Environmental Accountability: A Shareholder Requirement?

Charl De Villiers
The University of Auckland
New Zealand

Chris Van Staden
The University of Auckland
New Zealand

Abstract:
Environmental accounting research often focus on what companies disclose, where they disclose and why they do it, given that it is mostly voluntary. Few ask the users of company information what they require. We ask individual shareholders as, arguably, the most important user group, whether they want companies to disclose specific types of environmental information; what they use or will use it for; why they think companies should provide the information; where they want the information published; and whether they think it should become a compulsory disclosure. We ask individual shareholders in Australia, the United Kingdom and the United States of America, using an online survey.

We find that shareholders want a range of environmental disclosures including an overview of environmental risks and impacts, the environmental policy, measurable environmental targets derived from the policy and performance against these targets and information on a range of environmental costs. Most shareholders want environmental information to be made compulsory, to be audited, and to be published in the annual report under a separate environmental section and also on the company website. The most important reason that shareholders want environmental information is because they believe companies should be accountable for their environmental impacts.

These findings have important implications and we suggest that governments, the accounting profession and other standard setters should take note of these changing opinions and ideas.