Environmental Reporting and Management in Africa: Volume 8

In this chapter, we examine whether corporate environmental reporting (CER) by listed companies in Kenya improves stock liquidity. The investigation is motivated by the growing interest by corporations, investors, and regulators toward embracing ecological protection with a view to creating sustainable societies for the future.

Using a panel dataset comprising of 244 firm-year observations from 50 listed firms in Kenya over a five-year period (2011 to 2015), we perform fixed-effects regressions to discern whether CER is associated with stock liquidity. To examine this, we utilize bid-ask (as well as quoted) spreads measured over month −9 to month +3 relative to a firm’s year end.

Despite the seemingly low levels of CER across firms in the sample (average: 32.6%), the results depict that CER is positively associated with stock liquidity. The results are robust even when we consider changes in bid-ask spreads and CER together with the other variables. The same results emerge when we study the association between bid-ask spreads and each CER item at a time over the period 2011–2015.

The results imply that listed companies in Kenya that engage in higher CER seem to be more attractive to investors. The higher CER seems to improve the information environment, hence reducing information asymmetry and therefore attracting investors. The results provide some evidence of positive economic consequences of engaging in additional disclosure over and above the traditional corporate financial reporting.

The study adds onto the dearth of literature on the economic consequences of embracing additional disclosure frameworks in developing countries where the adoption of alternative reporting frameworks is at infancy.

This study applies social identity theory (SIT) to explore the perceptual differences among various stakeholder groups regarding the relevance of social and environmental accounting (SEA), SEA education and mandatory disclosure of SEA.

The study adopts a mixed method applying a qualitative and quantitative approach. In total, 325 structured questionnaires were analyzed quantitatively, using ANOVA and group comparison methods. Responses from 18 interviews were analyzed qualitatively to provide complementary evidence for the quantitative study.

There were significant differences between various stakeholder groups regarding the relevance of SEA practice and SEA education. Regulators were mostly affected by considerations about the external perception of work quality, followed by financiers. Practitioners and shareholders were influenced by the ability of SEA in its current state to affect actual work quality. This possibly indicates that academic qualifications have marginal effects on predicting considerations about SEA compared to social identity.

This is the first application of SIT to SEA research and contributes to the effort to improve SEA within emerging economies, highlighting that a one-size-fits-all approach may be ineffective.

Though environmental management accounting (EMA) is a globally recognized accounting practice, its application and development within several developing economies remain stunted. The aim of this chapter is to provide an overview of the extent to which EMA practices have been implemented by local manufacturing companies in Nairobi, Kenya.

We measure the degree to which EMA methods have been adopted by manufacturing entities and hypothesize that firm size, financial performance, and regulation are positively associated to the extent to which EMA techniques are applied by Kenyan corporations. The chapter employs a mixed methods research approach and combines the use of surveys with semi-structured interviews to gain insights into drivers of EMA and the extent to which these methods are applied locally.

We find environmental regulation and financial performance are positively associated with the level of EMA practices applied by manufacturing entities.

The findings illustrate the complexities of applying EMA practices within an emerging context and provide evidence that EMA practices are still predominantly used by entities to meet local regulatory requirements. The qualitative findings indicate there could be some companies who engage with EMA at a more sophisticated level.

The purpose of this chapter is to examine the corporate water reporting of the selected South African listed food producers with regard to the activities of measuring, managing, engaging with their stakeholders, and disclosing of their water risks.

This chapter examined the sustainability and integrated reports of 14 food producer companies on the Johannesburg Stock Exchange (JSE), for the years 2013 and 2017. The company reports were examined using the Ceres Aqua Gauge™ as the framework.

The findings of this study are that there were improvements in water disclosure from 2013 to 2017. Most companies are disclosing the basic water reporting requirements. However, critical areas around stakeholder engagement and supply chain water management were found to be lacking.

This research contributes to the body of knowledge around water disclosure and increases the awareness of water scarcity and poor water quality in South Africa. Furthermore, the study highlights that the food producers could be doing a lot more with regard to water sustainability in their businesses and the country.

The chapter investigates the relationship between environmental management practices (EMPs) and financial performance (FP).

The study is based on a sample of 187 SMEs and uses data on six EMPs (energy, water, waste, material, emissions, and biodiversity) collected through a self-administered questionnaire from owner-managers of SMEs. Ordinary least squares regression is employed to model the hypothesized paths.

The results suggest a positive and significant relationship between EMPs (energy, water, and material) and FP. There is also a significant positive relationship between an aggregate EMP measure and FP. However, other EMPs (waste, emissions, and biodiversity) are not significantly associated with FP. Overall, these results provide empirical support to the mostly normative suggestion that the conflicting results on the environmental management and financial performance relationship are partly due to the EMP measure used.

The study is based on cross-sectional data, and therefore, it is impossible to determine any changes over time. Longitudinal studies could help confirm the relationship between EMP and FP over a longer period. From a policy perspective, this results mean that the Ghanaian EPA must monitor more closely for violations of laws and regulations relating to waste, emissions, and biodiversity since SMEs do not have incentives to manage these impacts without commensurate return.

The study contributes by documenting evidence of the relationship between multiple measures of EMP and FP. This unlike most existing studies has enabled us to report evidence of how each EMP measure affects FP differently and where win–win opportunities are for SMEs. Thus, the win–win opportunities are associated with some EMP measures but not all.

This study explores the extent of environmental management and reporting regulations in Nigeria, highlighting areas of inadequacies in regulatory enforcement and companies’ compliance. We approach the review within the context of the UN 2030 Sustainable Development Agenda (SDA).

This chapter is based on a systematic review of extant environmental regulations and academic literature.

The results show several inadequacies with respect to Nigeria’s environmental management and reporting regulations. We specifically note the changing environmental management and reporting landscape in Nigeria birthing several emerging mandatory reporting codes. We find that fragmented reporting regulations and inappropriate sanctions are responsible for the unsatisfactory compliance and disclosure level noted among firms in the country. Additionally, weak enforcement, funding limitations, unrealistic financial penalties, and general implementation deficits remain factors impeding effective environmental management practice in Nigeria.

This research provides insight into environmental management and reporting inadequacies in Nigeria, and the actions regulators and firm managers need to take on board to help the country actualize the UN 2030 SDA.