Annals of the University of Oradea: Economic Science (Dec 2011)
EVALUATION OF ENVIRONMENTAL REPORTING FOR COMPANIES LISTED ON THE LONDON STOCK EXCHANGE
Abstract
Environmental aspects have become significant for an increasing number of companies and can have, under certain circumstances, a significant impact on financial statements. A large number of studies can be outlined in time analyzing the variation of environmental reporting (Deegan et al, 2002; O'Donovan, 2002; Holland and Foo, 2003; Nyquist, 2003; Cormier et al, 2005; Yusoff et al, 2006; Jorgensen and Sodorstrom, 2006; Taylor and Shan, 2007; Sumiani et al, 2007). The main objective targeted by this study is the evaluation of environmental reporting for the European companies listed on the London Stock Exchange. In order to achieve the proposed objective, we have completed an longitudinal and transversal analysis of environmental reporting within companies listed on FTSE 100, monitoring first of all the way in which these companies report non-financial and financial aspects related to environmental impact as well as how these reports are being audited. For each annual statement or sustainable report, we have analized the level of environmental reporting. The evaluation of how information on environmental impact are being reported is based on four categories of information: information on indicators (technical, financial) that would reflect the environmental impact (water, air, soil), information regarding the financial indicators (investments, assets and other environmental costs, debts and provisions), non-financial information (related to the company's comitment, objectives, programs, management, future perspectives etc), information on environmental audit. Analysing the results we have obtained, the following can be outlined a certain increasing trend on the level and relevance of environmental information supplied for the companies listed on FTSE 100. Only 22 of the analysed companies are reporting the environmental performance indicators recommended by accredited bodies such as the GRI Guidelines (the most complex guidance in this respect). 20 of the 48 analysed companies have audited such information, thus increasing the relevance of this type of information. The paper contribute to the understanding of environmental reporting at international level, creating an image of the quality of environmental informations provided by the most representative companies at international level.
