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  • November 4, 2016
  • David Marks
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Environmental Balance Assignment Help

Introduction

Today, efforts are being made worldwide to maintain environmental balance since industry is growing in a rampant fashion, and definitely affecting the environment in the course. Various environmental laws have been put in place in various countries all over the World but this form of environmental legislation where there are standards and non-compliance to these standards attracts penalties is a passé, and has not resulted in the desired effect, that is controlling such environment harmful activities. In most of the countries, these laws are difficult to implement because of lack of capacity and will to control the same.  Along with environmental legislation, various other forms of environmental policing were also adopted like tradable permits, charges on emissions etc. They were market based approaches to tackling the environment degradation but they have also proved pretty much ineffective. These tools are also quite difficult to design, and then to implement them and their continuous monitoring requires quite an effort.

The failure of environmental legislation and other tools like permits and charges made way to voluntary disclosure of corporate social activities, environmental information and other schemes by corporations (Guthri & Parker 1989, pp. 343-352). Corporations publically disclose emissions, pollution caused by their activities and also various remedial schemes incorporated in their activities. With information revolution in the past few years, information disclosure has become very popular and has been effective in improving corporate performance in environmental area.

There have been various theories which have tried to explain the reason behind reporting of CSR activities. The legitimacy theory explains the reason behind this in a very effective manner. Legitimacy theory is a very popular theory when it comes to social and environmental accounting and is fast gaining credibility amongst the researchers. It offers perspectives on voluntary disclosures by various corporations, mainly in the area of corporate social responsibility, environment etc.   According to the theory, voluntary disclosures on matters such as CSR, environment is made because of environmental factors and to legitimize the various actions done by corporates in carrying out these activities (Deegan 2002, p. 285). Other theories like Positive Accounting theory also relate to these social and environmental disclosures.

CSR and other such disclosures have been under the scanner by researchers for years. Relationship between CSR activities and financial performance has not been ascertained by any means, so research wonders why corporations get into CSR activities. This could mean that corporations really mean well for societies but this has not been established empirically.

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