Advances in environmental research

Techno-Press (테크노프레스)
권호 표지
DOI QR코드

DOI QR Code

Climate change mitigation information disclosure of oil & gas sector in India: A perception analysis

  • Received : 2021.02.27
  • Accepted : 2021.09.09
  • Published : 2021.06.25
⟨ Previous Next ⟩

Abstract

Greenhouse gas (GHG) information of business activities disclosed in corporate annual reports lack consistency in content due to variability of perceptions on environmental issues among company executives. Prior studies examined factors affecting environmental disclosures by comparing different firm characteristics, but no reference of executives' perceptions on climate change disclosures was identified in the existing literature. This study aimed at investigating perceptions of executives from 26 listed oil and gas (O&G) companies on climate change mitigation (CCM) information disclosures in annual reports. A questionnaire was constructed referring to the sustainability reporting framework of International Petroleum Industry Environmental Conservation Association (IPIECA) to receive responses from executives of the sample O&G companies. The study revealed that the executives of O&G companies across different value chains perceived materiality for disclosure for all the four climate change indicators- GHG emission, energy use, renewable energy, and flared gases. Significant differences in mean scores of CCM information disclosures existed within four groups of executives holding different positions as well as executives who had different levels of knowledge about annual reports. This study puts forward that climate change mitigation disclosures in annual reports gets affected by level of positions held by executives in their respective companies and their level of knowledge of annual report.

Keywords

References

  1. Akbas, H.E. and Canikli, S. (2019), "Determinants of voluntary greenhouse gas emission disclosure: An empirical investigation on Turkish firms", Sustainability, 11(1), 1-24. https://doi.org/10.3390/su11010107.
  2. Al-Khater, K. and Naser, K. (2003), "Users' perceptions of corporate social responsibility and accountability: evidence from an emerging economy", Manage. Account. J., 18(6-7), 538-548. https://doi.org/10.1108/02686900310482678.
  3. Ane, P. (2012), "An assessment of the quality of environmental information disclosure of corporation in China", Syst. Eng. Proced., 420-426. http://doi.org/10.1016/j.sepro.2012.04.064.
  4. Bach, M. (2017), "Is the oil and gas industry serious about climate action?", Environ. Sci. Policy Sust. Develop., 59(2), 4-15. https://doi.org/10.1080/00139157.2017.1274579.
  5. Batra, G.S. (2007), Environment Management and Corporate Disclosure, Deep and Deep Publications, New Delhi, India.
  6. Berthelot, S. and Robert, A.M. (2011), "Climate change disclosures: An examination of Canadian oil and gas firms", Issue Social Environ. Account., 5(2), 106-123. http://doi.org/10.22164/isea.v5i2.61.
  7. Boyle, B. and Depraz, S. (2006), "Oil and gas industry guidance on voluntary sustainability reporting", Proceeding of the SPE International Health, Safety & Environment Conference, Abu Dhabi, UAE, April.
  8. Broadstock, D., Collins, A., Hunt, L. and Vergos, K. (2018), "Voluntary disclosure, greenhouse gas emissions and business performance: Assessing the first decade of reporting", Brit. Account. Rev., 50(1), 48-59. https://doi.org/10.1016/j.bar.2017.02.002.
  9. Brown, N. and Deegan, C. (1998), "The public disclosure of environmental performance information - a dual test of media gaenda setting theory and legitimacy theory", Account. Buisness Res., 29(1), 21-41. https://doi.org/10.1080/00014788.1998.9729564
  10. Cherian, A. (2015), Energy and Global Climate Change, John Wiley & Sons, New Jersey, U.S.A.
  11. Choi, B., Lee, D. and Psaros, J. (2013), "An analysis of Australian company carbon emission disclosures", Pacific Account. Rev., 25(1), 58-79. https://doi.org/10.1108/01140581311318968.
  12. Choi, F.D. and Mueller, G.G. (1978), Corporate Disclosure Environment in India, In An Introduction to Multinational Accounting, Prentice Hall, New Jersey, U.S.A.
  13. Cormier, D. and Magnan, M. (2003), Does Disclosure Matter?, CA Magazine- Chartered Accountant, 136(4), 43-48.
  14. Cunha, D.R. (2017), "Environmental indicators of oil companies", Eur. J. Sci. Res., 146(4), 386 - 394.
  15. Deegan, C. and Gordon, B. (1996), "A study of the environmental disclosure practices of Australian corporations", Account. Business Res., 26(3), 187-199. https://doi.org/10.1080/00014788.1996.9729510.
  16. Deegan, C. and Rankin, M. (1999), "The environment reporting expectations gap: Australian evidence", Brit. Account. Rev.. 31(3), 313-346. https://doi.org/10.1006/bare.1999.0102.
  17. Elsakit, O.M. and Worthington, A.C. (2012), "The attitute of managers and stakeholders towards corporate social and environemntal disclsoure", Int. J. Economics Finance, 4(12), 240-251. http://doi.org/10.5539/ijef.v4n12p240.
  18. Elvidge, C.D., Bazilian, M.D., Zhizhin, M., Ghosh, T., Baugh, K. and Hsu, F.C. (2018), "The potential role of natural gas flaring in meeting greenhouse gas mitigation targets", Energ. Strategy Rev., 20, 156-162. https://doi.org/10.1016/j.esr.2017.12.012.
  19. Emam, E.A. (2015), "Gas flaring in industry : An overview", Petrol. Coal, 57(5), 532-555.
  20. Faisal, F., Andiningtyas, E.D., Achmad, T., Haryanto, H. and Meiranto, W. (2018), "The content and determinants of greenhouse gas emission disclosure: Evidence from Indonesian companies", Corporate Social Responsibil. Environ. Manage., 25(6), 1397-1406. https://doi.org/10.1002/csr.1660.
  21. Farmer, G.T. and Cook, J. (2013), Climate Change Science: A Modern Synthesis: Volume 1 - The Physical Climate, Springer Netherlands, Heidelberg, Germany. http://doi.org/10.1007/978-94-007-5757-8_22
  22. Freedman, M. and Jaggi, B. (2011), "Global warming disclosures: impact of Kyoto protocol across countries", J. Int. Financ. Manage. Account., 22(1), 46-90. https://doi.org/10.1111/j.1467-646X.2010.01045.x.
  23. Ghomi, Z.B. and Leung, P. (2013), "An empirical analysis of the determinants of greenhouse gas voluntary disclosure in Australia", Account. Financ. Res., 2, 110-127.
  24. Halimah, N.P. and Yanto, H. (2018), "Determinant of carbon emission disclosure at mining companies listed in Indonesia stock exchange", Proceeding of the 3rd International Conference on Economics, Business and Economic Education, Bali, Indonesia, October.
  25. Hapsoro, D. and Ambarwati. (2018), "Antecedents and consequences of carbon emissions' disclosure: case study of oil, gas and coal companies in non-annex 1 member countries", J. Indonesian Economy Business, 33(2), 99-111. https://doi.org/10.22146/jieb.28756
  26. Healy, P.M. and Palepu, K.G. (2001), "Information asymmetry, corporate disclosure, and the capital market: A review of the empirical review of litterarure", J. Account. Economics, 31(1-3), 405-440. https://doi.org/10.1016/S0165-4101(01)00018-0
  27. ICAEW (2015), Environmental issues and UK annual reporting; Institute of Chartered Accountants in England and Wales, London, U.K. https://www.icaew.com/.
  28. IPIECA (2011), Petroleum industry guidelines for reporting greenhouse gas emissions; IPIECA, London, U.K. http://www.ipieca.org/.
  29. IPIECA (2015), Issues and indicators: what to report; IPIECA, London, U.K. http://www.ipieca.org/.
  30. IPIECA (2020), Oil and gas industry guidance on voluntary sustainability reporting; IPIECA, London, U.K. http://www.ipieca.org/.
  31. Krejcie, R.V. and Morgan, D.W. (1970), "Determining sample size for research activities", Educ. Psychol. Meas., 30(3), 607-610. https://doi.org/10.1177/001316447003000308.
  32. Krishnan, R., Sanjay, J., Gnanaseelan, C., Mujumdar, M., Kulkarni, A. and Chakraborty, S. (2020), Assessment of Climate Change over Indian Region: A report of the ministry of earth sciences (MOES), government of India. Springer Nature, London, U.K.
  33. Leeson, D., Dowell, N.M., Shah, N., Petit, C. and Fennel, P.S. (2017), "A Techno-economic analysis and systematic review of carbon captureand storage (CCS) applied to the iron and steel, cement, oil refiningand pulp and paper industries, as well as other high purity sources", Int. J. Greenhouse Gas Control, 61, 71-84. https://doi.org/10.1016/j.ijggc.2017.03.020.
  34. Liao, L., Luo, L. and Tang, Q. (2014), "Gender diversity, board independence, environmental committee and greenhouse gas disclosure", Brit. Account. Rev., 47(4), 409-424. https://doi.org/10.1016/j.bar.2014.01.002.
  35. Lungu, C.I., Caraiani, C., Dascalu, C., Guse, R. and Shahlian, D. (2009), "Corporate social and environemntal reporting: Another dimesnion for accounting information", SSRN, 1447247. http://doi.org/doi.org/10.2139/ssrn.1447247.
  36. Maclagan, P. (1999), "Corporate social responsibility as a perspective process", Business Ethics: Eur. Rev., 8(1), 43-49. http://doi.org/https://doi.org/10.1111/1467-8608.00124
  37. Matta, R., Akhtar, J. and Malarvizhi, P. (2019), "Managers' perception on factors impacting environmental disclosure", J. Management, 6(2), 219-229.
  38. Ooi, S.K. and Amran, A. (2018), "Enabling climate change reporting in Malaysia", World Rev. Entrepreneurship, Manage. Sust. Develop., 14(4), 507-526. https://doi.org/10.1504/WREMSD.2018.093591.
  39. Owen, D.L., Swift, T. and Hunt, K. (2001), "Questioning the role of stakeholder engagement in social and ethical accounting, auditing and reporting", Accounting Forum, 25(3), 264-282. https://doi.org/10.1111/1467-6303.00066
  40. Pahuja, S. (2009), Environmental Accounting and Reporting: Theory, Law and Empirical Evidence, New Century Publications. New delhi, India.
  41. Pillai, L.N., Ngangan, K. and Mellam, B.G. (2014), "A study on the attitute of accountants towards environmental disclosure in Papua New Guinea", Proceeding of 4th Annual International Conference on Accounting and Finance, Phuket, Thai-land, April. http://doi.org/10.5176/2251-1997_AF14.54
  42. Pitrakkos, P. and Maroun, W. (2020), "Evaluating the quality of carbon disclosures", Sustainabil. Account. Manage. Policy J., 11(3), 553-589. https://doi.org/10.1108/SAMPJ-03-2018-0081
  43. Ramadhan, D.S., Anshor, A., Iswati, S. and Herianingrum, S. (2018), "Analysis of The Disclosure of Greenhouse Gas Emissions and Environmental Performances in Listed Firms at The Jakarta Islamic Index", Proceeding of the International Conference Postgraduate School Universitas Airlangga, Implementation of Climate Change Agreement to Meet Suistainable Development Goals, Surabaya, Indonesia, August.
  44. Rankin, M., Windsor, C. and Wahyuni, D. (2011), "An investigation of voluntary corporate greenhouse gas emissions reporting in a market governance system - Australian evidence", Account. Audit. Accountabil. J., 24(8), 1037-1070. https://doi.org/10.1108/09513571111184751.
  45. Rosa, F.S., Ensslin, S.R., Ensslin, L. and Lunkes, R.J. (2012), "Environmental disclosure management: a constructivist case", Manage. Decision, 50(6), 1117-1136. https://doi.org/10.1108/00251741211238364.
  46. Shodiq, M.J. (2017), "Do the CSR mission and emissions disclosure characterize the company's success?" Indonesian Manage. Account. Res., 16(1), 19-34. http://doi.org/10.25105/imar.v16i1.7872.
  47. Sudibyo, Y.A. (2017), "Carbon emission disclosure: does it matter", Proceeding of the 4th International Seminar on Sustainable Urban Development, Jakarta, Indonesia, August.
  48. Swift, K.D. (2019), "Accounting for greenhouse gas emissions", Manage. Account. Quarterly, 20(2), 1-9.
  49. Ten, E.E. (2009), "Can stakeholder theory add to our understanding of Malaysian environmental reporting attitudes?", Malaysian Account. Rev., 8(2), 85-110. http://doi.org/10.24191/mar.v8i2.259.
  50. Trueman, B. (1986), "Why do managers voluntarily release earnings forecast?", J. Account. Economics, 8(1), 53-71. http://doi.org/https://doi.org/10.1016/0165-4101(86)90010-8.
  51. UNFCCC (2020), The Paris Agreement; United Nations Climate Change, Bonn, Germany. https://unfccc.int/files/meetings/paris_nov_2015/application/pdf/paris_agreement_english_.pdf.
  52. Waxman, A.R., Khomaini, A., Leibowicz, B.D. and Olmstead, S.M. (2020), "Emissions in the stream: estimating the greenhouse gas impacts of an oil and gas boom", Environ. Res. Lett., 15(1), 014004. http://doi.org/https://doi.org/10.1088/1748-9326/ab5e6f.
  53. Wilmshurst, T.D. and Frost, G.R. (2000), "Corporate environmental report: A test of legitimacy theory", Account. Audit. Accountabil. J., 13(1), 10-26. http://doi.org/https://doi.org/10.1108/09513570010316126.
  54. World Energy Data (2021), World Total Energy Supply; Total Energy Supply (TES). https://www.worldenergydata.org/world-total-energy-supply/
  55. Xia, Q., Wang, H., Liu, X. and Pa, X. (2020), "Drivers of global and national CO2 emissions changes 2000-2017", Climate Policy, 21(5), 604-615. http://doi.org/https://doi.org/10.1080/14693062.2020.1864267.