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

Accountability

Transparency
And Disclosure Issues

Substitutability

Title and Content Layout

Add your first bullet point here
Corporate Social Responsibility

Environmental Reporting Public disclosure by a firm of its environmental performance information, similar to the publication of its financial performance information.

Environmental Reporting & withCorporate List Social Responsibility

Add your second A company s sense bullet point here

Add your third bullet point here the community and environment (both
of responsibility towards
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.

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

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 no widely accepted model for assessing the financial value of sustainability contributions to a company.

Companies will take 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 ( communication between principal agent and feedback agentprincipal The 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 current reporting requirements Other reasons;

protection for competitive position,

fear 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 with the more traditional capital and labour inputs. By considering nature as just another resource, we 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 (Sources : Sustainability Reporting Guidelines for Malaysian Companies )

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 Activities are perceived to be legitimate

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