INTRODUCTION
Accounting and reporting for the environment has become an important dimension of corporate external information system in the twenty-first century ( Pahuja , 2009 ). In order to protect environment , enhance social progress and use natural resource prudently, sustainability development could be ensuring a better quality of life. Environment is often viewed as something green and relates to nature. ( Yusoff and Lehman, 2009). Corporate social responsibility can be influence to the sustainability. Corporate social responsibility framework that has been developed by Bursa Malaysia during 2006 include environmental component that company have to disclose in their annual report. Environmental problem become a major issue due to the impact towards the ecosystem.
The management and conservation of the environment in Malaysia is implemented within the context of sustainability development which consist of economic development, social development and environmental protection. Hence the Malaysia policy of the environment deal with these context. Malaysian policy on environment is focusing on sustainable development, economic, social and cultural progress as well as enhancement of quality of life and the environment. The national policy on the environment is based on eight principles that harmonies economic development . First are the stewardship of the environment. Second, conservation of nature's vitality and diversity. Third, continuous improvement in the quality of the environment. Fourth, sustainable use of natural resources. Fifth, integrated decision making. Sixth, role of the private sector. Seventh commitment and accountability. Lastly, active participation in international community.
Disclosure of environmental reporting is very important to attract more investment as for generate more business income. Environmental disclosure is refer to the activities as well as disclosure which have an impact of organization economic action to improved relationship with shareholder and another group of stakeholder on the natural environment ( Cambell ,2004; Salama, Hussainey and Habbash, 2010 ; Rizk,Dixon and Woodhead, 2008). The volume of environmental information reported has also increased. The increase in the environment reporting is consistent with the increase in the number of legislations passed to protect the environment. (Jaafar, 2006).
Environmental reporting can be defined as an umbrella term that describes the various means by which companies disclose information on their environmental activities ( Lund, 2002) . Environmental reporting can be categorized into mandatory disclosure and voluntary disclosure. Most previous researcher on corporate social responsibility disclosure considers environmental as a complementary ( Cormier, Ledoux and Magnan, 2009). However, environmental reporting within annual report has improved the last few years. Corporate environmental reporting serves different purposes to different stakeholders. ( Jaafar, 2006 ; Pahuja, 2009 ). The information of voluntary disclosure contained both in annual report, websites and stand alone environmental report. Environmental reporting in Malaysia still in voluntary compared with the another developing country such as Australia, which was introduced a new environmental reporting ( Yusoff, Yatim and Nasir, 2005; Cowan and Gadenne ( 2005)) . Australian government are increasingly using economic incentives to influence companies behavior and achieved environmental goal. Furthermore, Cowan and Gadenne ( 2005) had examine differences in the annual report disclosure practice of Australian companies within both a voluntary environmental disclosure and mandatory environmental disclosure.
There are some motivation factor that contribute to the environmental reporting. ACCA (2002) has been identified driver for environmental reporting. Firstly, introduction of Malaysian Code on Corporate Governance in KLSE listing requirement. Secondly, the increasing demand for transparency and accountability as a result of privatization. Thirdly, business and marketing strategy. Fourth, supply chain pressures. Fifth, improved company image. Sixth, NACRA environmental award. Environmental reporting award is one of the factor to support and promote best practice in environmental and sustainability of the company (Yusoff, Yatim and Nasser, 2005). The aims of the Awards are to recognise organisations which disclose information about the environmental and social impacts of their activity , to raise awareness of corporate transparency issues as well as to encourage the uptake of environmental and sustainability reporting. Yusoff et al (2005) also stated that other factor that encouraging company to disclose environmental disclosure which are pressures from various groups, internal pressures from employees and the interested of top management on the financial benefits that environmental strategy can offer to the business.
The Environmental Reporting for Malaysian Companies publication was launched by Puan Hajah Rosnani Ibarahim, Director General, Department of Environment, Ministry of Science, Technology and the Environment Malaysia at the ACCA Corporate Environmental Reporting 2003 Conference on 10 March 2003. ACCA was invited by YB Dato' Seri Law Hieng Ding, Minister of Science, Technology and the Environment to assist the Department of Environment in drawing up these guidelines during the launch of inaugural Malaysian Environmental Reporting Awards (MERA) competition on 16 July 2002. The aim of this guide is to provide a user-friendly introduction to the subject of corporate environmental reporting. It contains an explanation of what environmental reporting means and an overview of its evolution over the last 12 years. It also contains guidance on what environmental reports might contain, drawing from best practice guidelines and using selected examples from the published environmental reports of a number of large companies from around the world. A practical workshop on how to prepare an environmental reporting was conducted by a representative from the Department of Environment and ACCA UK on the last session of the second day of the conference.
The focus on better corporate governance has increased investor attention on corporate responsibility towards all stakeholder groups and in particular greater awareness of environmental, social and ethical issues in business. It is very challenges for organization regarding on the growing socially responsible investment market through sound and innovative environmental practices (ACCA, 2004). An important part to response to this challenges is the link between environmental cost and liabilities and corporate profits.
Companies under various regulatory regimes in the USA and Europe for example have been required for many years to report to public authorities about certain aspects of environment, health and safety issues related to their activities. Toxic Release Inventory (US) and Freedom of Access to environmental information (EU) are examples of mandatory environmental disclosure schemes. ACCA first launched its Environmental Reporting Awards in the UK in 1991, and since then has rolled the scheme out globally in Europe, Africa, North America/Canada and the Asia Pacific region. The programme is now known as the Sustainability Reporting Awards, due to changes in reporting practices since then. These awards reward companies for excellence in transparent environmental, social and sustainability reporting. The aim of the awards is to identify and reward innovative attempts to communicate corporate performance, although we do not comment on performance itself. Profit can be derived while creating a huge environmental. Sustainability is being translated into concrete benchmarks, clear standards and precise objectives for application in every business enterprise.
This dissertation is an adaption the framework from the previous research done by Yusoff and Lehman (2004) on the international differences on corporate environmental disclosure practice, the comparison between Malaysia and Australia of the top 50 public listed company. However, this study only consider in Malaysia only and explore the factors influencing the environmental disclosure decisions of public listed companies in Malaysia.
PROBLEM STATEMENT
Several are several studies done by previous researcher on the effect of environmental reporting ( Cormier, Ledoux & Magnan, 2009; Yusoff et all, 2005; Ten, 2009 ). Other than that, there is also the studies that have been done on the drivers for the company present environmental disclosure (Razeed, 2009 ; Razeed et all, 2009). The drivers that influence company to disclose their environmental disclosure including internal factor ( Yusoff et al, 2005) as well as external factor ( Yusoff et al, 2005 ; Whilmshurt &Frost, 1999). Rather than that are growth in awareness and concern of community ( Whilmshurt & Frost, 1999 and Smith, Yahya and Amiruddin , 2007)
Until the mid- 1990s the research works examining the relationship between environmental reporting and various corporate characteristics were not many. However, since the late 1990s this has been an area of consistent interest among researchers. Many works have attempted to explore the reasons for differences in environmental reporting practices of companies having differing characteristics. ( Pahuja, 2009; ) .
Although environmental accounting show an increasing trend, it was still lagging behind the adoption of socially and environmentally responsible activities indicating a low level of maturity (Ten, 2009 ; Yusoff, Yatim & Nasir, 2005). Rather than that, there are limited support of theoretical framework in various attempts to understand the motivations behind Malaysian corporate environmental reporting practices in Malaysia.
Although there have been numerous prior studies on environmental disclosure involving content analysis, there has been to researcher knowledge a limited studies on the factor influencing corporate environmental disclosure. As been suggested by Yusoff et al (2005) that had been suggested by analyzing the factors that can be influence the environmental disclosure which include company profit. The paper represents an attempt to address this gap in the literature by providing a snapshot of the environmental accounting and reporting practices developed by Malaysian Public Listed Company.
RESEARCH QUESTIONS
What are the current environmental disclosure among Malaysian Public listed company.
What are the factors that may influences disclosure of environmental information in annual report.
OBJECTIVE OF THE STUDY
To test the relationship between environmental disclosure item with financial performance of the companies.
To test the relationship between environmental disclosure item with leverage ratio of the companies.
To examine the difference between environmental disclosure item with environmental sensitive companies and non sensitive companies.
To identify the association between environmental disclosure item with ISO 14000 companies.
SIGNIFICANCE OF THE STUDY
This study is significant for three important reason. First, its contributes to the literature by providing the recent state of environmental reporting practices in Malaysia. Secondly, the findings will impact to the essential of intergrating environmental consideration to the investors community in their decision making. Stakeholders may use the information to their decision making too. Finally for the policy maker, this research will provide indispensable evidence on the necessity of revisity the existing standard and regulation.
ORGANISATION OF THE DISSERTATION
This paper comprises of five main chapters. It starts with an introduction part as Chapter One. This part assist readers to gain an overall idea to further understand issues under review. Chapter Two helps to explain the relevance of this study with the inclusion of previous literature and framework. Detailed information about research methodology is briefly discussed in Chapter Three. This chapter highlights information regarding research methodology, hypotheses development and statistical analysis that are carried out to improve the reliability of the results. The results of this study are reported in Chapter Four. To end the study, conclusions, limitations and suggestion for future research and recommendations are discussed in Chapter Five.
Chapter One : Introduction
This first chapter confers on the overview of the study undertaken. It start with discussion concerning issues on environmental reporting, followed by environmental disclosure, which triggers the development of the current study. The statement of research problem is being put to limit the scope of this study in order to make a definite conclusion possible. Its lead to a research objective, which explains the reasons of undertaking this study. This introductory chapter also gives interested parties a brief idea regarding the purpose of the study and its significance.
Chapter Two : Literature review
Previous study that construct the theoretical framework applied for this study are presented in this chapter. Besides comprising literature review on the previous research on environmental reporting, this chapter also highlight
Chapter Three : Research Methodology
This section explains the research methods used in the study including objective of the present study, scope and methodology, identification and measurement of variables, hypothesis setting, model building, data collection and analysis.
Chapter Four : Findings and Discussions
This chapter represent an empirical result that have been done using a specific model . The analysis is done through various methods and techniques such as statistical tools and through reading the company's annual reports to obtain information. The analysis will show whether the hypothesis made earlier is in par with the results or contradicts it. Interpretations of findings are presented in tables and detailed analysis with the objective of enabling readers to follow the flow of the study easily.
Chapter Five : Conclusion, Limitation and Future research
This chapter provide a summary and concluding remarks, along with a discussion of limitations and potential extensions to this research.
SUMMARY
Environmental disclosure has become increasingly importance as many researchers and businesses around the world today have recognized the importance as many researchers and businesses around the world today have recognized the importance of managing their social responsibility and it has been viewed as providing sustainable sources of business advantage. This dissertation is an adaption the framework from the previous research done by Yusoff and Lehman (2004) on the international differences on corporate environmental disclosure practice, the comparison between Malaysia and Australia of the top 50 public listed company. However, this study only consider in Malaysia only and explore with the regards to the state of the art and the factors influencing the environmental disclosure decisions of public listed companies in Malaysia. The objective is to provide insight to interested parties comprising of shareholders and stakeholders on what matters and what is not to be considered in their business decision making.
