Essay on Environmental Risk Disclosure: Voluntary Versus Mandatory

Paper Type:  Course work
Pages:  7
Wordcount:  1740 Words
Date:  2021-06-03
Categories: 

The title of the research paper clearly spells out to the reader what the paper is all about. The central aspect of the research is Environmental Risk Disclosure. However, there are two sides of it; there is the voluntary and the mandatory disclosure. The two methods are used in different countries globally and are both effective in their own respect. By highlighting this in the title, the readers attention is directed towards an analytical review of both forms of disclosures and a possibility of eventually determining the best approach.

Trust banner

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Overview of the dissertation

The dissertation, first of all, seeks to define what Environmental Risk Disclosure is CITATION McC14 \l 1033 (Amanda). Summarily, it is the issuing of a report by companies that in one way or another are capable of affecting the environment. The report points out the extent to which these companies activities affect the environment. If the effects are drastic, the companies also ought to make known the steps they are taking to minimize the adverse environmental impact.

It is important to look into this particular area as industrialization and globalization are here to stay CITATION Ped14 \l 1033 (Cavalcanti). The above-mentioned activities pause both potential and actual threats to the environment. Consequently, the shareholders and stakeholders in companies and organizations need to hold these organizations environmentally accountable. The only way they can achieve this is if they have detailed reports on the particulars of the environmental risks.

In determining the best approach for Environmental Risk Disclosure, German and UK make for a great comparison. German is known to have a mandatory disclosure policy whereas the UK has a voluntary one CITATION Bar11 \l 1033 (Barbu , Dumontier and Niculae). In comparing the two countries disclosure methods, one may come up with the best approach.

Industrialization has been witnessed profoundly in the 21st century where more emissions have been let out into the atmosphere to a point where states would make carbon trade so as to minimize the impact the emissions have CITATION Lov14 \l 1033 (Simone). German and UK are globally recognized as developed countries with companies operating across the world and a number within the European Union CITATION Ien12 \l 1033 (Ionel-Alin). The states are also known for the manufacturing and assembling of vehicles. The need to have an environmental risk disclosure then becomes necessary where stakeholders and shareholders of various companies are recipients of the information that is provided to the public.

The quality of environmental disclosures determines how stakeholders are empowered and become aware of environmental risks involved with the companies they associate with CITATION Thi14 \l 1033 (Jason). The information that is voluntarily provided to the respective people is something to dig deeper into and match the reality with theory. Coal is known to be a notorious pollutant yet countries use it.

Environmental reporting means that companies, in their reports make available to the public their environmental conservation approach. Companies, however, find themselves stuck on what information to omit or include in their reports.

Research Questions

In this research, I will seek to answer several questions

1) Why is environmental disclosure important? Is the disclosure just about giving information to the public or can the public actually use this information to hold companies accountable?

2) Is environmental disclosure a moral/ ethical issue or a legal issue? In cases where the disclosure is voluntary, do large companies have a moral obligation to make known these details? Is the moral obligation enforceable?

3) Should the size of an industry determine whether it should publish a disclosure report? Do bigger industries have a greater mandate than the smaller ones?

4) What impact does environmental disclosure have on potential investors, if any?

5) Which is the best way to present an Environmental Risk Disclosure report? Is it in a company financial report, an annual report or a separate company environmental report? Does the form of presentation determine how seriously an industry takes its environmental conservation responsibility?

6) Does giving discretion to the managers to determine what they will disclose undermine the integrity of the reports given? In instances where discretion is mandatory, should managers still have the leeway to withhold some information? Why should this information be withheld?

7) Which is the best policy to apply when it comes to environmental disclosure? Is it mandatory or voluntary? Should companies be penalized for not disclosing this information?

Aims of the Research Paper

My main aim in this paper is to critically assess the Environmental Risk Disclosure policies in German and UK and how the different approaches affect the countries national and international relations CITATION Env16 \l 1033 (Environmental Agency). I will also look at the impact of the disclosure in relation to businesses and investments.

Objectives

I will look to identify the laws that influence Environmental Disclosure in German and UK. Then look into recent official reports on how effective the laws have been in influencing the same. In line with this, I will also research into whether the disclosure reports if any, have aided in any way in bettering the environment of the said countries.

Secondly, I will look at the relationship between business investments and companies which release disclosure reports and those which dont CITATION Mic10 \l 1033 (Michelon). I will also look at the relationship between these countries and international organizations such as the United Nations Environmental Program and the United Nations Development Program CITATION Uni15 \l 1033 (United Nations). The question to be answered is whether there is any environmental obligation owed to these organizations by virtue of being member states.

Impacts of the Research

By carrying out this research, I intend to shed light on the importance of Environmental Risk Disclosure. Once its importance is understood by all the necessary stakeholders, it will be easier to have them agitate for policy review if need be. The main stakeholders, in this case, are the companies and organizations involved in possibly affecting the environment, the potential investors, international organizations as well as the local citizenry CITATION UND02 \l 1033 (UN DESA).

Bearing in mind that environmental issues affect all human beings, it is important to incorporate the views of the general public on the same issue. If possible, provide a platform in which they can also voice their concern over disturbing disclosure reports.

The research would also shed light on the issue of discretional reporting. The disclosure reports are meant to fully inform the stakeholders of an organizations undertakings CITATION Pau15 \l 1033 (Delia). Therefore, including a discretion raises doubt in whether the report is entirely truthful. In my opinion, which I will seek to back up, the discretional option should be done away with entirely.

Theoretical Framework

The Legitimacy theory defines the appropriateness or correctness of an organization that makes it socially accepted and appreciated CITATION Mou15 \l 1033 (Mousa and Hassan). The theory will be one of the main theories that will guide my research work. All companies, industries, and organizations have a form of social contract with the people. The theory will aid in outlining how best these institutions can fulfil their social contract when it comes to environmental responsibilities.

The Stakeholder theory, on the other hand, focuses on business management ethics CITATION Har13 \l 1033 (Harrison and Wicks). It focuses on the leadership of organizations and seeks to hold them accountable for decisions they make. The theory will also be highly featured in my research as I seek to provide insight on the role of institutional leaders especially in the publishing of the Environmental Risk Disclosure reports.

The Signalling theory defines the relationship between two parties in terms of the information shared CITATION Con11 \l 1033 (Connely, Certo and Duane). The theory is important in my research paper as it will provide a guideline on what should be done once an Environmental Risk Disclosure has been made. The theory will point out the responsibility of the recipients in this case and how they can use the information shared with them to conserve the environment. It will also shed more light on the issue of accountability.

Institutionally, all organizations have a corporate social responsibility. The organizations, therefore, need to deliver tangible economic, social and even environmental benefits to the stakeholders CITATION Hoh07 \l 1033 (Hohnen and Potts). In addressing the corporate social responsibility of industries, I will clearly bring out the importance of the Environmental Risk Disclosure. The institutional mandate emphasizes on a means of holding those responsible such as company managers accountable.

The above theories and institutional framework will be tested against existing the policies of Germany and the UK. The theories have been developed over time making them reliable and authentic especially when it comes to institutional conduct. I will contrast different views of the proponents of these theories to Environmental Risk Disclosure policies of the said countries. My main aim being to establish how much more effort the countries need to put to achieve most if not all what these theories envisage.

Conclusion

Environmental accountability is crucial in the sustenance of human life and life in general. With the rising threats of global warming and other threats caused by industrial emissions, it is important to have a clear guiding policy on how to deal with environmental issues. On the other hand, industrial products are necessary for day to day living. It is, therefore, the responsibility of policy makers and relevant stakeholders to harmonize the industrial needs and environmental conservation. Through this research, I hope to make a make a step closer to establishing the point of harmonization.

Works Cited

BIBLIOGRAPHY Amanda, McCluskey. Environmental Disclosure- Effective Risk Management and Exposure Mitigation. New York: Institutional Business , 2014.

Barbu , Elena, et al. Mandatory Environmental Risk Disclosures by Companies Complying with IAS/IFRS, The Case of French German and UK. London, 2011.

Cavalcanti, Pedro. Globalization and Industrial Revolution. Illinois: University of Illinois, 2014.

Connely, Brian, et al. "Signalling Theory: A review and Assesment." Journal of Management (2011): 39-67.

Delia, Paul. UNEP Report Seeks to Advance Environmental Disclosure in Sustainability Reporting . 16 November 2015. 17 February 2015.

Environmental Agency. Environmental Disclosures. November 2016. 2. 17 February 2017. <https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/290054/geho1106blol-e-e.pdf>.

Harrison, Jeffrey and Andrew Wicks. "Stakeholder Theory, Value and Firm Performance." Business Ethics Quarterly (2013): 97-124.

Hohnen, Paul and Jason Potts. Corporate Social Responsibility. Canada: IISD, 2007.

Ionel-Alin, Ienciu. "Analyze of The Environmental Risk Disclosure within European Countries." Journal of Knowledge Management, Economics and Information Technology (2012): 70-93.

Jason, Thistlewaite. The Environmental Risk Disclosure Regime; Navigating Complexity in Global Financial Market. New York: Centre for International Governance Innovation, 2014.

Michelon, Giovanna. Sustainability Disclosure and Reputation; A comparative Study. Padova: University of Padova, 2010.

Mousa, Gehan and Naser Hassan. "Legiti...

Cite this page

Essay on Environmental Risk Disclosure: Voluntary Versus Mandatory. (2021, Jun 03). Retrieved from https://midtermguru.com/essays/essay-on-environmental-risk-disclosure-voluntary-versus-mandatory

logo_disclaimer
Free essays can be submitted by anyone,

so we do not vouch for their quality

Want a quality guarantee?
Order from one of our vetted writers instead

If you are the original author of this essay and no longer wish to have it published on the midtermguru.com website, please click below to request its removal:

didn't find image

Liked this essay sample but need an original one?

Hire a professional with VAST experience!

24/7 online support

NO plagiarism