy, D. L. 2009. Building institutions based on information disclosure: lessons from GRI’s sustainability reporting. Journal of Cleaner Production, 17(6): 571-580. DOI:https://doi.org/10.1016/j.jclepro.2008.12.009
[4] Chen, S. and Bouvain, P. 2009. Is corporate responsibility converging? A comparison of corporate responsibility reporting in the USA, UK, Australia, and Germany. Journal of Business Ethics, 87: 299-317. DOI: https://doi.org/10.1007/s10551-008-9794-0
[5] Clarkson, P. M., Li, Y., Richardson, G. D. and Vasvari, F. P. 2008. Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis. Accounting, Organizations and Society, 33(4-5): 303-327. DOI: https://doi.org/10.1016/j.aos.2007.05.003
[6] Doni, F., Bianchi Martini, S. B., Corvino, A. and Mazzoni, M. 2019. Voluntary versus mandatory non-financial disclosure: EU Directive 95/2014 and sustainability reporting practices based on empirical evidence from Italy. Meditari Accountancy Research, 28(5): 781-802. DOI: https://doi.org/10.1108/MEDAR-12-2018-0423
[7] Fallan, E. and Fallan, L. 2009. Voluntarism versus regulation: lessons from public disclosure of environmental performance information in Norwegian companies. Journal of Accounting and Organizational Change, 5(4): 472-489. DOI: https://doi.org/10.1108/18325910910994685
[8] Gallego-Álvarez, I., Lozano, M. B. and Rodríguez-Rosa, M. 2018. An analysis of the environmental information in international companies according to the new GRI Standards. Journal of Cleaner Production, 182: 57-66. DOI: http://doi.org/10.1016/j.jclepro.2018.01.240
[9] Hahn, R. and Lülfs, R. 2013. Legitimizing negative aspects in GRI-oriented sustainability reporting: A qualitative analysis of corporate disclosure strategies. Journal of Business Ethics, 123(3): 401-420. DOI:https://doi.org/10.1007/s10551-013-1801-4
[10] Hummel, K. and Schlick, C. 2016. The relationship between sustainability performance and sustainability disclosure – Reconciling voluntary disclosure theory and legitimacy theory. Journal of Accounting and Public Policy, 35(5): 455-476. DOI: https://doi.org/10.1016/j.jaccpubpol.2016.06.001
[11] Jones, P., Comfort, D. and Hillier, D. 2016. Managing materiality: a preliminary examination of the adoption of the new GRI G4 guidelines on materiality within the business community. Journal of Public Affairs, 16(3): 222-230. DOI: https://doi.org/10.1002/pa.1586
[12] Kumar, R., Pande, N. and Afreen, S. 2018. Developing a GRI-G4-based persuasive communication framework for sustainability reporting (SR). International Journal of Emerging Markets, 13(1): 136-161. DOI:https://doi.org/10.1108/IJoEM-01-2017-0015
[13] La Torre, M. et al. 2018. Harmonising non-financial reporting regulation in Europe. Meditari Accountancy Research, 22: 598-621. DOI: https://doi.org/10.1108/MEDAR-02-2018-0290
[14] Margolis, J. D., Elfenbein, H. A. and Walsh, J. P. 2009. Does it pay to be good? A meta-analysis of the relationship between corporate social and financial performance. SSRN Electronic Journal. Available at: https://www.researchgate.net/publication/237455609_Does_it_pay_to_be_good_A_meta-analysis_and_redirection_of_research_on_the_relationship_between_corporate_social_and_financial_performance
[15] McWilliams, A. and Siegel, D. 2000. Corporate social responsibility and financial performance: Correlation or misspecification? Strategic Management Journal, 21(5): 603-609. DOI: https://doi.org/10.1002/(sici)1097-0266(200005)21:5<603::aid-smj101>3.0.co;2-3
[16] Melloni, G., Caglio, A. and Perego, P. 2017. Saying more with less? Disclosure conciseness, completeness and balance in integrated reports. Journal of Accounting and Public Policy, 36(3): 220-238. DOI:https://doi.org/10.1016/j.jaccpubpol.2017.03.001
[17] Michelon, G., Patten, D. M. and Romi, A. M. 2019. Creating legitimacy for sustainability assurance practices: evidence from sustainability restatements. European Accounting Review, 28(2): 395-422. DOI:https://doi.org/10.1080/09638180.2018.1469424
[18] Michelon, G., Pilonato, S. and Ricceri, F. 2015. CSR reporting practices and the quality of disclosure: an empirical analysis. Critical Perspectives on Accounting, 33: 59-78. DOI:https://doi.org/10.1016/j.cpa.2014.10.003
[19] Milne, M. J. and Adler, R. W. 1999. Exploring the reliability of social and environmental disclosures content analysis. Accounting, Auditing & Accountability Journal, 12(2): 237-256. DOI:https://doi.org/10.1108/09513579910270138
[20] Moneva, J. M., Archel, P. and Correa, C. 2006. GRI and the camouflaging of corporate unsustainability. Accounting Forum, 30(2): 121-137. DOI: https://doi.org/10.1016/j.accfor.2006.02.001
[21] Needles, B. E. Jr., Frigo, M. L., Powers, M. and Shigaev, A. 2016. Integrated reporting and sustainability reporting: An exploratory study of high performance companies. Emerald Group Publishing Limited. In Performance Measurement and Management Control: Contemporary Issues: 41-81. DOI: http://doi.org /10.1108/S1479-351220160000031019
[22] O'Dwyer, B. and Owen, D. L. 2005. Assurance statement practice in environmental, social and sustainability reporting: a critical evaluation. The British Accounting Review, 37(2): 205-229. DOI:https://doi.org/10.1016/j.bar.2005.01.005
[23] Orlitzky, M., Schmidt, F. and Rynes, S. L. 2003. Corporate social and financial performance: A meta-analysis. Organization Studies, 24(3): 403-440. DOI: https://doi.org/10.1177%2F0170840603024003910
[24] Stubbs, W. and Higgins, C. 2015. Stakeholders’ perspectives on the role of regulatory reform in integrated reporting. Journal of Business Ethics, 147(3): 489-508. DOI: https://doi.org/10.1007/s10551-015-2954-0
[25] Tschopp, D. and Nastanski, M. 2014. The harmonization and convergence of corporate social responsibility reporting standards. Journal of Business Ethics, 125(1): 147-162. DOI: https://doi.org/10.1007/s10551-013-1906-9
[26] Venturelli, A., Pizzi, S., Caputo, F. and Principale, S. 2020. The revision of nonfinancial reporting directive: a critical lens on the comparability principle. Business Strategy and the Environment: 1-14. DOI:https://doi.org/10.1002/bse.2598
[27] BP. Statistical Review of World Energy 2020. 69th edition. Statistical Review of World Energy. Available at: https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2020-full-report.pdf
[28] European Commission. Guidelines on non-financial reporting: Supplement on reporting climate-related information. European Union law. Available at: https://eur-lex.europa.eu/legal-content/EN/TXT/
[29] GlobeScan. Risen trust in sustainability reporting around the world. Available at: https://globescan.com/rising-trust-sustainability-reporting
[30] International Accounting Standards Committee. IAS 1 “Presentation of financial statements”. Efes Group LLC. Available at: https://www.efes.group/wp-content/uploads/2018/11/ias1_en-1.pdf
[31] International Integrated Reporting Council. The international framework. Integrated Reporting. Available at: https://integratedreporting.org/wp-content/uploads/2013/12/13-12-08-THE-INTERNATIONAL-IR-FRAMEWORK-2-1.pdf
[32] The European Parliament & the Council of the European Union. Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups. European Union law. Available at: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0095&from=EN.
[33] The Global Sustainability Standards Board. GRI Standards 300 series (Environmental topics). Global Sustainability Initiative. Available at: https://www.globalreporting.org/how-to-use-the-gri-standards/resource-center
[2] Babiak, K. and Trendafilova, S. 2011. CSR and environmental responsibility: motives and pressures to adopt green management practices. Corporate Social Responsibility and Environmental Management, 18(1): 11-24. DOI: https://doi.org/10.1002/csr.229
[3] Brown, H. S., de Jong, M. and Levy, D. L. 2009. Building institutions based on information disclosure: lessons from GRI’s sustainability reporting. Journal of Cleaner Production, 17(6): 571-580. DOI:https://doi.org/10.1016/j.jclepro.2008.12.009
[4] Chen, S. and Bouvain, P. 2009. Is corporate responsibility converging? A comparison of corporate responsibility reporting in the USA, UK, Australia, and Germany. Journal of Business Ethics, 87: 299-317. DOI: https://doi.org/10.1007/s10551-008-9794-0
[5] Clarkson, P. M., Li, Y., Richardson, G. D. and Vasvari, F. P. 2008. Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis. Accounting, Organizations and Society, 33(4-5): 303-327. DOI: https://doi.org/10.1016/j.aos.2007.05.003
[6] Doni, F., Bianchi Martini, S. B., Corvino, A. and Mazzoni, M. 2019. Voluntary versus mandatory non-financial disclosure: EU Directive 95/2014 and sustainability reporting practices based on empirical evidence from Italy. Meditari Accountancy Research, 28(5): 781-802. DOI: https://doi.org/10.1108/MEDAR-12-2018-0423
[7] Fallan, E. and Fallan, L. 2009. Voluntarism versus regulation: lessons from public disclosure of environmental performance information in Norwegian companies. Journal of Accounting and Organizational Change, 5(4): 472-489. DOI: https://doi.org/10.1108/18325910910994685
[8] Gallego-Álvarez, I., Lozano, M. B. and Rodríguez-Rosa, M. 2018. An analysis of the environmental information in international companies according to the new GRI Standards. Journal of Cleaner Production, 182: 57-66. DOI: http://doi.org/10.1016/j.jclepro.2018.01.240
[9] Hahn, R. and Lülfs, R. 2013. Legitimizing negative aspects in GRI-oriented sustainability reporting: A qualitative analysis of corporate disclosure strategies. Journal of Business Ethics, 123(3): 401-420. DOI:https://doi.org/10.1007/s10551-013-1801-4
[10] Hummel, K. and Schlick, C. 2016. The relationship between sustainability performance and sustainability disclosure – Reconciling voluntary disclosure theory and legitimacy theory. Journal of Accounting and Public Policy, 35(5): 455-476. DOI: https://doi.org/10.1016/j.jaccpubpol.2016.06.001
[11] Jones, P., Comfort, D. and Hillier, D. 2016. Managing materiality: a preliminary examination of the adoption of the new GRI G4 guidelines on materiality within the business community. Journal of Public Affairs, 16(3): 222-230. DOI: https://doi.org/10.1002/pa.1586
[12] Kumar, R., Pande, N. and Afreen, S. 2018. Developing a GRI-G4-based persuasive communication framework for sustainability reporting (SR). International Journal of Emerging Markets, 13(1): 136-161. DOI:https://doi.org/10.1108/IJoEM-01-2017-0015
[13] La Torre, M. et al. 2018. Harmonising non-financial reporting regulation in Europe. Meditari Accountancy Research, 22: 598-621. DOI: https://doi.org/10.1108/MEDAR-02-2018-0290
[14] Margolis, J. D., Elfenbein, H. A. and Walsh, J. P. 2009. Does it pay to be good? A meta-analysis of the relationship between corporate social and financial performance. SSRN Electronic Journal. Available at: https://www.researchgate.net/publication/237455609_Does_it_pay_to_be_good_A_meta-analysis_and_redirection_of_research_on_the_relationship_between_corporate_social_and_financial_performance
[15] McWilliams, A. and Siegel, D. 2000. Corporate social responsibility and financial performance: Correlation or misspecification? Strategic Management Journal, 21(5): 603-609. DOI: https://doi.org/10.1002/(sici)1097-0266(200005)21:5<603::aid-smj101>3.0.co;2-3
[16] Melloni, G., Caglio, A. and Perego, P. 2017. Saying more with less? Disclosure conciseness, completeness and balance in integrated reports. Journal of Accounting and Public Policy, 36(3): 220-238. DOI:https://doi.org/10.1016/j.jaccpubpol.2017.03.001
[17] Michelon, G., Patten, D. M. and Romi, A. M. 2019. Creating legitimacy for sustainability assurance practices: evidence from sustainability restatements. European Accounting Review, 28(2): 395-422. DOI:https://doi.org/10.1080/09638180.2018.1469424
[18] Michelon, G., Pilonato, S. and Ricceri, F. 2015. CSR reporting practices and the quality of disclosure: an empirical analysis. Critical Perspectives on Accounting, 33: 59-78. DOI:https://doi.org/10.1016/j.cpa.2014.10.003
[19] Milne, M. J. and Adler, R. W. 1999. Exploring the reliability of social and environmental disclosures content analysis. Accounting, Auditing & Accountability Journal, 12(2): 237-256. DOI:https://doi.org/10.1108/09513579910270138
[20] Moneva, J. M., Archel, P. and Correa, C. 2006. GRI and the camouflaging of corporate unsustainability. Accounting Forum, 30(2): 121-137. DOI: https://doi.org/10.1016/j.accfor.2006.02.001
[21] Needles, B. E. Jr., Frigo, M. L., Powers, M. and Shigaev, A. 2016. Integrated reporting and sustainability reporting: An exploratory study of high performance companies. Emerald Group Publishing Limited. In Performance Measurement and Management Control: Contemporary Issues: 41-81. DOI: http://doi.org /10.1108/S1479-351220160000031019
[22] O'Dwyer, B. and Owen, D. L. 2005. Assurance statement practice in environmental, social and sustainability reporting: a critical evaluation. The British Accounting Review, 37(2): 205-229. DOI:https://doi.org/10.1016/j.bar.2005.01.005
[23] Orlitzky, M., Schmidt, F. and Rynes, S. L. 2003. Corporate social and financial performance: A meta-analysis. Organization Studies, 24(3): 403-440. DOI: https://doi.org/10.1177%2F0170840603024003910
[24] Stubbs, W. and Higgins, C. 2015. Stakeholders’ perspectives on the role of regulatory reform in integrated reporting. Journal of Business Ethics, 147(3): 489-508. DOI: https://doi.org/10.1007/s10551-015-2954-0
[25] Tschopp, D. and Nastanski, M. 2014. The harmonization and convergence of corporate social responsibility reporting standards. Journal of Business Ethics, 125(1): 147-162. DOI: https://doi.org/10.1007/s10551-013-1906-9
[26] Venturelli, A., Pizzi, S., Caputo, F. and Principale, S. 2020. The revision of nonfinancial reporting directive: a critical lens on the comparability principle. Business Strategy and the Environment: 1-14. DOI:https://doi.org/10.1002/bse.2598
[27] BP. Statistical Review of World Energy 2020. 69th edition. Statistical Review of World Energy. Available at: https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2020-full-report.pdf
[28] European Commission. Guidelines on non-financial reporting: Supplement on reporting climate-related information. European Union law. Available at: https://eur-lex.europa.eu/legal-content/EN/TXT/
[29] GlobeScan. Risen trust in sustainability reporting around the world. Available at: https://globescan.com/rising-trust-sustainability-reporting
[30] International Accounting Standards Committee. IAS 1 “Presentation of financial statements”. Efes Group LLC. Available at: https://www.efes.group/wp-content/uploads/2018/11/ias1_en-1.pdf
[31] International Integrated Reporting Council. The international
[32] The European Parliament & the Council of the European Union. Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups. European Union law. Available at: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0095&from=EN.
[33] The Global Sustainability Standards Board. GRI Standards 300 series (Environmental topics). Global Sustainability Initiative. Available at: https://www.globalreporting.org/how-to-use-the-gri-standards/resource-center
Published
2021-02-21
How to Cite
MYSAKA, Hanna; DERUN, Ivan; SKLIARUK, Iryna.
The Role of Non-Financial Reporting in Modern Ecological Problems Updating and Solving.
Journal of Environmental Management and Tourism, [S.l.], v. 12, n. 1, p. 18-29, feb. 2021.
ISSN 2068-7729.
Available at: <https://journals.aserspublishing.eu/jemt/article/view/5877>. Date accessed: 05 nov. 2024.
doi: https://doi.org/10.14505/jemt.v12.1(49).02.
Section
Article
Copyright© 2024 The Author(s). Published by ASERS Publishing 2024. This is an open access article distributed under the terms of CC-BY 4.0 license.