Why Environmental Reporting Essay Example


Voluntary environment reporting refers to the process of disclosing environmental accounting information to the public. It is aimed at informing the public of organizational influence on the environment, how the organization is managing the impacts and policies in place to ensuring that a sustainable ecological environment is maintained. Environmental reporting facilitates regulation of environmental pollution and hence eases controlling world climate change resulting from greenhouse effect that is believed to cause global warming.

The atmosphere allow penetration of sunrays to the earth surface, the earth is warmed up by the rays and it radiates back heat, the heat is absorbed in the atmosphere while a substantial amount is remitted back to the earth, this keeps the earth warm and habitable. It is called greenhouse effect. When the level of greenhouse gases are increased in the atmosphere, the green house effect increases causing a general rise temperatures.

Why Environmental Reporting

The main gases that is responsible for the green house effects is carbon dioxide, water vapor, nitrous oxide and methane. Increases in emission of greenhouse gases in excess are attributed to human activities. Australia has contributes up to 1.5% of the greenhouse gases in atmosphere against its average population of 0.3% in the world total population. Australia is therefore one of the highest per capita emitters in the countries of the world. The greenhouse gases are emitted from activities such as combustion of fossil of fuels like natural gas, oil and coal and land clearing. These activities have been largely responsible for the increased concentration of carbon range in the atmosphere for the last sixty years in comparison with the years prior to 1950.

Global warming is term that refers to changes in climate. For the last five decades, there have been climatic changes globally; such changes include general rise in average temperatures, increased melting of snow resulting in a rise in the sea level. Climate in Australia is changing too. The areas that are seriously affected by carbon emissions include biodiversity, agriculture, water, human health and settlements along the coastal regions. There is need to mitigate the human introduced climate through reduced greenhouse gas emission. There are many ways in the world to reduce such emissions and so it is in Australia too. Businesses and individuals in Australia can avoid the emissions through wide usage of renewable sauces of energy, using energy efficiently and using public transportation widely. Charging a price for carbon emission can help in reducing carbon emission hence low carbon economy.

Organizations should report environmental information for a number of reasons. To begin with, most stakeholders wish to integrate environmental and financial information is making investment decisions. This has driven the organization to be transparent and show the public that they are acting in good faith by showing the society they are striving to change for the better. Secondly, large organizations are increasing becoming accountable for their actions because if their performance is criticized on environmental responsibility extensively, their value of good governance, corporate reputations and customer loyalty will be at a risk. Lastly, most stakeholders like shareholders, customers, media, employees, consumers and non governmental organization are increasingly asking for information on social and environmental responsibility.

These pressures compel the organization to communicate environment information to the public voluntarily. The organizations are increasingly integrating the reporting of both financial and environmental information to the public in good will. On the other hand, small organizations are slowly visualizing the need for accountability, transparency and stakeholder dialogue.

Australia is communities, economies and regulators are exerting pressures on organizations to disclose environmental information to the public too. Reporting of environmental information started in 1990s in Australia. The number of reporting entities has steadily increased because of two main drivers: compulsory and voluntary. The former is driven by four main reasons. They include National Pollutants Inventory, Corporate law section 299(1), Greenhouse Challenges Program of Australia. Voluntary driver include: Environmental screen Fund, Accredited Licenses, Environmental Accounting and Reporting by Public Accounts in association with Estimate committee and Plastic and Chemical Industry Association.

There are important benefits which accrue as a result of reporting environmental information. The most basic benefit is meeting the stakeholders’ needs to know environmental responsibility of the organization which tends to increase the stakeholder loyalty. Other may include; improved internal environment performance, increased commitment and responsibility of the employees increasing market opportunities, improved investor confidence and improving relationship with local, NGOs, regulators and communities.


To tie the loose ends, there is a global climatic crisis which is caused by Human activities. These climatic changes are as a result irresponsible human behavior. If all human beings take charge of the environment, the public will take a collective responsibility to monitor businesses and influence of their activities on the environment therefore demanding written reports of environmental responsibility from the organizations. This gives the organization a constant pressure to report on environmental information. Reporting on this issue therefore becomes a requirement that is inevitable today. Some organization have taken the initiative to take is positively therefore making it a marketing too. Current status and future indications leaves no doubt due to the fact that these organization will increasingly become responsible in dealing with environmental issues since they have the obligation reporting on both the financial and the environmental information to the public.


Gozali, N. O., Janice, C.Y., & Peter, V. (2002). The Economic Consequences of Voluntary Environmental Information Disclosure. Working paper. School of Economics and Finance, Curtin University of Technology, Western Australia.