Environmental Accounting Disclosure Practices in Bangladesh and Its Impact on Investor Decisions

Document Type: Original Research


Department of Accounting and Information Systems, University of Dhaka, Shahbag, Dhaka, Bangladesh


The focus of this study is to identify the environmental disclosures made by Bangladeshi companies and analyze the overall disclosure practice of the countries’ industries. And also collect the investor’s feedback on whether or not environmental disclosure information is making a difference in their decision making process and their opinion about the company. For conducting the research, the study has used 5 sectors- Engineering, Pharmaceuticals, Food, Textile and Fuel and Power along with 10 companies with each stratum. This study has used the standard environmental disclosure index developed by prior researchers to show the volume of the selected companies’ environmental disclosures in the annual reports. To show the impact of the environmental disclosures on the investors’ decision, the study has conducted a survey among the investors. The study shows evidence that reinforces the fact that Bangladeshi companies are disclosing less environmental information than an ideal company should. Also there are lack of regulation and interest in disclosing proper information. Although by conducting a survey it was seen that majority of investors and probable investors are interested in these information and are supportive of eco-friendly companies.


Ahmed, K., and Nicholls, D. (1994), “The Impact of Non-financial Company Characteristics on Mandatory Compliance in Developing Countries: The Case of Bangladesh”, The International Journal of Accounting, 29(1), 60-77.
Ayuso, M. G. and Carlos. L. (2003). Environmental disclosure in Spain: Corporate characteristics and media exposure. Spanish Journal of Finance and Accounting; 115:184-214.
Beckerman, N. (1994). Sustainable development: is it a useful concept. Environmental Values 3:191-209.
Choi, J. S., (1998). An evaluation of the voluntary corporate environmental disclosures a Korean Evidence. Social and Environmental Accounting, 18(1): 2-7.
Christmann, P. (2000). Effects of “Best Practices” of environmental management on cost advantage: The role of complementary assets. The Academy of Management Journal, 43(4), 663-68
Clare B. Roberts, (1991) "Environmental Disclosures: A Note on Reporting Practices in Mainland Europe", Accounting, Auditing & Accountability Journal, Vol. 4 Issue: 3, 
Cooke, T. E. (1991), “An Assessment of Voluntary Disclosure in the Annual Reports of Japanese Corporations”, The International Journal of Accounting, 26, 174-189.
Cooke, T. E. (1992), “The Impact of Size, Stock Market Listing and Industry Type on Disclosure in the Annual Reports of Japanese Listed Corporations”, Accounting and Business Research, 22(87), 229-237.
Cormier, D T & Morgan, M (2004), “The impact of the web on information and communication modes: the case of corporate environmental disclosure”, International Journal of Technology Management, Vol. 27, No. 4, pp. 393-416.
Deegan, C. and M. Rankin., (1997). The Materiality of Environmental Information to Users of Annual Reports”. Accounting, Auditing and Accountability Journal, 10(4):562-583.
Deegan, C. and Samkin, G. (2009), New Zealand Financial Accounting, McGraw-Hill Australia Limited, North Ryde.
Deegan, C., (1999). Implementing triple bottom line performance and reporting mechanisms. CA Charter 70(4): 40-42.
Deegan, C., (2002). The legitimizing effect of social and environmental disclosures- a theoretical foundation. Accounting, Auditing and Accountability 15(3): 282-311.
DiMaggio, Paul J. and Walter W. Powell. (1983). “The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields.” American Sociological Review 48:147–60.
Dincer, I. and A. R, Marc, (1998). A worldwide perspective on energy, environment and sustainable development. International Journal of Energy Research. 22(1):1305-1321.
Dutta, P., & Bose, S. (2008). Corporate Environmental Reporting on the Internet in Bangladesh: An Exploratory Study. International Review of Business Research Papers, 4 (3), 138-150.
Elkington, J.  (1998).Cannibals with forks: 1he triple bottom line o/21" century business. Gabriela   Island, BC:  New Society Publishers.
Environmental accounting. (2018, February 05). Retrieved February 07, 2018, from https://en.wikipedia.org/wiki/Environmental_accounting
Gray, R., Kouhy, R., & Lavers, S. (1995). Corporate social and environmental reporting: A review of the literature and a longitudinal study of UK disclosure. Accounting, Auditing, and Accountability Journal, 8(2), 47-77.
Gray, R., Owen, D. and Adams, C. (1996), Accounting and Accountability: Change and Challenges in Corporate Social and Environmental Reporting, Prentice Hall, London.
Hamid, M.A.R.A. (2002), “Theoretical Framework for Environmental Accounting - Application on the Egyptian Petroleum Sector,” Presentation paper of the Ninth Annual Conference of the Economic Research Forum (ERF) 26-28 October 2002,American University in Sharja, United Arab Emirates, available at http://www.erf.Org.eg/9th annual conf/9th conference_main.php, accessed on 20.01.2018.
Hossain M, Islam, K and Andrew, J. (2006), “Corporate social and environmental disclosure in developing countries: evidence from Bangladesh”, Proceedings of the Asian Pacific Conference on International Accounting issues, Hawaii. University of Wollongong, Research Online, Faculty of Commerce - Papers Faculty of Commerce.
Hossain M. (2016), “Environmental Reporting Practices in annual Reports of selected pharmaceutical and chemical companies in Bangladesh”, International Journal of Business and Management Invention, 5(7), 20-28, Available in Online: www.iiste.org
Hughes, S.B., Anderson, A., & Golden, S. (2001). Corporate environmental disclosures: are they useful in determining environmental performance? Journal of Accounting and Public Policy, (20) 3, 217-240.
Idowu, S. O., & Louche, C. (2011). Theory and practice of corporate social responsibility. Heidelberg: Springer.
Islam, M. A, and Deegan, C. (2010), “Social Responsibility Disclosure Practices: Evidence from Bangladesh”, Published by Certified Accountants Educational Trust for the Association of Chartered Certified Accountants.
ISO - International Organization for Standardization. (2015, September 14). Retrieved February 12, 2018, from https://www.iso.org/iso/catalogue_detail?csnumber=3180
K. M. Nazmul Islam and Dr. Ahmed Kamruzzaman Majumder. (2010, July 23). Environmental accounting. Retrieved February 16, 2018, from Stapleton, P.; Glover M. A; and Davis P. 2001. Environmental Management Systems: An Implementation Guide for Small and Medium-Sized Organizations. Second Edition. Michigan: NSF International UN CSD .http://www.thedailystar.net/news-detail-1479
Kamla R, Gallhofer S. Haslam J. (2006), “Islam, nature and accounting: Islamic principles and the notion of accounting for the environment”, Accounting Forum, 30(3), 245–265, Available in online: www.sciencedirect.com
Neu, D. & Warsame, H. & Pedwell, K., 1998. "Managing public impressions: environmental disclosures in annual reports," Accounting, Organizations and Society, Elsevier, vol. 23(3), pages 265-282, April.
Pramanik, A. K. (2002), Environmental Accounting and Reporting (eds.), , Deep & Deep publications Pvt. Ltd: New Delhi.
 Rahman and Muttakin, (2005), “Corporate Environmental Reporting Practices in Bangladesh – A Study of Some Selected Companies. The Cost & Management, July- August. 22. Rajapakse, B. (2001), Environmental Reporting Expectation Gap: Evidence from Private Sector Organisation in Sri Lanka, IWE Journal, 3, p.99-117
Robkob, P., & Ussahawanitchakit, P. (2009). Antecedents and consequences of voluntary disclosureof environmental accounting: An empirical study of foodsand beverage firms in Thailand. Review of BusinessResearch, 9(3), 1-30. 24.
Sarmento, M., Durão, D., & Duarte, M. (2005). Energy, 30(8), 1247-1257. doi:10.1016/j.energy.2004.02.006 25. Savage AA. 1994. Corporate social disclosure practices in South Africa: a research note. Social and Environmental Accounting14(1): 2-4. 26. Schaltegger, S. (1997). Information Costs, Quality of Information and Stakeholder Involvement – The Necessity of International Standards of Ecological Accounting. Eco- Management and Audit, 4, 87-97. 27.
Shil and Iqbal, (2005). Environmental Disclosure – A Bangladesh Perspective. The Cost & Management, July- August. 28. Sing DR, Ahuja JM. 1983. Corporate social reporting in India. International Journal of Accounting 18(2): 151-169. 29. 28.
Singh, G., & Joshi, M. (2009). Environment management and disclosure practices of Indian companies. International Journal of Business Research, 9(2), 116-128. 30.
Trent, W. (2006). CEO Incentives and Earnings Management. CFA Digest, 36(4), 18-19. http://dx.doi.org/10.2469/dig.v36.n4.4296
Tsang EWK. 1998. A longitudinal study of corporate social reporting in Singapore: the case of the banking, food and beverages and hotel industries. Accounting Auditing and Accountability Journal 11(3): 624-6 Dutta P, and Bose S. (2008), “Corporate Environmental Reporting on the Internet in Bangladesh: An Exploratory Study”, International Review of Business Research Papers, 4(3), 138-150.
Ullah, M. H. (2013), “Accounting and Reporting Practices of Islamic Banks in Bangladesh, M. Phil Thesis, University of Chittagong, Bangladesh
Zhang, J. et al, (2009) (2009) “The Influence of Financial Factors on Environmental Information Disclosure in China Chemical Industry”, International Journal of Global Environmental,9(3), 272-286.