Of Financial Reporting Practices

'' Global corporations increasingly need to improve and account for their understanding and commitment to addressing the management of the principles of the 'triple bottom line of sustainability', i.e. economic, environmental and social performance. These aims should be recognised and, indeed, required as an integral part of Financial Reporting practices."

Discuss whether you agree with this statement and whether you think that sufficient progress has currently been achieved towards this aim in YOUR country. Base your answer on research, your readings, and your own experiences and be sure to cite and reference all sources of your information.

"...avoid problems rather than have to solve them when they happen..." - the direct quote of Elliott and Elliott is a clear indication of the actual need for addressing the triple bottom line of sustainability, therefore financial reports must include the areas such as environmental accounting and social responsibility (Elliott et al, 2006). In the modern corporate world there is no other choice left but disclosing the areas which go well beyond simply focussing on the companies' financial performance, and a change to the pure profit oriented attitude. The main areas which could even be called trends are environmental accounting and social responsibility.

With this regard Elliott and Elliott highlight that the accounting profession were initially identified with management thus allowing the information to be reported to suit the management, by only making the report congruent with the commercial reality (Elliott, 2006). The environmental accounting has not come into the corporate world in as a matter of fact; it has been resulted by the pressure from the stakeholders, whose interest has become as important as those of the shareholders, therefore it can be considered as a reactive phenomenon to the need (Elliott, 2006).

In beginning of the twenty first century, the standard setters such as European Community have started looking into the areas of concern; the result is the Green Paper on CSR, which highlights the importance of the stakeholders as opposed to shareholders is defines as follows:

'...a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis...' (Decker, 2004)

While all above said gives much hope to the stakeholder the reality may well be far from being hopeful. These are the headlines in the country where I am posted at the moment:

"...Ivory Coast is seeking an initial $82 million and a maximum of $461 million from oil trader Trafigura to cover depollution and medical costs stemming from a toxic waste dumping case..." (Reuters AlertNet, 2007)

The lack of respect and responsibility by the Dutch oil company added to the corrupt port authorities have resulted in a crises, which was not needed in this already war torn country. The ReliefWeb, official humanitarian information website by Organisation for Coordination of Humanitaian Aid (OCHA), has recently released the following statement:

"...Côte d'Ivoire is facing a funding shortfall of at least 15 million euros for the clean-up and rehabilitation of sites contaminated by hundreds of tonnes of deadly foreign toxic waste that was criminally dumped around Abidjan its largest city with a population of 5 million..." (ReliefWeb, 2007)

While such actions are deliberately committed by the companies from the first world, especially the Netherlands the country which has a legislation requiring environmental statements, not much is to hope for from the local players where no legislation as such even exists (Elliott et al, 2006). Herath (2005), mentions that the environmental researchers had argued and highlighted in reinforcement of a better role of accounting on the environment which is said to be long overdue, therefore weaning away from the currently vague concepts which can be interpreted in many ways would only but to achievement of the set objectives (Herath, 2005). Herath (2005) further goes on that '...including environmental effects will provide a more complete reporting