Post on 25-May-2022
International Research Symposium in Service Management ISSN 1694-0938
Environmental Reporting in Mauritian Listed Companies
Dineshwar Ramdhony University of Mauritius
Reduit Email: d.ramdhony@uom.ac.mu
Tel: (230) 7523023
Kesseven Padachi University of Technology (Mauritius)
La Tour Koenig Pte-aux-sable
Email: kpadachi@utm.intnet.mu Tel: (230) 7876403
Laury Giroffle Email: chris.lo.4@hotmail.com
Tel: (230) 7385017
Environmental Reporting in Mauritian Listed Companies
Abstract Le Meridien Hotel, Mauritius, 24-27 August 2010
International Research Symposium in Service Management ISSN 1694-0938
Over the past decades concern about the environment has become a worldwide phenomenon. Mauritius being no exception, the government recently launched several initiatives for a ‘Green’ island. The rising concern for environmental issues has triggered an increasing number of companies to bring out their environmental contribution through environmental reporting.
Purpose: The paper investigates the motives for and obstacles faced by firms in environmental reporting and further examines whether firms are in favour of mandatory environmental reporting.
Methodology: A survey of firms listed on the official market of the Stock Exchange of Mauritius was carried out.
Findings: Results show that the annual report is the main reporting medium. The cost of reporting in terms of time, money and other resources used and problems in measuring the environmental performance are among the major obstacles in reporting environmental information. The majority of companies are opposed to mandatory reporting of environmental information and respondents believe that reporting on environmental aspects can contribute towards sustainable development of the country.
Research limitation: The study was conducted on companies listed on the official market of the stock exchange of Mauritius and owing to the small size of the sample, results are not necessarily representative of all companies operating in Mauritius.
Originality/value: The paper adds to the scarce literature on environmental reporting in Mauritius.
Key words: Environmental reporting, CSR reporting, Sustainability reporting.
Introduction Over the past decades there has been increasing pressure on businesses to report on the social and
environmental impact of their activities. Public bodies and companies are now more aware and
responsive to sustainability issues (ACCA, 2009:3). This practice has developed from almost nothing
to turn into one of the most significant manifestations of business-environment interactions and is
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now a major instrument in discharging accountability to a wide range of audiences. A myriad of
names is used to qualify reporting in this area; Corporate Reporting (CR), Corporate Social
Responsibility Reporting (CSR), triple bottom line reporting, sustainability reporting, environmental
reporting (ER) among others. The subject is of prime importance for a small island state like
Mauritius which is not gifted by nature with rewarding resources. Various initiatives and recently the
‘Maurice ile durable’ project are clear indications that the Mauritian government has placed concerns
about the environment high on its agenda.
Traditional accounting suffers from limitations in dealing with environmental issues (Fortes,
2001) thus the main reason for the non-existence of a fully fledged accounting standard on
environmental accounting and reporting. Consequently, reporting of environmental information has
been embedded in the field of corporate social responsibility (CSR). Nowadays, the term corporate
social and environmental reporting is widely used by researchers and common people to refer to the
disclosure of information relating to human resources, ethics, health and safety and various other
fields.
Mauritius is one of the rare countries which has given a statutory status to CSR. CSR has
been embodied in the Finance Act 2009 which requires all onshore companies to contribute 2% of
their book profit of the preceding year to a CSR fund (Ng Ping Chen, 2009:1). Environmental
reporting is mandatory for public interest entities (which includes listed companies) after the
amendment of the Financial Reporting Act (2004) in July 2009 but in the absence of clear guidelines
as regards what and how to report, this paper seeks the opinion of respondents as to whether
environmental reporting should be voluntary or mandatory. It further explores the drivers and barriers
to environmental reporting in Mauritius.
Literature review Environmental reporting relates to the collection, measurement and publication of ‘green’ information
to the community. Edu et al. (2009) defines such practice as:
“the use of environmental information to disclose the impact of corporate activities on the natural
environment to stakeholders of the corporate entity or organisation.”
Theoretical framework Over time, several theories have emerged to explain the reasons behind environmental reporting.
Some of them are: legitimacy theory, stakeholder theory, media agenda setting theory and
accountability.
Drivers for environmental reporting
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Economic performance Most businesses operate with a view to yield profits. Al-Tuwaijiri et al., (2004) observed that good
environmental performance and/or environmental disclosures were, in fact, related to good economic
performance. Yet, it seems that the findings obtained have been diverse for different researchers and
some studies have shown that the correlation between environmental reporting and good economic
performance is very immaterial (Balbanis et al., 1998).
Compliance with environmental regulations According to Cordano (1993) rising penalties, fines, and other legal costs instituted the importance of
acting in accordance with legislation. Businesses are increasingly aware of the need to conform to
green regulations in order to avoid the threat of environmental liabilities. Thus, through environmental
reporting companies are able to show their compliance with regulations that are imposed by relevant
authorities. Yet, acting in accordance with legal requirements is unlikely going to be the primary
motive, given the scarcity of requirements regarding environmental disclosures and related
verifications (Deegan et al., 2000).
Ethical duty Companies also have an ethical duty to behave in a socially responsible manner. Research has
revealed that businesses that feel concerned for the environment and demonstrate good CR practices
enjoy increased consumer purchase preference (Gildea, 1994 ; Zaman, 1996).
Attract ethical investors The growth in ethical investment has persuaded corporations to give attention to CR (Lydenberg and
Grace, 2008). As a matter of fact, various stock exchanges such as the Johannesburg Stock Exchange
and the Paris Stock Exchange require listed companies to disseminate CSR information in their
annual report. Such initiative aims at capturing more ethical investors who usually look for companies
with positive reputation.
Improve or maintain good reputation CSR reporting is a way for firms to improve their image and maintain their licence to operate. Indeed,
it can be considered as a promotional campaign to enhance corporate reputation and public relations
(KPMG, 2005).
Research demonstrated that the majority of information available in the reports is more of a
positive nature. For instance, in a study conducted by Deegan et al. (1996), it was found that the
average amount of positive environmental disclosures made by their sample firms totalled to 270
words out of which negative disclosures amounted to 6 words.
Increase competitive advantage Competitive advantage can be achieved through environmental accountability (Bansal and Roth,
2000). Through reporting, firms are able to show their commitment towards the environment and as
such gain a real advantage in terms of market share over competitors that do not exhibit any such
practice.
Stakeholder activism
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Pressure groups such as customers, environmental groups, investors, and employees are said to be
well aware of the environmental performance of different firms; they are interested in knowing how
natural resources are being used and, if need be, take action against organisations which they believe
are environmentally irresponsible (Dechant et al., 1994).
Cost savings As part of CR reporting, companies have to assess their environmental performance. This process
allows management to identify inefficiencies in operations and spot areas to improve. In doing so,
they may identify opportunities for cost savings (UNDSD, 2001).
Attract personnel Environmentally-aware corporations are more able to attract quality staff. The workforce usually
demonstrates greater loyalty and job satisfaction in a business which is embracing environmental
protection. An annual study of the top management graduates in European countries has graphed the
increase of green criteria over the past decade. The environment is currently positioned among the
four most significant factors for these former students (Management Development Review, 1997).
Similarly, a study conducted by Simms (2002) found that 88 percent of British businesses believe that
social responsibility of the enterprise will be more important in the future in the recruitment and
retention of employees.
Good corporate governance Corporate governance is the mechanism by which organisations are directed and controlled. Good
governance makes sure that the business environment is reasonable and transparent and that
corporations can be held accountable for their activities. Disclosure of green information forms part of
sound corporate governance. For instance in section 7 of the Code of corporate governance (2004)
which deals with Integrated Sustainability Reporting, it is stated that:
“Every company should regularly report to its stakeholders on its policies and practices as regards to
ethics, environment, health and safety and social issues.”
The importance of the environment is highlighted as it states that:
“Mauritius’ smallness brings with it a fragile ecosystem. This means that corporations need to pay
special attention to the environmental aspects of corporate governance.”
Contribute to sustainable development Sustainability or sustainable development highlights environmental and society stewardship (Porter
and Kramer, 2006). It is concerned with meeting the present needs of the community without
compromising future generations to do so (WCED, 1987). Indexes, such as the Dow Jones
Sustainability Indexes, help to assess sustainable performance of companies by ranking them on the
basis of their economic, environmental and social performance.
Medium for environmental reporting Various medium are used by companies to convey social and environmental information to
stakeholders. The annual report remains the most widely used corporate communication tool and
probably the most important document in terms of the way an organization constructs its own social
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imagery to all stakeholders (Grey et al., 1995). The importance of the annual report in disseminating
environmental information is reinforced by the research of Deegan and Rankin (1997) who revealed
that 68 percent of the target population in Australia looked for environmental data from the annual
report in the first place compared to 43 percent from other sources. This can be explained by the fact
that the annual report holds a degree of credibility which other sources do not possess (Neu et al.,
1998). Miles et al., (2002) identified two key drivers for deciding to include social issues in the
annual report, namely: Corporate governance pressure to show how environmental risk is being
managed and transparency (reporting on CSR issues in an open and honest fashion). The location of
green disclosures in the annual report has also been subject to various researches. The common place
for environmental disclosures, within the annual report are the financial statements, notes to the
financial statements, corporate governance and director’s report (Gray et al., 1995). Studies by
Roberts (1992), Feedman and Jagi (1986) concluded that the main communication medium is the
annual report. Disclosure of environmental information is mainly qualitative and so will not be found
in the financial statements section of annual report but in other parts of the annual report (Gray et al.
1995).
Recently the internet has gained popularity as medium to communicate with stakeholders and
disclose social and environmental information (Cooper, 2003) but firms have not yet taken advantage
of its full potential as a communication tool (Bronn, 2004). Benefits of using the internet over
traditional communication methods include cost, the timely and interactive nature of the information.
Additionally, companies can disseminate information to various stakeholders and receive feedback
from them (Branco and Rodriguez, 2006). A variety of media including employment brochures,
advertisements and product labelling are also used to disclose social and environmental information
(Spence and Gray, 2007; Fallan and fallan 2009). Zehgal and Ahmed (1990) studied the use of other
media by analyzing advertisements and company brochures used by banks and petroleum companies.
They concluded that brochures are not widely used to disclose social information while advertisement
is ‘not a major means’.
Barriers to environmental reporting Measurement problem KPMG (2005) argue that the measurement of social and environmental performance is rather a
complex task. Besides, it has been observed that there is difficulty in measuring environmental costs
and benefits objectively. Conventional accounting system allocates many of the green costs to general
overhead accounts and thus, some less tangible environmental costs remain hidden from management
(UNDSD, 2001). This problem is particularly due to the fact that to date, no specific accounting
standard has been developed to deal with environmental matters but there are provisions made such as
those in the IAS 37- Provisions, Contingent Liabilities and Contingent Assets that provide some
guidelines relating to the subject. Le Meridien Hotel, Mauritius, 24-27 August 2010
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Lack of consistency and comparability There is actually no disclosure technique or proper standardisation of environmental reports and this
usually result in diverse reports from different corporations (Souther,1999). In other words, it
produces a lack of consistency and comparability. Such ‘lacuna’ has restricted the ability of the
stakeholders to use the information for decision making purposes (O’Rourke, 2004).
Expose to criticism Companies that publish environmental information are expected to face criticism which represents
potential cost in terms of public reactions to firms’ disclosures. Costs also seem to rise as reporting
becomes more thorough and comprehensive (O’Rourke, 2004). These costs generate considerable
incentives for organisations to release CR reports that are purely public relation tools or simply to
avoid reporting. In addition, firms may be unwilling to disclose environmental information if it is
confidential data which can be used by their competitors.
Lack of government policy on the issue Environmental reporting is basically a voluntary disclosure (Shivaji and Subramaniam, 2008).
Governments of different countries are trying to bring their contribution by inducing businesses to
disclose environmental information, legal requirements on the issue being relatively limited.
Profit motive Corporations usually have profit maximisation at the top of their objectives. In fact, Friedman (1970)
stated that a firm’s sole responsibility is to increase returns. As such the natural environment is not
always relevant to management except if influential stakeholders use their power to back it or if the
company is embracing a green orientation (Driscoll and Starik, 2004).
Cost v benefits Disclosure of information involves a cost so the benefits of doing so must outweigh the cost (Ness and
Mirza, 1991). A study by Turner (2004) conducted in Australia concluded that additional cost and
resources is the greatest barrier to sustainability reporting.
Voluntary v/s mandatory reporting There have been various debates on whether the decision to disclose the firms’ environmental impacts
should be left in the hands of businesses or be put in those of the government. Would it be wiser or
imprudent to let companies decide on such an issue? For a long time disclosure of environmental
information has been voluntary, recently a wave towards mandatory reporting has started blowing. In
Denmark disclosure of CSR information is mandatory in the annual report for certain companies as
from beginning of 2010. French companies have had to include social and environmental information
since 2001 while similar reporting requirements have been in place since late 2007 for UK companies
(Business and the Environment, 2009).
Voluntary disclosure
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The voluntary approach to environmental reporting asserts that corporations will meet the requests of
their stakeholders without any legislative instructions (Maltby, 1997). It is argued that this system
would persuade better corporations to attain best practice and that market pressure will induce
companies to disclose environmental information (Mitchell et al., 2006). In the same line, research
undertaken by Fallan and Fallan (2009) indicates that Norwegian companies will voluntarily satisfy
the stakeholders’ requirements regarding environmental information. Besides, it has been argued that
firms will make sure that their environmental disclosures and performances are sufficient to supply
appropriate information to relevant audiences (Wilmhurst and Frost, 2000). Organisations favour
voluntarism because it is believed that environmental regulations inflate costs (Porter and van der
Linde, 1995). For instance, mandatory disclosure may expose firms to environmental costs like those
incurred when not complying with environmental laws.
Mandatory disclosure Advocates of regulated environmental information declare that a minimum of information needs to be
‘compulsory’ (Fallan and Fallan, 2009). This will provide a basic standard for reporting as voluntary
disclosures tend to create diverse reporting practices which lead to difficulty in comparisons.
Mandatory reporting requirements contribute in increasing corporate environmental disclosures. A
review of annual reports after the introduction of mandatory environmental reporting guidelines in
Australia showed a significant increase in the number of companies reporting and the level of
information provided on environmental performance compared to the pre-introduction period (Frost,
2007). Moreover, the quality of environmental information published is also positively affected by
mandatory reporting and this was evidenced through research undertaken by Bebbington (1999) in
Denmark.
Statutory environmental disclosures usually motivate companies to comply with regulatory
regimes (Mobus, 2005) as these forms of publication place reporting firms under increased scrutiny
(Cowan and Gardenne, 2005). As such, compulsory reporting permits stakeholders to obtain a more
objective view of corporate environmental performance compared to voluntary reporting, which
depends largely on the discretion of the managers. Thus, more mandatory disclosures will probably
result in more transparent reports (Shivaji and Subramaniam, 2008).
Nevertheless, mandatory reporting cannot prevent the tactical use of voluntary corporate
disclosures to disseminate information aimed at promoting the firm’s image (Larrinaga et al., 2002).
Thus, it can be said that statutory environmental disclosure can act as a potential tool for counter-
balancing the voluntary disclosure system.
Doane (2002) states that the market does not provide sufficient incentives for companies to
report CSR information on a voluntary basis. She puts forward the following reasons for the
introduction of mandatory social and environmental reporting: the market does not reward transparent
companies and penalize those who are not; there is no way of enforcing voluntary codes; if all
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companies are required to report on social and environmental issues this will lead to a level playing
field in terms of cost.
Methodology In our research, unlike previous studies (Gray et al. 1995, Snider et al. 2003) the methodology did not
involve content analysis but a survey. This approach is justified by the need to explore the incentives
and barriers for environmental reporting and to obtain the opinion of respondents about mandatory
and voluntary reporting. The survey was carried on companies listed on the official market of the
Stock Exchange of Mauritius (SEM). The main reasons for targeting companies listed on the stock
exchange are: firstly, they are required to follow the Code of Corporate governance for Mauritius
which states that they should report on their policies and practices concerning issues such as ethics,
environment, health and safety and social issues and secondly Section 75 of the Financial Reporting
Act (2004) amended in 2009 requires listed companies to present a corporate governance section in
the annual report. Out of 46 companies listed on the SEM, mutual funds (8) were excluded as their
activities were judged as having (seemingly) no impact on the environment.
A questionnaire was sent to the remainder 38 companies via the internet. Despite several
reminder telephone calls only 22 companies responded positively giving a response rate of around 58
percent. The questionnaire was pre-tested with a few people either working in the field of CSR or
accountants responsible for CSR reporting to ensure that the wording, length, format and sequencing
were appropriate so as to increase the validity of the data. It included 4 sections. The first section was
used for reporting the business profile. The second section reported the medium used for
environmental reporting. The third part reported the motives and obstacles of environmental
reporting and the last one considered the perception of respondents about voluntary and mandatory
environmental reporting. Questions were adopted from previous researches O’Rouke (2004); KPMG
(2005); Fallan and Fallan (2009).
Analysis and findings
Sector of operation and respondents The highest proportion of respondents came from Investments and Banking and financial services
sectors followed by Commerce. It is worth mentioning that all firms surveyed in the Banking and
financial services sector responded positively. Sugar and Transport are the least represented with 4.5
percent each. None of the Hotel and Leisure and Construction firms responded to the survey and will
therefore not be considered for the analysis.
Take in Figure 1 about here Figure 1: Response rate in the different sectors
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Reporting on the Environment Figure 2 shows that more than half of the sample taken (63.6%) is involved in reporting
environmental information but 36.4% of the firms still do not engage in such activity. The results
demonstrate that most listed companies in Mauritius are conscious of the importance of green issues.
Hence, this supports what Diner et al., (2006) stated; that the rising concern for environmental matters
around the world induced organisations to focus on socially responsible behaviours.
Take in Figure 2 about here
Figure 2: Reporting Environmental Information
Medium used to disclose Environmental Information As depicted in figure 3, 78.6% of the listed companies use the annual report as a means for green
disclosures, 64.3% use stand alone report, 57.1% rely on internet web pages, 50% adopt company
brochures, 50% choose advertisements and 14.3% use other modes for environmental reporting. The
diagram confirms that annual report is still regarded as the main communication means for
corporations and, this is consistent with the findings of Gray et al., (1995). However, as regards the
use of stand alone reports the findings are in contradiction with the results of a survey conducted by
CorporateRegister.com which found that stand alone environmental reports account for less than 15%
of the total number of reports published in the UK in 2006 (ACCA, 2007).
Take in Figure 3 about here
Figure 3: Medium used to disclose Environmental Information
Section of the annual report used for reporting Environmental Information As shown in Figure 4, 70% of the respondents replied that environmental information appears in the
corporate governance section of the annual report, 20% said that they disclose it in the section of
notes to the accounts, 10% declared that it is recorded in the financial statements and another 10%
stated that the company publishes it in the director’s report.
Gray et al. (1995) mentioned that in earlier studies, most of the data about the environment
were found in sections other than in the financial statements; the above findings somehow approved
what was observed in previous researches. It is worth mentioning that there are no strict rules as to
which part of the annual report should contain environmental information, the preference for the
corporate governance section might be due to the requirement of the Financial Reporting Act (2004)
amended in 2009 which requires all listed companies to follow the Code of corporate governance on a
comply or explain basis. As per Section 8.4 of the Code, there should be a separate corporate
governance section in the annual report.
Take in Figure 4 about here
Figure 4: Medium used to disclose Environmental Information
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Motivations for Environmental Reporting Motivations for environmental reporting are many and vary across countries. The findings of our
survey show that the most important motivations for listed firms to engage in environmental reporting
are: it can contribute towards sustainable development of the country; to be more transparent and it is
the ethical duty of the company to behave in a socially responsible manner. The least motivating
factors were found to be: cost savings which can result by identifying inefficiencies in assessing
environmental performance, attracting personnel which might be explained by the fact that ‘green’
behaviour is not yet instilled in the Mauritian culture and finally risk management.
Take in Table 1 about here
Table 1: Medium used to disclose Environmental Information
Using the Principal Component Analysis (PCA), the number of variables used to capture the
respondents’ motivation to ER was reduced to three components, as named in Table 2. After a number
of runs, three clear factors emerged based on their individual communalities and factor loadings. The
main drivers to ER were grouped as improve company image, competitive edge and compliance. The
consistency of the items included under each component were verified using the Cronbach’s alpha
reliability test and the values obtained confirmed same and it was therefore safe to used the factor
scores in future analysis. Initial statistics (showed below the table) suggested that the variables would
factor well. The varimax rotated factor loadings show variables clustering as predicted.
Take in Table 2 about here Table 2: RCM of Respondents’ Motivations for Environmental Reporting
They accounted for 78 percent of total variance and with eigen values greater than 1. One
variable, namely economic performance had to be eliminated in the final model since it was not
loaded adequately into one of the components. Each variable had its highest loading on the
component it conceptually belongs to and variables with side-loadings of .40 or less were suppressed.
The final model was found to be an appropriate factor-analytic model as indicated by Barlett’s Test of
Sphericity, the test for communality and except for the Kaiser-Meyer-Olkin measure of sampling
adequacy showing only a low statistic (.373). However, this is explained by the small sample size.
Barriers to Environmental Reporting As observed in Table 3, lack of government policy as regards environmental reporting, lack of
consistency and comparability of environmental information and cost in terms of time, money and
other resources are considered to be the main barriers to environmental reporting. This is consistent
with the findings of Turner (2004). On the other hand, issues pertaining to disclosure of confidential
information and being exposed to criticism were found to be the least disturbing factors in disclosing
environmental information.
Le Meridien Hotel, Mauritius, 24-27 August 2010 Take in Table 3 and 4 about here
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Table 3: Barriers to Environmental Reporting
Table 4: RCM of Respondents’ Barriers to Environmental Reporting
These variables were grouped into three components using the PCA and are labeled as
Confidentiality, Lack of guidelines and Usefulness of the report. Table 4 shows the variables falling
under each component with their respective factor loadings. The various statistics demonstrate the
adequacy and reliability of the model. The confidentiality component includes disclosure of
confidential data and exposure to criticism. The internal consistency of the individual variables falling
onto one component was performed using the Cronbach’s alpha reliability test. All the three
components have a value of .7 and above, thus confirming the validity of the model.
Reporting- Voluntary or mandatory?
From table 5, it can be seen that voluntary disclosure is mainly favoured compared to mandatory
disclosure despite the fact that environmental reporting is mandatory for listed companies.
Proponents of mandatory reporting come from the financial services and investment sectors. These
are sectors which are highly regulated whereby the regulating authorities can impose additional
guidelines in addition to legal requirements which might be the reason for a preference for mandatory
reporting. All other sectors are for reporting on a voluntary basis. A significant statistical difference
between the sectors in which firms operate and the preference for mandatory/voluntary reporting has
been noted.
Take in Table 5 about here
Table 5: Voluntary or Mandatory*Sectors of Operation cross tabulation
Reasons for favouring Voluntary reporting or Mandatory reporting It can be observed from table 6 that the main reasons behind the choice of voluntary disclosures are:
costs not being inflated and the belief that reporting should stay under the entire discretion of the
company. Cronbach’s alpha equals 0.843 producing in this way a high reliability index. The main
reasons put forward for favouring mandatory reporting are: it provides a basic standard for reporting
and it motivates companies to comply with regulatory regimes. On the other hand issues like
enhancing the quality of environmental information and objectivity in providing a clear view of
corporate environmental performance are the least favoured arguments for environmental information
to be mandatory. The Cronbach’s alpha reliability test is high enough to support this inference.
Take in Table 6 and 7 about here
Table 6: Reasons for favouring Voluntary Reporting
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Table 7: Reasons for favouring Mandatory Reporting
Can Environmental Reporting contribute to sustainable development of Mauritius? Table 8 shows that the majority of respondents admit that environmental reporting can positively
contribute to sustainable development. All the CSR managers surveyed and a great majority of
accountants (90.1%) find a link between environmental reporting and sustainable development. The
fact that these people are involved in either the management of CSR funds or reporting of CSR related
activities could be a possible explanation for this response. However, 16.7% of ‘other’ is unsure of the
contribution of environmental reporting towards sustainable development while 9.1% of accountants
totally disagree that environmental reporting can help towards sustainable development of the
country. It should be noted however, that the results are not statistically significant.
Take in Table 8 about here
Table 8: Contribute to sustainable development of Mauritius * Position in firm cross tabulation
Conclusion and Future research
The overall purpose of the study was to gain an understanding of the motives and obstacles faced by
listed companies in the reporting of environmental information. Now that all listed companies have to
include a corporate governance section in their annual report whereby environmental information is
most likely to find its way, the paper sought the opinion of respondents as to whether they are
agreeable to disclose environmental information on a voluntary or mandatory basis?
The annual report was found to be the most common medium amongst listed companies, used
to disclose environmental information followed by stand alone report and internet web pages. The
corporate governance section is the main repository for environmental information within the annual
report. The key motivations to report environmental information are the ability to contribute to
sustainable development and to be more transparent while the main barriers identified are lack of
consistency and comparability of environmental information and lack of government policy regarding
the issue. Voluntary reporting is favoured to Mandatory reporting by the majority of respondents.
The results must, however, be interpreted with caution keeping in mind the limited sample
size and response rate. Further research could compare the level of disclosures in the pre and post
periods of the implementation of the Finance Act 2009 regarding mandatory contribution of profitable
local companies towards CSR.
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List of Figures
Figure 1: Response rate in the different sectors
Figure 2: Reporting Environmental Information
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Figure 3: Medium used to disclose Environmental Information
Figure 4: Section of annual report used for reporting Environmental Information
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List of Tables
Table 1: Motivations for Environmental Reporting Mean Std. Deviation Economic performance 1.79 .579Compliance with environmental regulation 1.57 .852
Ethical duty 1.21 .426Improve or maintain good reputation 1.64 1.082Attract ethical investors 2.00 .784Increase competitive advantage 1.86 .770Stakeholders activism 1.71 .611Cost savings 2.93 1.072Attract personnel 2.64 .929Preserve legitimacy of the company 1.64 .633Manage relationship with stakeholders 1.71 .611To be more transparent 1.36 .633Risk management 2.57 .938Contribute to sustainable development 1.07 .458
Table 2: Rotated Component Matrix of Respondents’ Motivations for ER
Component
Motivation to ER Improve Co.
Image Competitive
Edge Compliance
H2
Compliance with environmental regulation .893
.831
Ethical duty .915 .848 Improve or maintain good reputation .812
.733
Increase competitive advantage .435 .664
.649
Stakeholders activism .862 .850 Cost savings .810 .812 Attract personnel .798 .749 Preserve legitimacy of the company .790 -.407
.831
Manage relationship with stakeholders .899
.846
To be more transparent .886 .808 Risk management .786 .636
Eigenvalue 4.177 2.518 1.897
% of Variance explained 37.97 22.90 17.24
Cronbach’s Alpha .884 .784 .716
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. Percentage of variance explained 78; Factor loadings with values less than 0.4 are suppressed.
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Kaiser-Meyer-Oklin Measure of Sampling adequacy = .373; Barlett’s Test of Sphericity = 97.223 (.000)
Table 3: Barriers to Environmental Reporting
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Mean
Std.
Deviation
Measurement problem 1.59 .796 Lack of consistency and comparability 1.55 .739 Expose to criticism 2.36 1.432 Confidential data 2.64 1.093 Lack of government's policy on the issue 1.45 .671 Cost in terms of time, money and other resources 1.59 .734 Not enough demand for environmental information 1.73 1.032 No convincing proof to show that benefits of producing environmental reports exceed their costs
1.73 .767
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Table 4: Rotated Component Matrix of Respondents’ Barriers to Environmental Reporting
Component Communalities H Barriers to Environmental Confident
iality Lack of
guidelines Usefulness
Expose to criticism .895 .840
Confidential data .804 .764
Lack of consistency and comparability .834 ,811
Lack of government's policy on the issue
.914 .858
Not enough demand for environmental information
.921
.863
Benefits of producing environmental reports not clear .777 .802
Usefulness of environmental report remains unclear
.809 .831
Eigenvalue 1.195 .896 3.768
% of Variance explained 17.08 12.81 52.54
Cronbach’s Alpha .737 .770 .871
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. Percentage of variance explained 82; Factor loadings with values less than 0.4 are suppressed. Kaiser-Meyer-Oklin Measure of Sampling adequacy = .691 Barlett’s Test of Sphericity = 67.669 (.000)
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Table 5: Voluntary or Mandatory*Sectors of Operation cross tabulation
Sectors organisations are operating in
Total
Banking,
insurance
and other
financial
services Commerce Investments Manufacturing Sugar Transport
Voluntary
or
mandatory
reporting
Voluntary
reporting
33.3% 100.0% 33.3% 100.0% 100.0% 100.0% 63.6%
Mandatory
reporting
66.7% .0% 66.7% .0% .0% .0% 36.4%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Pearson Chi-Square Value = 10.476; df = 5; Sig. Level = .063
Table 6: Reasons for favouring Voluntary Reporting
Statements Strongly
Agree (Freq)
Agree (Freq)
No opinion (Freq)
Disagree (Freq)
Strongly Disagree
(Freq) Mean
Costs are not inflated 7 6 2 4 3 2.55Reporting should remain under discretion of the company
7 8 3 2 2 2.27
Voluntary disclosures persuades better companies to achieve best practices
5 8 3 3 3 2.59
Market pressure will force lagging firms to disclose environmental information
3 6 7 4 2 2.82
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International Research Symposium in Service Management ISSN 1694-0938
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Table 7: Reasons for favouring Mandatory Reporting
Strongly agree (Freq)
Agree (Freq)
No opinion (Freq)
Disagree (Freq)
Strongly disagree (Freq)
Mean (Freq)
Stakeholders have the “right to know” 7 3 4 5 3 2.73Provide basic standard for reporting 5 4 8 3 2 2.68Allow assessment and benchmarking of business’s performance
3 6 8 3 2 2.77
Quality of environmental information is enhanced
4 6 6 2 4 2.82
Motivate companies to comply with regulatory regimes
9 5 4 2 2 2.23
Obtain more objective view of corporate environmental performance
7 2 6 2 5 2.82
Table 8: Contribute to sustainable development of Mauritius * Position in firm
Contribute to sustainable development of Mauritius * Position in firm Position in firm
Total Accountant CSR manager Accounts clerk Other
Contribute to sustainable development
Strongly agree
% Position 54.5% 100.0% .0% 66.7% 63.6%
Agree % Position 36.4% .0% 100.0% 16.7% 27.3%
No opinion % Position .0% .0% .0% 16.7% 4.5%
% Position 9.1% .0% .0% .0% 4.5%
Total 100.0% 100.0% 100.0% 100.0% 100.0% Pearson Chi-square value = 8.897; DF = 9 ; Sig. Level = .447