Environmental disclosures on local governments' websites: a Malaysian context

Abstract

PurposeFirst, the paper examines the extent of environmental disclosures (EDs) made by the Malaysian local governments (LGs) on their websites. Second, it examines the patterns of disclosure with the aim of investigating the underlying motive behind the EDs.Design/methodology/approachA descriptive content analysis was employed to measure the EDs. A disclosure instrument, based on the extant studies, is designed to facilitate the measurement process.FindingsThe results suggest that LGs of various levels, have taken the initiative to report EDs on their websites even in the absence of any statutory reporting regulations either by the state or federal government. Differences in the types of EDs are also apparent and consistent with the premise of legitimacy theory.Originality/valueA paucity of prior studies measuring EDs made at the LG level is observed in the literature. Research evidence focussing on the EDs reported on the websites is even more scarce. This lack of research contributes to a limited understanding on the development and challenges of the environmental reporting practices within the developing country's perspective. Moreover, generalising the findings of studies conducted in developed countries may not be possible due to a number of regulatory, political and socio-economic factors.

Institutional pressures influencing environmental management accounting adoption by Malaysian local governments

“…The LGs are divided into city councils, municipalities and district councils depending on the number of inhabitants and revenue generations. For an LG to be classified as a city council, it should have at least 500,000 inhabitants with the ability to generate a yearly revenue exceeding RM 100m (Che Ku Kassim et al , 2020). There is also a special form of LG, classified as modified local councils, which refers to government agencies authorised by the respective state governments to assume the roles of LG (Che Ku Kassim et al , 2020).…”

“…For an LG to be classified as a city council, it should have at least 500,000 inhabitants with the ability to generate a yearly revenue exceeding RM 100m (Che Ku Kassim et al , 2020). There is also a special form of LG, classified as modified local councils, which refers to government agencies authorised by the respective state governments to assume the roles of LG (Che Ku Kassim et al , 2020). The executive powers of LGs for district councils and municipalities rest with the Yang Di-Pertua (President) whereas Datuk Bandar (Mayor) handles the city councils (Osman et al , 2014) and are administered and supported by a system of committees known as the Ahli Majlis (Councillors) (Phang, 2008).…”

“…Malaysia’s participation in the Rio’s Earth Summit 1992 resulted in the introduction of Local Agenda 21 (LA 21), leading to a significant impact on the social responsibility of the Malaysian LGs (Joseph and Taplin, 2011). It is considered as an innovative municipal urban development process that requires LGs and the residents to orientate themselves to a model promoting sustainable development through a series of initiatives such as environmental campaigns and seminars (Che Ku Kassim et al , 2020). The inclusion of NPM philosophy and the participation in LA 21 have changed the reporting practices of LGs.…”

“…Recent years have witnessed the increasing demand for environmental disclosures (EDs) fuelled by the improved level of stakeholders’ awareness on environmental issues, for example, global warming, biodiversity degradation, climate change and uncontrollable greenhouse emissions (Solovida and Latan, 2017; Che Ku Kassim et al , 2020). Consequently, organisations are being pressured to discharge their accountability by providing related disclosures in a diverse range of communication channels (Solovida and Latan, 2017; Lodhia, 2018) and local governments (LGs) are no exception (Farneti et al , 2019; Gaia and Jones, 2020).…”

“…Research is evident that Malaysian LGs have been responding to these information demands although in the absence of statutory reporting regulations (Joseph and Taplin, 2011). Yet, the extent of the reported EDs appears to be minimal and dominated by the narrative disclosures, signalling low quality (Joseph and Taplin, 2011; Che Ku Kassim et al , 2020). Thus, a more holistic accounting approach is called for, so that environmental information can be clearly identified and used to report environmental impacts and assist LGs in making better environmentally amicable decisions (Qian et al , 2011).…”