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Environmental Accounting and Reporting in Indian Public and Private Sector Companies: - Testing of hypothesis and analysis
of data.
CHAPTER 4
ENVIRONMENTAL ACCOUNTING AND REPORTING IN INDIAN PUBLIC AND PRIVATE SECTOR COMPANIES: -
TESTING OF HYPOTHESIS AND ANALYSIS OF DATA
This chapter comprises of two parts. In part one data of question no. 1-
6 of the questionnaire related to five core areas of environmental accounting
and reporting have been analyzed on the basis of the hypotheses using chi-
square test. Data on the rest of the questions of the questionnaire have been
analyzed and interpreted in the section two using comparative study on the
percentage based methods.
1) Hypothesis:-1
Ho: As far as environmental protection and management challenges
are concerned, there is no difference of opinion between public and private
sector Indian companies.
Ha: As far as environmental protection and management challenges
are concerned, there is difference of opinion between public and private
sector Indian companies.
165
TABLE-4.1
SIGNIFICANT CHALLENGES FACED BY BUSINESS FOR
ENVIRONMENTAL PROTECTION AND MANAGEMENT
Response Category Public Sector Private Sector
Percentage No. Percentage No.
(a) Strongly agree 53 77 58 67
(b) Moderately agree 12 17 21 24
(c) Moderately disagree 0 0 0 0
(d) Strongly disagree 0 0 0 0
No Response 4 06 8 09
Total 69 100 87 100
Q.1 Environmental protection and management is one of the most
important challenges faced by business these days?
(a) Strongly agree [ ]
(b) Moderately agree [ ]
(c) Moderately disagree [ ]
(d) Strongly disagree [ ]
Hypothesis Testing by Chi-Squire Test
Crosstabs
Case Processing Summary
156 100.0% 0 .0% 156 100.0%VAR00001 * VAR00002N Percent N Percent N Percent
Valid Missing Total
Cases
166
VAR00001 * VAR00002 Crosstabulation
Count
53 58 111
12 21 33
4 8 12
69 87 156
1.00
2.00
5.00
VAR00001
Total
1.00 2.00
VAR00002
Total
Chi-Square Tests
1.962a 2 .375
1.989 2 .370
1.349 1 .245
156
Pearson Chi-Square
Likelihood Ratio
Linear-by-LinearAssociation
N of Valid Cases
Value dfAsymp. Sig.
(2-sided)
0 cells (.0%) have expected count less than 5. Theminimum expected count is 5.31.
a.
In the given case the p value of X2 (Chi Square) for 2 d.f. is. 375.
Whereas α value of Chi Square at 5% level of significance is 0.5. That is, p
value is less than α value of Chi Square (p≤ α, result will be significant, it
means relation between two variables). Therefore we may have to accept the
null hypothesis that is, As far as environmental protection and management
challenges are concerned, there is difference of opinion between Indian public
and private sector Companies.
Hypothesis:-2
Ho: There is relation between ownership and the essentiality of
environmental accounting and reporting in Indian private sector companies.
Ha: There is no relation between ownership and the essentiality of
environmental accounting and reporting in Indian private sector companies.
167
TABLE – 4.2
SIGNIFICANCE OF ENVIRONMENTAL ACCOUNTING IN PUBLIC
AND PRIVATE SECTOR INDIAN COMPANIES
Response Category Public Sector Private Sector
No. Percentage No. Percentage
(a) Extremely essential 6 09 6 7
(b) Very essential 48 70 51 59
(c) Moderately Essential 08 12 23 26
(d) Not very essential 0 0 0 0
(e) Not at all essential 0 0 0 0
(f) No Response 7 10 7 08
Total 69 100 87 100
Q.2 How essential would you think is for firms to ensure environmental
accounting and reporting?
(a) Extremely essential [ ]
(b) Very essential [ ]
(c) Moderately Essential [ ]
(d) Not very essential [ ]
(e) Not at all essential [ ]
Hypothesis Testing by Chi-Squire Test
Crosstabs
Case Processing Summary
156 100.0% 0 .0% 156 100.0%VAR00001 * VAR00002N Percent N Percent N Percent
Valid Missing Total
Cases
168
VAR00001 * VAR00002 Crosstabulation
Count
6 6 12
48 51 99
8 23 31
7 7 14
69 87 156
1.00
2.00
3.00
6.00
VAR00001
Total
1.00 2.00
VAR00002
Total
Chi-Square Tests
5.343a 3 .148
5.581 3 .134
.176 1 .675
156
Pearson Chi-Square
Likelihood Ratio
Linear-by-LinearAssociation
N of Valid Cases
Value dfAsymp. Sig.
(2-sided)
0 cells (.0%) have expected count less than 5. Theminimum expected count is 5.31.
a.
In the given case the p value of X2 (Chi Square) for 3 d.f. is .148.
Whereas the value of Chi Square at 5% level of significance is 0.5. That is, p
value is less than α value of Chi Square. Result will be significant; it means
relation between two variables). Therefore we may have to accept the null
hypothesis that there is relation between ownership and the essentiality of
environmental accounting and reporting for the private sector Indian
companies.
Hypothesis:-3
Ho: There is relation between ownership and the cost of environmental
accounting and reporting in Indian public and private sector companies.
169
Ha: There is no relation between ownership and the cost of
environmental accounting and reporting in Indian public and private sector
companies.
TABLE-4.3
SIGNIFICANCE OF COST OF ENVIRONMENTAL ACCOUNTING AND
REPORTING IN INDIAN PUBLIC & PRIVATE SECTOR COMPANIES
Response category Public Sector companies’ Private Sector companies
No. Percent No. Percent
(a) Very high 47 68 27 31
(b) High 13 19 42 48
(c) Low 0 0 8 09
(d) Very low 0 0 5 06
(e) No Response 09 13 5 06
Total 69 100 87 100
Q.3 What do you think the costs of environmental accounting and
reporting would inevitably be?
(a) Very high [ ]
(b) High [ ]
(c) Low [ ]
(d) Very low [ ]
170
Hypothesis Testing by Chi-Squire Test:-
Crosstabs
Case Processing Summary
156 100.0% 0 .0% 156 100.0%VAR00001 * VAR00002N Percent N Percent N Percent
Valid Missing Total
Cases
VAR00001 * VAR00002 Crosstabulation
Count
47 27 74
13 42 55
8 8
5 5
9 5 14
69 87 156
1.00
2.00
3.00
4.00
5.00
VAR00001
Total
1.00 2.00
VAR00002
Total
Chi-Square Tests
33.204a 4 .000
38.665 4 .000
3.387 1 .066
156
Pearson Chi-Square
Likelihood Ratio
Linear-by-LinearAssociation
N of Valid Cases
Value dfAsymp. Sig.
(2-sided)
4 cells (40.0%) have expected count less than 5. Theminimum expected count is 2.21.
a.
In the given case the p value of X2 (Chi Square) for 4 d.f. is. 000.
Whereas the α value of Chi Square at 5% level of significance is 0.5. That is, p
value is less than α value of Chi Square. Result will be significant it means
relation between two variables). Therefore we may have to accept the null
hypothesis that there is relation between ownership and the cost of
171
environmental accounting and reporting in Indian public and private
companies.
Hypothesis:-4
Ho: There is no significant difference between attitude of private and
public sector Indian companies as regards the nature of disclosure of
environmental accounting and reporting.
Ho: There is significant difference between attitude of private and public
sector Indian companies as regards the nature of disclosure of environmental
accounting and reporting.
TABLE – 4.4
NATURE OF DISCLOSURE OF ENVIRONMENTAL ACCOUNTING
AND REPORTING IN INDIAN PUBLIC & PRIVATE SECTOR
COMPANIES
Response category Public Sector companies’ Private Sector companies
No. Percent No. Percent
(a) Quantitative only 06 09 07 08
(b) Qualitative only 05 07 06 07
(c) Both 51 74 69 79
(d) No response 07 10 05 06
Total 69 100 87 100
Q.4 In your opinion what should be the nature of disclosure of
environmental accounting and reporting?
(a) Quantitative only [ ]
172
(b) Qualitative only [ ]
(c) Both [ ]
Hypothesis Testing by Chi-Squire Test:-
Crosstabs
Case Processing Summary
156 100.0% 0 .0% 156 100.0%VAR00001 * VAR00002N Percent N Percent N Percent
Valid Missing Total
Cases
VAR00001 * VAR00002 Crosstabulation
Count
6 7 13
5 6 11
51 69 120
7 5 12
69 87 156
1.00
2.00
3.00
4.00
VAR00001
Total
1.00 2.00
VAR00002
Total
Chi-Square Tests
1.139a 3 .768
1.132 3 .769
.063 1 .801
156
Pearson Chi-Square
Likelihood Ratio
Linear-by-LinearAssociation
N of Valid Cases
Value dfAsymp. Sig.
(2-sided)
1 cells (12.5%) have expected count less than 5. Theminimum expected count is 4.87.
a.
In the given case the p value of X2 (Chi Square) for 3 d.f. is. 768.
Whereas the value of Chi Square at 5% level of significance is 0.5. That is, p
value is larger than the value of Chi Square. Result will be not significant; it
means no relation between two variables). Therefore we may have to accept
173
the alternate hypothesis that is no significant difference between attitude of
private and public sector Indian companies as regards the nature of disclosure
of environmental accounting and reporting.
Hypothesis:-5
Ho: There is relation between ownership and attitude as regards
periodicity of reporting of environmental accounting and reporting in the
public and private sector Indian companies.
Ho: There is no relation between ownership and attitude as regards
periodicity of reporting of environmental accounting and reporting in the
Indian public and private sector companies.
TABLE – 4.5
PERIODICITY OF REPORTING
Response category Public Sector companies’ Private Sector companies
No. Percentage No. Percentage
(a) Monthly 5 7 5 06
(b) Quarterly 7 10 5 06
(c) Half yearly 6 09 9 10
(d) Yearly 45 65 61 70
(e) If any other (please specify) 0 0 0 0
No response 6 09 7 08
Total 69 100 87 100
Q.5 What is the periodicity of reporting?
(a) Monthly [ ]
(b Quarterly [ ]
174
(c) Half yearly [ ]
(d)
Yearly [ ]
(e)If any other (please specify)
……………………………….………………………
………………………………………………………
Hypothesis Testing by Chi-Squire Test:-
Crosstabs
Case Processing Summary
156 100.0% 0 .0% 156 100.0%VAR00001 * VAR00002N Percent N Percent N Percent
Valid Missing Total
Cases
VAR00001 * VAR00002 Crosstabulation
Count
5 5 10
7 5 12
6 9 15
45 61 106
6 7 13
69 87 156
1.00
2.00
3.00
4.00
6.00
VAR00001
Total
1.00 2.00
VAR00002
Total
Chi-Square Tests
1.367a 4 .850
1.359 4 .851
.330 1 .565
156
Pearson Chi-Square
Likelihood Ratio
Linear-by-LinearAssociation
N of Valid Cases
Value dfAsymp. Sig.
(2-sided)
1 cells (10.0%) have expected count less than 5. Theminimum expected count is 4.42.
a.
175
In the given case the p value of X2 (Chi Square) for 4 d.f. is. 850.
Whereas the value of Chi Square at 5% level of significance is 0.5. That is, p
value is larger than the value of Chi Square (α). Result will be not significant;
it means no relation between two variables). Therefore we may have to accept
the alternate hypothesis that is no relation between ownership and attitude as
regards periodicity of reporting of environmental accounting & reporting in
the public and private sector Indian companies.
Hypothesis:-6
Ho: There is significant difference between attitude of private and public
sector Indian companies as regards auditing of environmental accounting and
reporting of public and private sector Indian companies.
Ha: There is no significant difference between attitude of private & public
sector Indian companies as regards auditing of environmental accounting and
reporting of public and private sector Indian companies.
TABLE – 4.6
ESSENTIALITY OF ENVIRONMENTAL AUDITING FOR BETTER
ENVIRONMENTAL ACCOUNTING AND REPORTING IN INDIAN
PUBLIC &PRIVATE SECTOR COMPNIES
Response category Public Sector companies’ Private Sector companies No. Percent No. Percent
(a) Mandatory 00 00 00 00 (b) Extremely essential 05 07 00 00 (c) Very essential 35 51 43 49 (d) Fairly essential 05 07 19 23 (e) Not very essential 00 00 09 10
176
(f) Not at all essential 00 00 00 00 (g) No Response 24 35 16 18 Total 69 100 87 100
Q.6 How essential would you think is for firms to pursue environmental
auditing better environmental accounting and reporting?
(a) Mandatory [ ]
(b) Extremely essential [ ]
(c) Very essential [ ]
(d) Fairly essential [ ]
(e) Not very essential [ ]
(f) Not at all essential [ ]
Hypothesis Testing by Chi-Squire Test:-
Crosstabs
Case Processing Summary
156 100.0% 0 .0% 156 100.0%VAR00001 * VAR00002N Percent N Percent N Percent
Valid Missing Total
Cases
VAR00001 * VAR00002 Crosstabulation
Count
5 5
35 43 78
5 19 24
9 9
24 16 40
69 87 156
2.00
3.00
4.00
5.00
7.00
VAR00001
Total
1.00 2.00
VAR00002
Total
177
Chi-Square Tests
22.814a 4 .000
28.467 4 .000
.694 1 .405
156
Pearson Chi-Square
Likelihood Ratio
Linear-by-LinearAssociation
N of Valid Cases
Value dfAsymp. Sig.
(2-sided)
3 cells (30.0%) have expected count less than 5. Theminimum expected count is 2.21.
a.
In the given case the p value of X2 (Chi Square) for 4 d.f. is.000. Whereas
the α value of Chi Square at 5% level of significance is 0.5. That is, p value is
less than the α value of Chi Square. Result will be significant; it means relation
between two variables). Therefore we may have to accept the null hypothesis
that is significant difference between attitude of private and public sector
Indian company as regards auditing of environmental accounting and
reporting.
TABLE -4.7
IMPORTANT COMPONENTS OF ENVIRONMENT CONCERNED WITH
ITS SURROUNDINGS FOR PUBLIC AND PRIVATE SECTOR INDIAN
COMPANIES
Response about Air, Water, Land, Flora, Fauna and Non renewable resources such as
fossil fuels and minerals.
No. Percent No. Percent No. Percent No. Percent No.
Percent No. Percent
178
PUBLIC SECTOR INDIAN COMPANIES
Yes 69 100 69 100 69 100 58 84 53 76 47 68
No 0 0 0 0 0 0 4 06 8 12 06 09
No Respond0 0 0 0 0 0 7 10 8 12 13 19
Total 69 100 69 100 69 100 69 100 69 100 69 100
PRIVATE SECTOR INDIAN COMPANIES
Yes 87 100 87 100 87 100 83 95 77 88 74 85
No 0 0 0 0 0 0 0 0 6 07 06 07
No Response 0 0 0 0 0 0 4 05 4 05 07
08
Total 87 100 87 100 87 100 87 100 87 100 87 100
Q.7 Do you agree that the business environment is concerned with its
surroundings and includes?
(a) Air [ ]
(b) Water [ ]
(c) Land [ ]
(d) Flora [ ]
(e) Fauna [ ]
(f) Non-renewable resources such as fossil fuels and minerals. [ ]
The above Table shows that all the public companies 69 (100%) have shown
consensus over the significance of air, water, and land as the important
environmental components surrounding them. In case of flora, 58 (84%)
179
public companies agreed with its significance as an important environmental
factor while 7 (approx.10%) gave no response. About 53 (77%) companies
considered fauna to be little less significant environmental factor whereas 8
(11%) discarded it to be a relevant environmental factor and 8 (11%) not
answered. A majority of public companies, 47 (68%) believed that non-
renewable resources such as fossil fuel and minerals are the significant
environment factors. 6 (9%) public companies are in favour of the non
renewable resources as environmental components and 13 (18%) not
responded.
Similarly, in case of private companies, 87 (100%) also agreed with the
significance of air, water and land as being the environmental components. 83
(95%)private companies gave a positive response about the significance of
flora as one of the environmental factors. While 6 (7%) did not answer. In case
of fauna 77 (88%) companies take into account as an important environmental
component and 6 (7%) companies consider it to be a less important factor of
the environment. 4 (5%) companies not responded at all. Non–renewable
resources such as fossil, fuels and minerals are also believed to be equally
important environmental components as 74 (85%) private companies
responded in an affirmative manner. 6 (8%) did not favour it and 9 (8%)
companies gave no answer.
From the above data it is obvious that in case of air, land and water both
public and private sector companies have slightly different views. The
180
difference is meager in terms of percentage and there is no significant
difference in the opinion of both public and private sector Indian companies.
TABLE – 4.8
COMPONENT OF DEFINITION OF ENVIRONMENTAL ACCOUNTING
AND REPORTING
Components Public Sector Companies Private Sector Companies
No Percentage No Percentage
(a) Identification of environmental costs 1 1 3 3
(b) Measurement of environmental costs 0 0 2 2
(c) Disclosure of environmental costs 1 1 0 0
(d) Benefits, assets and liabilities related to environmental accounting. 2 03 3 3
(e) All the above 54 78 69 80
(f) No Response 11 16 10 12
Total 69 100 87 100
Q.8 In your opinion environmental accounting has been defined as.
(a) Identification of environmental costs, [ ]
(b) Measurement of environmental costs, [ ]
(c) Disclosure of environmental costs, [ ]
(d) Benefits, assets and liabilities related to environmental
accounting. [ ]
(i) Do you agree with the definition? [ ]
(ii) If your answer is no, kindly give a suitable definition?
181
……………………………………………………………………………………
……………………………………………………………………………………
……………………………………………………………………………………
As far as public sector is concerned, 1 (1%) of the public sector company
reported that the identification of environmental costs is an important part of
the definition of environmental accounting and reporting system in Indian
companies. In case of measurement of environmental costs as the only
important aspect of the definition of environmental accounting and reporting
system in Indian public sector companies none of them are in favour of it. In
case of Disclosure of environmental costs as an important part of definition of
environmental accounting and reporting system in Indian public sector
companies only 1 (1%) company favoured it. While in case of Benefits, assets
and liabilities related to environmental accounting as an important part of
definition of environmental accounting and reporting system in Indian public
sector, only 2 (3%) companies are in favour of it. Whereas regarding all the
components together as an important part of definition of environmental
accounting and reporting system in Indian public sector companies, majority
of companies such as 54 (78%) agreed. While, 11(15%) public companies gave
no response.
Similarly, in case private sector Indian companies, 3 (3%) of companies
treated the Identification of environmental costs as an important part of
definition of environmental accounting and reporting system. In case of
182
Measurement of environmental costs as an important part of definition of
environmental accounting and reporting system in Indian private sector
companies only 2 (2%) are in favour of it. Regarding disclosure of
environmental costs as an important part of definition of environmental
accounting and reporting system in Indian private sector companies none of
them preferred for it. While about benefits, assets and liabilities related to
environmental accounting as an important part of definition of environmental
accounting and reporting system only 3 (3%) companies agreed. whereas
including the above components together as an important part of definition of
environmental accounting and reporting system in Indian private sector
companies, majority of companies such as 69 (79%) companies are in favour
of it. While, 10 (11%) public companies did not give any response.
It is therefore evident that a large group of the public and private sector
Indian companies are in favour of all the above components together as an
important part of definition of environmental accounting and reporting
system. Therefore there is no significant difference in the opinion of public
and private sector companies about the various components of definition of
environmental accounting and reporting system.
183
TABLE:-4.9
PROBLEMS IN IMPLEMENTING ENVIRONMENTAL ACCOUNTING
AND REPORTING
Problems Public Sector Companies Private Sector Companies
No. Percentage No. Percentage
(a) The problem of changing prices. 7 10 9 10
(b) The problem of developing the required technology. 4 06 5 06
(c) The problem of justifying increased costs of environmental accounting and reporting programmes to the shareholders. 6 9 6 07
(d) Difficulty is adjusting to legal requirements. 3 04 3 03
(e) Other (please specify) 0 0 0 0
(f) All above 41 59 53 61
(g) No responded 8 12 11 13
Total 69 100 87 100
Q.9 Does your company encounter any of the following problems in
implementing environmental accounting and reporting?
(a) The problem of changing prices. [ ]
(b) The problem of developing the required technology. [ ]
(c) The problem of justifying increased costs of environmental
accounting and reporting programmed to the shareholders. [ ]
(d) Difficulty is adjusting to legal requirements. [ ]
(e) Other please specifies
………………………………………………………………………
………………………………………………………………………
184
Table 9 depicts the problems faced in implementing environmental
accounting and reporting. In public sector, 7 (10%) companies pointed out the
problem of changing prices as a hurdle in implementing Environmental
Accounting and Reporting , 4 (6%) of the companies showed the problem of
developing the required technology as a barrier in implementing
environmental accounting and reporting. 6 (9%) public sector companies felt
that the issue of justifying increased costs of environmental accounting and
reporting programmes to the shareholders creates problem in implementing
environmental accounting and reporting. 3 (4%)of public sector companies
found difficulties in adjusting to legal requirements .The larger number i.e. 41
public sector companies (60 %) encountered all of the above problems in
varying degrees of severity in implementing environmental accounting and
reporting. 8 (12% )did not respond about the problems of environmental
accounting and reporting. These are mostly from the lots which have not
responded in previous table too.
On the other hand nearly an equal percentage of private companies like
public companies i.e. 9 (10%), felt the problem of the changing prices in
implementing environmental accounting and reporting. 5 private companies
(6%) reported the problem of developing the required technology as barrier in
implementing the environmental accounting and reporting while 6 (7%)
private companies faced with the problem of justifying increased costs due to
the implementation of environmental accounting and reporting program as a
big problems in environmental accounting and reporting. 3 (4%) companies
185
pointed out the difficulty in adjusting to legal requirements as a problem of
environmental accounting and reporting. An aggregate of 53 of the sample
(62%) felt that all of the above factors as significant problems in
Environmental Accounting and Reporting. 11 (13%) did not respond about
the problem they faced in implementing environmental accounting and
reporting. There is no significant difference in the opinion of public and
private sector companies when it comes to problems in implementing
environmental accounting and reporting in public and private sector
companies.
TABLE:-4.10
USE OF FORMAL ENVIRONMENTAL ACCOUNTING AND
REPORTING SYSTEM
Response Category Public Sector Companies Private Sector Companies
No. Percentage No. Percentage
Yes 0 0 0 0
No 60 87 81 93
No response 09 13 06 07
Total 69 100 87 100
Q.10. Do you have a formal environmental accounting and reporting
system? [ ]
Not even a single public out of 69 no even single company is having any
formal environmental accounting and reporting system and 60 (87%)
companies are not in much favour of it and 09 (13%) companies did not
186
respond about the use of formal environmental accounting and reporting
system.
Similarly, out of 87 private companies, none of them is having formal
environmental accounting and reporting system and 81 (98%) companies
were not in favour of it. Whereas 6 (5%) private companies did not respond
about the use of formal environmental accounting and reporting system in
Indian private sector companies.
It is, therefore obvious that a large number of the Indian public and
private sector companies are not in favor of formal environmental accounting
and reporting system. There is no significant difference in the opinion of
public and private sector companies about the availability of formal
environmental accounting and reporting system in Indian public and private
sector companies.
TABLE – 4.11 PERSON RESPONSIBLE FOR ENVIRONMENTAL ACCOUNTING AND
REPORTING (EAR) IN INDIAN PUBLIC & PRIVATE SECTOR COMPANIES
Response category Public Sector companies’ Private Sector companies
No. Percent No. Percent
(a) Internal Accounts 05 07 08 09
(b) Chartered Accountants 33 48 59 68
(c) Shareholders 0 0 0 0
(d) Chief Executive officers 07 10 06 07
(e) Directors 11 16 04 04
(f) Board of Directors. 06 09 05 06
(g) No response 07 10 05 06
Total 69 100 87 100
187
Q.11 If yes which of the following in your company is responsible for
environmental accounting and reporting?
(a) Internal Accounts [ ]
(b) Chartered Accountants [ ]
(c) Share holders [ ]
(d) Chief Executive officers [ ]
(e) Directors [ ]
(f) Board of directors. [ ]
Table 11 attempts to identify people responsible for environmental
accounting and reporting in Indian public and private sector companies.
In public sector, 5 (7%) companies reported that Internal Accountants are
more responsible for Environmental Accounting and Reporting. A good
number of public sector companies, 33 (48%) felt that Chartered Accountants
should be accountable for environmental accounting and reporting, whereas
none of the public sector companies held shareholders responsible for
Environmental Accounting and Reporting . 7 (10%) of the public sector
companies reported that chief Executive officers are authorized for
Environmental Accounting and Reporting while 11 (16%) companies feel that
Individual Directors are answerable for it. 6 (9 %) companies recommended
that board of directors should be responsible for Environmental Accounting
and Reporting . Nearly 7 (10%) did not respond about the responsibility of
188
Environmental Accounting and Reporting. These are mostly from the lot
which has not answered in the previous query too.
11 (13%) and 57 (66%) private sector companies reported that Internal
accountants and Chartered Accountants respectively are accountable for
environmental accounting and reporting. None of the private sector
companies reported that shareholders are authorized for environmental
accounting and reporting. 6 (7%) private sector companies considered Chief
Executive to be in charge for Environmental Accounting and Reporting,
whereas 3 (3%) reported that individual directors should be responsible for
environmental accounting and reporting. 6 (7%) reported that board of
directors are to be answerable for Environmental Accounting and Reporting.
5 (6%) did not respond.
Obviously, there is insignificant difference in the opinion of public and
private sector companies in identifying the person to be made responsible for
task of Environmental Accounting and Reporting.
TABLE – 4.12 THE MAIN CAUSES FOR NOT HAVING FORMAL ENVIRONMENTAL
ACCOUNTING AND REPORTING SYSTEM
Response Category Public Sector Companies Private Sector Companies
No. Percent No. Percent
(a) Not an area of interest 0 0 0 0
(b) Lack of clear-cut govt. policy on the issue 10 15 15 17
(c) Lack of accounting standards. 35 51 50 06
189
(d) Voluntary nature of environmental accounting 05 07 05 06
(e) Difficulty in measuring and defining environmental cost and benefits. 03 04 08 09
(f) Expensive 07 10 02 02
(g) Time consuming 0 0 0 0
(h) Not required by law 09 13 03 03
(i) Difficulty in measuring 0 0 0 0 environmental information
(j) Not useful in decision-making 0 0 0 0
(k) Any other (please specify) 0 0 0 0
(l) Not Responded 0 0 04 04
Total 69 100 87 100
Q.12 If no, the main causes for no formal environmental accounting and
reporting system in your financial statements are?
(a) Not an area of interest [ ]
(b) Lack of clear-cut govt. policy on the issue [ ]
(c) Lack of accounting standards. [ ]
(d) Voluntary nature of environmental accounting [ ]
(e) Difficulty in measuring and defining environmental cost and
benefits. [ ]
(f) Expensive [ ]
(g) Time Consuming [ ]
(h) Not required by law [ ]
190
(i) Difficulty in measuring environmental information [ ]
(j) Not useful in decision making [ ]
(k) Any other (please specify)
……………………………………………
…………………………............................
Table 12 depicts the main causes for not having formal environmental
accounting and reporting system.
None of the public sector companies found environmental accounting
and reporting, an area of interest as one of the main causes for not having
formal environmental accounting reporting system in financial statements
and 10 (14%) companies agreed with the reason of lack of clear-cut
government policy on formal environmental accounting and reporting system
while 35 (51%) found lack of accounting standards responsible for non use of
formal Environmental Accounting and Reporting. Whereas 5 (7%) companies
felt that voluntary nature of environmental accounting as one of the causes for
no formal Environmental Accounting and Reporting. While 3 (4%) companies
faced difficulty in measuring and defining environmental cost and benefits as
the causes for the absence of formal environmental accounting and reporting.
Whereas 2 (3%) companies indicated that the expensiveness is the main cause
for not having formal environmental accounting and reporting system. No
one has regarded the time factor as being cause of concern. 9 (13%) companies
thought that it is not required as per law. 5 (7%) companies are of the opinion
that difficulty in measuring the environmental information is also responsible
191
for no formal environmental accounting and reporting system. Not even a
single company thinks that it is not useful in decision-making at all.
Similarly, No private company i.e. 0 (0%) found environmental
accounting and reporting , not an area of interest as one of the main causes
for no formal environmental accounting reporting system in financial
statements and 15 (17%) companies agreed with the reason of lack of clear cut
government policy is reason for no formal environmental accounting and
reporting system. 50 (57%) held lack of accounting standards responsible for
non use of a formal Environmental Accounting and Reporting , and 5 (6%)
regarded Voluntary nature of environmental accounting another cause for not
using a formal Environmental Accounting and Reporting system . While 8 (9
%) showed difficulty in measuring and defining environmental cost and
benefits as another cause for non formal environmental accounting and
reporting. 2 (3%) regarded expensiveness as another cause for no formal
environmental accounting and reporting system. Any of them has not found
that the time factor as the significant cause of non use of Environmental
Accounting and Reporting while 3 (3%) companies think that it is not
required by the law. 2 (2%) companies think that difficulty in measuring the
environmental information is also an important cause for no formal
environmental accounting and reporting system. No company thinks that it is
not useful in decision-making.
Significantly both the Public and private sector Indian companies one of
the opinion that lack of accounting standards is one of the main causes for not
192
having formal environmental accounting and reporting system. There is no
significant difference in the opinion of public and private sector Indian
companies about the other causes as concluded in this question for not
having formal environmental accounting and reporting system.
TABLE:-4.13
ORGANISATIONAL STRUCTURE FOR ENVIRONMENTAL
ACCOUNTING AND REPORTING IN INDIAN PUBLIC & PRIVATE
SECTOR COMPANIES
Response (a) A post of (b) Separate (c) A committee (d) Management (e) Any other
Category corporate department to monitor whereby arrangement environmental
company’s corporate (please specify officer environmental. environmental
responsibility accounting and activities reporting forms part of the executive work.
No. Percent No. Percent No. Percent No. Percent No.
Percent
PUBLIC SECTOR INDIAN COMPANIES
Yes 15 22 15 22 35 51 02 03 02 03
No 30 43 35 51 20 29 30 43 35 51
Not Response 24 35 19 28 14 20 37 54 32 46
Total 69 100 69 100 69 100 69 100 69 100
PRIVATE SECTOR INDIAN COMPANIES
Yes 30 34 20 23 40 46 10 11 02 02
No 25 29 30 34 25 29 30 34 40 46
Not Response 32 37 37 43 22 25 47 54 45 52
Total 87 100 87 100 87 100 87 100 87 100
193
Q.13 Have any of the following creation been made by you in
the organizational structure to accommodate corporate
environmental accounting and reporting?
(a) A post of corporate environmental officer [ ]
(b) Separate department. [ ]
(c) A committee to monitor company’s environmental
responsibility activities. [ ]
(d) Management where by corporate environmental
accounting and reporting forms part of the executive work.
[ ]
(e) Other arrangement please specify
………………………………………………………………
……………………………………………………………...
Above analyses need to accommodate in the organizational structure the
corporate environmental accounting and reporting activities in Indian public
and private sector companies. 9 (15%) Indian public sector companies are in
favour of a post of corporate environmental officer for environmental
accounting and reporting, while 30 (43%) companies are not in favour of it
and 24 (35%) companies did not respond. Regarding a separate department in
the organizational structure to accommodate corporate environmental
accounting and reporting in Indian public sector companies, 15 (35 %) desired
it. Whereas 35 (51%) companies opposed It. 19 (28%) companies did not
respond. In case of a committee to monitor company’s environmental
194
responsibility activities, 35 (51%) companies favoured it and 20 (29%)
companies did not want it. 14 (20%) companies gave no response .In case of
Management where by corporate environmental accounting and reporting
forms part of the executive work, 2 (3%) companies are are in favour of it
while 30 (43%) companies discarded it and 37 (54%) companies did not
respond. About other arrangements for the organizational structure to
accommodate corporate environmental accounting and reporting, 2 (3%)
agreed while 35 (51%) did not agree and 32 (46%) companies did not respond
for it.
In case of private sector companies 30 (34%) companies are in favour of a
post of corporate environmental officer for environmental accounting and
reporting, while 25 (29%) companies did not favour it and 32 (37%)
companies gave no response. For having a separate department in the
organizational structure to accommodate corporate environmental accounting
and reporting. 20 (23 %) companies favoured it. Whereas 30 (29%) companies
did not want it and 37 (54%) companies gave no response. In case of a
committee to monitor company’s environmental responsibility activities, 40
(46%) companies are in favour of it. While 25 (29%) companies opposed it and
22 (25%) companies made no comment. In case of Management, where
corporate environmental accounting and reporting forms part of the executive
works, 10 (11%) companies desired it. While 30 (29%) companies discarded it
and 47 (54%) companies gave no comment about a committee to monitor
company’s environmental responsibility activities. 11 (13%) about other
195
arrangement in the organizational structure to accommodate corporate
environmental accounting and reporting, 2 (2%) agreed while 40 (46%)
opposed and 45 (52%) companies not responded for it.
Therefore it can be concluded that a large number of the public and
private sector Indian companies are in favour of a committee to monitor
company’s environmental responsibility activities in organizational structure
to accommodate corporate environmental accounting and reporting. There is
no significant difference in the opinion of public and private sector Indian
companies about the organizational structure to accommodate corporate
environmental accounting and reporting.
TABLE - 4. 14
BENEFICIALITY OF ADAPTATION OF ENVIRONMENTAL
ACCOUNTING AND REPORTING
Response Category Public Sector Private Sector
No. Percentage No. Percentage
yes 65 94 70 80
No 0 0 5 06
Not Response 4 06 12 14
Total 69 100 87 100
Q.14 Is adaptation of environmental accounting and reporting
beneficial? [ ]
Table 14 indicates the beneficialy of adaptation of environmental
accounting and reporting in Indian public and private sector companies.
196
So far as public sector companies are concerned, 65 (94%) companies
found of adaptation of environmental accounting and reporting beneficial.
Whereas none of them discarded it and 4 (6%) companies did not respond
In case of private sector companies, 70 (80%) agreed with the benefits of
adaptation of environmental accounting and reporting. While, 5 (6%)
companies disagreed and 12 (14%) private companies expressed no opinion
about the beneficiality of adaptation of environmental accounting and
reporting in Indian private sector companies.
It is therefore obvious that a large number of the public and private
sector Indian companies found adaptation of environmental accounting and
reporting quite beneficial as there is no significant difference in the opinion of
public and private sector companies about the beneficiality of adaptation of
environmental accounting and reporting in Indian public and private sector
companies.
TABLE -4. 15
USEFULNESS OF ENVIRONMENTAL COST INFORMATION FOR
BETTER MANAGERIAL DECISION-MAKING
Response category Public Sector companies Private Sector companies
No. No Percentage No
(a) Cost reductions 15 22 20 21.74
(b) Appraisal of investments for environmental risks 20 29 30 34.48
(c) Evaluation of environmental performance of a company 10 14 30 17.24
197
(d) Designing various processes using environmental friendly technologies 04 06 9.2
(e) Providing better estimates of total cost of producing a product. 02 03 8 5.74
(f) Pricing of the products. 01 01 5 2.30
(g) Profitability. 05 07 2 2.30
(h) Competitive advantages. 08 12 2
(i) Compliance with environmental laws. 0 3 3.45
(j) If any other (Please specify). 04 06 0 0
Not Responded 0 0 2 2.30
Total 69 100 87 100
Q.15 If yes, do you think that environmental cost information generated by
environmental accounting will be useful for better managerial decision
relating to,
(a) Cost reductions [ ]
(b) Appraisal of investments for environmental risks [ ]
(c) Evaluation of environmental performance of a company [ ]
(d) Designing various processes using environmental friendly
technologies [ ]
(e) Providing better estimates of total cost of producing a product.[ ]
(f) Pricing of the products. [ ]
(g) Profitability. [ ]
(h) Competitive advantages. [ ]
(i) Compliance with environmental laws. [ ]
(j) If any other (Please specify). [ ]
198
……………………………………………………………
……………………………………………………………
So far as public sector companies are concerned, 15 (22%) companies
considered cost reduction useful for environmental cost information for better
managerial decision making. While 20 (15%) companies regarded appraisal of
investments for environmental risks quite significant environmental cost
information for better managerial decision making. In case of evaluation of
environmental performance of companies only 20 (29%) companies are
desired it, while in case of designing various processes using environmental
friendly technologies only 4 (6%) companies wanted it, and only 2 (3%)
companies agreed that environmental cost information is useful for pricing of
products and only 1 (1%) company agreed with the profitability and 5 (7%)
companies with competitive advantages and 8 (12%) companies found
compliance with environmental laws useful environmental cost information
for better managerial decision making. Only 4 (6%) companies did not
respond about the usefulness of environmental cost information for better
managerial decision making in public sector Indian companies.
In case of private sector companies 20 (23%) companies considered cost
reduction as useful environmental cost information for better managerial
decision-making. While 30 (34%) companies regarded appraisal of
investments for environmental risks useful for the environmental cost
information for better managerial decision-making. In case of evaluation of
environmental performance of companies only 15 (17%) companies favoured
199
it, while about designing various processes using environmental friendly
technologies, only 8 (9%) companies are satisfied with it. while only 5 (6%)
companies found environmental cost information useful for pricing of
products and only 2 (2%) companies agreed with profitability and 2 (2%)
companies with competitive advantages and 3 (3%) agreed with compliance
with environmental laws. Only 2 (2%) companies did not comment on the
usefulness of environmental cost information for better managerial decision
making.
Therefore no significant difference in the opinion of public and private
sector Indian companies about the usefulness of environmental cost
information for better managerial decision making in public and private
sector Indian companies is observed.
TABLE – 4.16
STATEMENT IN THE COMPANY POLICY RELATING ESPECIALLY TO
ENVIRONMENTAL ACCOUNTING AND REPORTING IN INDIAN
PUBLIC & PRIVATE SECTOR COMPNIES
Response category Public Sector Companies Private Sector Companies
No. Percent No. Percent
Yes 02 03 0 0
No. 60 87 85 98
No Response 07 10 02 02
Total 69 100 87 100
200
Q 16 Is there a statement in the company policy relating especially to
environmental accounting and reporting? [ ]
So far as public sector companies are concerned, only 2 (2%) companies
are in favour of the statement in the company policy relating especially to
environmental accounting and reporting. While 60 (87%) companies are not in
favour of it and 7 (10%) companies did not respond.
In case of private sector companies, none out of 87 is in favour of the
statement in the company policy relating especially to environmental
accounting and reporting. While 85 (98%) companies are not in favour of it
and 2 (2%) private companies did not respond
It is therefore obvious that a large number of the public and private
sector Indian companies are not in favour of the statement in the company
policy relating especially to environmental accounting and reporting in
companies.
TABLE -4. 17
MONITORING OF ENVIRONMENTAL ACCOUNTING AND
REPORTING
Response Management Unions Government Social auditors Accountants Others category No. Percentage No.PercentageNo.PercentageNo.PercentageNo. Percentage No.Percentage
PUBLIC
Yes 40 58 5 07 45 65 25 36 20 29 2 03
No 25 36 45 66 20 29 30 43 35 51 60 87
Not Response04 06 19 27 04 06 14 20 14 20 07 10
201
Total 69 100 69 100 69 100 69 100 69 100 69 100
PRIVATE
Yes 60 69 10 11 40 46 30 34 35 40 2 02
No 20 23 60 69 30 34 20 23 25 29 80 92
No Response 07 08 17 20 17 20 37 43 27 31 05 06
Total 87 100 87 100 87 100 87 100 87 100 87 100
.17 Who should monitor environmental accounting and reporting?
(a) Management. [ ]
(b) Unions. [ ]
(c) Government. [ ]
(d) Social auditors. [ ]
(e) Accountants. [ ]
(f) Other please specify [ ]
……………………………………………………………………
………………………………………………………………………
Regarding monitoring of environmental accounting and reporting in
public sector companies are concerned, 40 (48%) companies preferred
management while 25 (36%) companies discarded it and 4 (6%) companies
not responded. In case of unions, 5 (7%) agreed with it whereas 45 (65%)
companies did not consider Unions as responsible for monitoring the
environmental accounting and reporting in the public sector Indian
companies and 29 (42%) gave no response. 45 (65%) favoured Government
while 20 (29%) companies did not consider it accountable for monitoring the
environmental accounting and reporting and 4 companies (6%) not responded
the query. About social auditors, 25 (36%) companies prefer it and 30
202
companies (44%) rejected and 14 companies (21%) not responded. Similarly in
case of accountants, 20 (29%) public companies considered them quite
appropriate and 35 companies ( 51%) disagreed. 14 companies (20%) gave no
opinion about accountants for monitoring the environmental accounting and
reporting.
In case of Indian private sector companies, 60 (69%) companies
considered management responsible for monitoring environmental
accounting and reporting and 20 (21%) companies disagreed with it. While 7
(8%) not responded. 10 (11%) companies held Unions responsible for
environmental accounting and reporting whereas 60 (69%) companies
discarded it, and 17(20%) companies not responded. Regarding government,
40 (46%) companies considered it to be appropriate for monitoring
environmental accounting and reporting while 30 (34%) disagreed for and 17
(20%) Indian private companies made no comment on responsibility for
monitoring the environmental accounting and reporting. While, 30 (34%)
companies found social auditors responsible for environmental accounting
and reporting while 20 (23%) companies disagreed and 37 (43%) not
responded. 35 (40%) private sector companies considered accountants
responsible for monitoring the environmental accounting and reporting.
While 25 (29%) companies agreed with it and 27 out of 87 (31%) gave no
opinion about accountants responsibility for monitoring the environmental
accounting and reporting.
203
TABLE -4. 18
FORMAL ENVIRONMENTAL ACCOUNTING & REPORTING
AWARENESS TRAINING PROGRAMMES FOR EMPLOYEES IN PUBLIC
AND PRIVATE SECTOR INDIAN COMPANIES
Response Category Public Sector Companies Private Sector Companies
No. Percent No. Percent
Yes 0 0 0 0
No. 65 94 84 97
No Response 04 06 03 03
Total 69 100 87 100
Q.18. Does your company have a formal Environmental
Accounting and Reporting awareness training programmed
for your employees? [ ]
In case of public sector companies, out of 69 no company is having a formal
Environmental Accounting and Reporting awareness training programmes
for employees. Whereas 65 out of 69 (94%) companies indicated it as a lapse
and 04 (6%) companies not responded.
On the other hand, out of 87 no private sector company is having a
formal Environmental Accounting and Reporting awareness training
programmes for employees. While 84 (97%) companies pointed out as a
shortcoming and 3 (3%) private companies did not respond.
There is no significant difference in the opinion of public and private
sector companies about the formal Environmental Accounting and Reporting
awareness training programme for employees. Therefore that a large number
204
of the public and private sector Indian companies considered it a major lapse
in the respect of formal Environmental Accounting and Reporting awareness
training programmes for employees in Indian public and private sector
companies.
TABLE – 4.19
METHODS FOR ENVIRONMENTAL ACCOUNTING AND REPORTING
AWARENESS TRAINING PROGRAMMED
FOR EMPLOYEES INDIAN PUBLIC & PRIVATE SECTOR COMPANIES
Response category Public Sector companies’ Private Sector companies
No. Percent No. Percent
(a) Companies seminar 07 10 06 08
(b) Workshop 05 07 10 11
(c) External faculty 05 07 10 11
(d) On the job 42 62 42 48
(e) No Response 10 14 19 22
Total 69 100 87 100
Q. 19 If yes, by whom?
(a) Companies seminar [ ]
(b) Workshop [ ]
(c) External faculty [ ]
(d) On the job [ ]
205
So far as public sector companies are concerned, 07 (10%) Companies
considered seminar as an effective mode of formal Environmental Accounting
and Reporting awareness training programme for employees. 5 (7%)
companies found Workshops and 5 (7%) companies preferred External
faculty, 42 (61%) companies are in favour of on the job mode of formal
Environmental Accounting and Reporting awareness training programme
and 10 (14%) companies made no comment.
In case of private sector companies, 6 (7%) found seminar as a good mode
of formal Environmental Accounting and Reporting awareness training
programmes for employees. 5 (6%) companies preferred Workshops and 5
(6%) companies agreed with External faculty. 60 (69%) companies considered
on the job mode of formal Environmental Accounting and Reporting
awareness training programmed for employees effective and 11 (13%)
companies gave no opinion about it.
No significant difference in the opinion of public and private sector
Indian companies about the proper mode for formal Environmental
Accounting and Reporting awareness training programme has been found as
a large number of the public and private sector Indian companies are in
favour of on the job mode for formal Environmental Accounting and
Reporting awareness training programmes for employees in public and
private sector Indian companies.
206
TABLE – 4.20
APPLICATION OF ANY SPECIAL NORMS FOR ENVIRONMENTAL
ACCOUNTING AND REPORTING IN INDIAN PUBLIC & PRIVATE
SECTOR COMPANIES IN THE LIGHT OF LIBERALISATION
Response category Public Sector companies’ Private Sector companies
No. Percent No. Percent
Yes 0 0 0 0
No 63 91 84 97
No Response 06 09 03 3
Total 69 100 87 100
Q. 20 Have you introduced any special norms for environmental
accounting and reporting in the light of liberalization if yes
please specify.
……………………………………………………………………
………………………………………………………….
No public sector company out of 69 is in favour of special norms for
environmental accounting and reporting in the light of liberalization. 63 (91%)
companies disagreed it and 6 (9%) companies gave no response.
Whereas, out of 87 private sector companies no company favoured the
availability of special norms for environmental accounting and reporting in
the light of liberalization and 84 (97%) companies discarded it and 3 (3%)
private companies did not respond.
Therefore it is obvious that a large number of public and private sector
Indian companies have not favoured adoption of special norms for
environmental accounting and reporting in the light of liberalization as there
207
is no significant difference in the opinion of public and private sector
companies on the availability of special norms for environmental accounting
and reporting in the light of liberalization.
Table 21 depicts the specified budget allocation for the environmental
accounting and reporting in Indian public and private sector companies.
TABLE – 4.21
SPECIFIED BUDGET ALLOCATION FOR THE ENVIRONMENTAL
ACCOUNTING AUDITING IN INDIAN PUBLIC & PRIVATE SECTOR
COMPANIES
Response category Public Sector Companies Private Sector Companies
No. Percent No. Percent
Yes 0 0 0 0
No. 60 87 82 94
No Response 09 13 05 06
Total 69 100 0 0
Q.21 Does your company provide any specified budget allocation for the
environmental accounting and reporting? [ ]
No public sector company out of 69 is found in favour of the specified budget
allocation for the environmental accounting and reporting and 60 (87%) did
not favour it. 9 (13%) companies not responded about specified budget
allocation for the environmental accounting and reporting in the public sector
companies.
208
In case of private sector, all companies not favoured a specified budget
allocation for the environmental accounting and reporting. 82 (94%) have no
such budget while 5 private sector companies (6%) expressed no opinion
about the specified budget allocation for the environmental accounting and
reporting in the public sector companies.
Obviously, a large number of the public and private sector Indian
companies have not specified budget allocation for the environmental
accounting and reporting.
Table 22 shows the capitalization of environmental costs in
environmental accounting and reporting in Indian public and private sector
companies.
TABLE -4. 22
CAPITALISATION OF ENVIRONMENTAL COST FOR
ENVIRONMENTAL ACCOUNTING AND REPORTING IN INDIAN
PUBLIC & PRIVATE SECTOR COMPANIES
Response category Public Sector Companies Private Sector Companies
No. Percent No. Percent
a) Improving efficiency of existing assets. 20 30 30 34
b) Increasing capacity of existing assets.25 36 25 29
c) Improving safety of existing assets. 10 14 15 17
d) Reducing environmental contamination likely to occur as a result of future operations. 0 0 0 0
e) Preventing environmental pollution. 0 0 0 0
f) Conserving the environment. 0 0 0 0
209
g) If any other (please specify) 0 0 0
h) No Response 14 20 17 20
Total 69 100 87 100
Q.22 which of the following environmental cost should be capitalized?
(a) Improving efficiency of existing assets. [ ]
(b) Increasing capacity of existing assets. [ ]
(c) Improving safety of existing assets. [ ]
(d) Reducing environmental contamination likely to occur as a [ ]
result of future operations.
(e) Preventing environmental pollution. [ ]
(f) Conserving the environment. [ ]
(g) If any other (please specify)
…………………………………………………………………
……………………………………………………………………
20 public sector companies (29%) are in favour of the capitalization of
improving efficiency of existing assets for environmental accounting and
reporting, while 25 (36%) companies are in favour of the capitalization of
increasing capacity of existing assets and 10 (14%) companies are in favour of
the capitalization of improving safety of existing assets for the environmental
accounting and reporting. Whereas not even a single company is in favour of
the capitalization of the Reducing environmental contamination likely to
occur as a result of future operations, preventing environmental pollution and
cost of conserving the environment. While 2 Indian public sector companies
210
pointed out that pollution control equipment and machine should be
capitalized for the environmental accounting and reporting and 14 (20%)
companies did not respond.
Similarly, in case of private sector companies, 30 (43%) are in favour of
the capitalization of improving efficiency of existing assets for environmental
accounting and reporting. While 25 (29%) companies are in favour of the
capitalization of increasing capacity of existing assets and 15 (17%) companies
are in favour of the capitalization of improving safety of existing assets for the
environmental accounting and reporting. Whereas not a single Company is in
favour of the capitalization of the Reducing environmental contamination
likely to occur as a result of future operations, preventing environmental
pollution and cost of conserving the environment. 17 (20%) Indian private
sector companies not responded for capitalization of environmental cost in
the environmental accounting and reporting.
It is therefore obvious that a large no. of public sector Indian companies
as well as private sector companies are in favour of the capitalization of
improving efficiency of existing assets for environmental accounting and
reporting. There is no significant difference in the opinion of public and
private sector Indian companies about the capitalization of environmental
cost for corporate environmental accounting and reporting in Indian public
and private sector companies.
211
The table 23 depicts various environmental costing approaches according
to order of importance in public and private sector Indian companies.
TABLE -4. 23
VARIOUS ENVIRONMNTAL COSTING APPORACH ACCORDING TO
ORDER OF IMPORTANCE FOR ENVIRONMENTAL ACCOUNTING
AND REPORTING IN INDIAN PUBLIC &PRIVATE SECTOR
COMPANIES
Response (a) Current cost (b) Projected cost (C) Undiscounted (d) If any
other category involved in of performing projected (please specify)
performing environmental expenditure the required protection
activities activities discounted at risk free trade.
Private Public Private Public Private Public Private Public Sector Sector Sector Sector Sector Sector Sector Sector companies companies companies companies companies companies companies companies
Rank No. Percent No.Percent No.Percent No.Percent No. Percent No.Percent No.Percent No. Percent
Rank 1 20 29 31 36 25 36 13 15 21 30 0 0 0 0
Rank 2 30 43 37 43 17 25 27 31 19 28 27 31 0 0 0 0
Rank 3 07 10 11 12 13 19 35 40 21 30 31 36 0 0 0 0
Rank 4 09 14 06 07 11 16 07 08 04 06 03 03 0 0 0 0
No Response 3 04 2 02 3 04 5 06 04 06 26 30 0 0 0
Total 69 100 87 100 69 100 87 100 69 100 87 100 0 0 0 0
Q.23 Which approach do you prefer? Please specify order of importance?
(a) Current cost involved in performing the required activities [ ]
212
(b) Projected cost of performing environmental protection
activities discounted at risk free trade. [ ]
(c) Undiscounted projected expenditures [ ]
(d) If any other (please specify)
………………………………………………………………
…………………………………………………………………
There are three environmental costing approaches: first- Current cost
involved in performing the required activities, second projected cost of
performing environmental protection activities discounted at risk free trade
and third undiscounted projected expenditures. In the first case only 20 (29%)
public companies gave the first rank, 30 (44%) the second rank, 9 (13%)
companies gave the third rank and 7 (10%) companies gave the fourth while
13 (19%) companies did not give response about first approach. In case of
second approach only 25 (36%) companies gave the first rank, 17 (25%) the
second rank, 13 (19%) the third rank and 11 (16%) the fourth rank while rest
of them 13 (19%) companies did not respond. Regarding third approach, 13
(19%) companies gave the first rank, 19 (25%) companies gave the second
rank, 21 companies (30%) the third rank and 4 companies (6%) the fourth
while rest of them 12 companies (17%) not responded.
Whereas, 31 private sector companies (36%) gave the first rank, 37 (43%)
companies second rank, 11 (13%) third rank and 6 companies (7%) the fourth
rank while rest of them i.e. 12 (14%) companies did not give respond for first
approach. In case of second approach only 15 (17%) companies gave the first
213
rank, 27 companies (31%) second rank, 35 companies (40%) gave third rank
and 7 (8%) companies the fourth, while remaining 3 (3 %) companies did not
respond for second approach. Regarding third approach only 21 (24%)
companies gave the first rank, 27 companies (31%) the second rank, 31 (35%)
the third rank and 3 companies (3%) the fourth rank while remaining 5
companies (6 %) did not respond for this approach.
It is evident that there is no significant difference in the opinion of public
and private sector Indian companies about the various environmental costing
approaches according to order of importance.
Table 24 shows the significance of environmental auditing in public and
private sector Indian companies.
TABLE -4. 24
SIGNIFICANCE OF ENVIRONMENTAL ACCOUNTING & AUDITING
IN INDIAN PUBLIC & PRIVATE SECTOR COMPANIES
Response category Public Sector Companies Private Sector Companies
No Percent No Percent
(a) Improve credibility of information provided. 20 29 25 29
(b) Better dependability on environmental data and reports 25 36 30 34
(c) Better compliance with environmental law 05 07 07 08
d) Better compliance to regulatory norms. 05 07 07 08
(e) No Response 14 20 18 21
Total 69 100 87 100
214
Q. 24 If your answer is yes, do you agree that environmental
auditing is necessary to,
(a) Improve credibility of information provided. [ ]
(b) Better dependability on environmental data and reports. [ ]
(c) Better compliance with environmental law [ ]
d) Better compliance to regulatory norms. [ ]
20 (29%) public sector companies considered environmental auditing
necessary to improve credibility of information provided. 25 (36%) companies
agreed that it is necessary for Better dependability on environmental data and
reports. While 5 companies (7%) were in favour of environmental audit which
is necessary for better compliance with environmental laws. 5 companies (7%)
were satisfied with better compliance to regulatory norms and 14 (20%)
companies not responded.
In case of private sector companies, 25 (29%) companies considered
environmental auditing significant for improving credibility of information
provided. Whereas 30 (34%) companies agreed that it is necessary for better
dependability on environmental data and reports. While 7 (8%) companies
argued that environmental audit is necessary for better compliance with
environmental law. Only 7 companies (8%) found essential for better
compliance to regulatory norms and 18 (21%) companies expressed no
opinion about the significance of environmental auditing.
215
No significant difference in the opinion is noted about the significance of
environmental auditing in public and private sector Indian companies.
TABLE – 4.25
PERSON RESPONSIBLE FOR THE TASK OF
ENVIRONMENTAL AUDIT
Response Internal External Chartered Engineers Qualified A team of category
auditors auditors accountants environmental -all these Other persons auditors
PUBLIC SECTOR
No.percen-No.percen-No.percen- No. percen- No. percen- No. percen- No. percen- tage tage tage tage tage tage tage
Yes 10 14 28 41 23 33 2 03 39 57 19 28 0 0
No 50 73 29 42 27 39 49 71 17 25 37 54 0 0
No Response 09 13 12 17 19 28 18 26 13 19 13 18 69 100
Total 69 100 69 100 69 100 69 100 69 100 69 100 69 100
PRIVATE SECTOR
Yes 27 31 36 41 35 41 1 01 49 56 27 31 0 0
No 39 45 27 31 29 33 73 84 21 24 43 49 78 90
No Response 21 24 24 28 23 26 13 15 17 20 17 20 09 10
Total 87 100 87 100 87 100 87 100 87 100 87 100 87 100
Q.25 Who in your opinion should be entrusted the task of
environmental audit?
(a) Internal auditor [ ]
(b) External auditor [ ]
(c) Chartered Accountant [ ]
(d) Cost accountant [ ]
216
(e) Engineers [ ]
(f) Qualified environmental auditors [ ]
(g) A team of above persons [ ]
(h) If any other (please specify)
………………………………………………………
……………………………………………………………
In public sector companies, 10 (14%) companies agreed with internal auditor
as person responsible for the task of environmental audit while 50 (73%) did
not agree with internal auditors and 9 (13%) not responded. In case of
external auditors 28 (41%) agreed with external auditors whereas 29 (42%)
companies did not agree and 12 (13%) not responded about the external
auditors as persons responsible for the task of environmental audit.
Regarding chartered accountant 23 (33%) companies agreed with Chartered
Accountant while 27 (26%) did not agree and 19 (28%) not responded. In the
case of engineer, 2 (3%) companies agreed with engineers and 49 (71%) did
not agree and 18 (26%) not responded for the engineers. About qualified
environmental auditors 39 (56%) companies agreed with qualified
environmental auditors and 13 (19%) not responded for the qualified
environmental auditors as an appropriate person for the task of
environmental audit. In case of a team of above said persons 19 (28%)
companies favoured such team while 37 (54%) companies opposed it and 18
(26%) not responded.
217
Similarly, in private sector companies 27 (31%) companies regarded
internal auditor as an appropriate person for the task of environmental audit
while 39 (approx 45%) are not satisfied with internal auditors and 21 (24%)
not responded for the task of environmental audit. In case of external
auditors 36 (41%) companies agreed with external auditors whereas 27 (31%)
companies did not agreed and 24 (28%) did not respond. About chartered
accountants 35 (40%) companies favoured Chartered Accountant while 29
(33%) disagreed and 23 (26%) not responded. Regarding engineer 1 (1%)
companies agreed and 73 (82%) companies opposed them and 13 (15%) not
responded. In case for qualified environmental auditors, 49 (56%) companies
found qualified environmental auditors good enough to environmental
accounting and reporting , whereas 21 (24%) companies did not agree and 17
(20%) companies not responded .About a team of above persons for the task
of environmental audit, 27 (31%) companies favoured such a team whereas
43 (49%) companies disagreed and 17, (20%) companies did not respond for
the above team.
It is therefore obvious that a large number of the public and private
sector Indian companies are in famous of qualified environmental auditors for
the task of environmental audit .There is no significant difference of opinion
of public and private sector Indian companies about the external auditors for
the task of environmental audit.
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TABLE – 4.26
CREATION OF SEPARATE ENVIRONMENTAL AUDIT DEPARTMENT
FOR ENVIRONMENTAL ACCOUNTING IN INDIAN PUBLIC &
PRIVATE SECTOR COMPANIES
Response category Public Sector Companies Private Sector Companies
No. Percent No. Percent
Yes 0 0 0 0
No 62 90 75 86
Not Response 17 10 12 14
Total 69 100 87 100
Q.26 Does your company have a separate environmental audit department?
[ ]
Out of 69, not even a single public sector company founded of the
separate environmental audit department for environmental accounting and
reporting. While 62 (90%) companies opposed it and 17 (25%) companies gave
no response.
On the other hand, in case of private sector companies, out of 87 no
company is favour of separate environmental audit department for
environmental accounting and reporting. While 75 (86%) companies did not
favour it and 12 (14%) private companies expressed no opinion about a
separate environmental audit department for environmental accounting and
reporting.
219
Thus a large number of the public and private sector Indian companies
are not in favour of having the separate audit department for environmental
accounting and reporting.
TABLE -4.27
LEGISLATION TO FACILITATE CORPORATE ACTIVITY IN
ENVIRONMENTAL ACCOUNTING AUDITING IN INDIAN PUBLIC &
PRIVATE SECTOR COMPANIES
Response category Public Sector companies’ Private Sector companies
No. Percent No. Percent
Yes 35 51 30 34
No 25 36 40 46
No Response 09 13 17 20
Total 69 100 87 100
Q.27 Should Government bring in more legislation to facilitate
corporate activity in environmental accounting and reporting? [ ]
35 (51%) public companies argued that government should bring in more
legislation to facilitate corporate activity in environmental accounting and
reporting. While 25 (36%) public companies opposed it and 9 (13%) public
companies did not respond.
30 (34%) private companies agreed that government should bring in
more legislation to facilitate corporate activity in environmental accounting
and reporting. Whereas 40 (46%) private companies disagreed with it and 17
(20%) companies did not disclose their opinion about government bringing in
220
more legislation to facilitate corporate activity in environmental accounting
and reporting.
A large number of the public and private sector Indian companies argued
that government should bring in more legislation to facilitate corporate
activity in environmental accounting and reporting noted as no significant
difference of opinion between public and private sector companies is noted
about government’s bringing in more legislation to facilitate smoother
corporate activity in environmental accounting and reporting.
TABLE – 4.28
NEED OF ACCOUNTING STANDARD ON ENVIRONMENTAL
ACCOUNTING AND REPORTING
Response category Public Sector companies Private Sector companies
No. Percentage No. Percentage
Yes 50 72 60 69
No 05 08 10 11
Not Response 14 20 17 20
Total 69 100 87 100
Q.28 If yes, is there a need to introduce Accounting Standard on
environmental accounting and reporting? [ ]
50 (72%) public companies showed a need of accounting standards on
environmental accounting and reporting and 05 (7%) public companies did
not favour it whereas 14 (20%) companies not responded.
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In case of private sector companies 60 (69%) companies favoured the
need of accounting standards in environmental accounting and reporting.
While only 10 (11%) companies discarded it and 17 (17%) private companies
gave no response.
From the above data it becomes obvious that a large number of the public
and private sector Indian companies are in favor of accounting standard on
environmental accounting and reporting. There is no significant difference in
the opinion of public and private sector companies for the need of accounting
standards in environmental accounting and reporting.
TABLE –4. 29 ACTIVITIES IN ENVIRONMENTAL ACCOUNTING AND REPORTING
Response category Public Sector companies’ Private Sector companies
Level of activities in terms Prevention or repair of environmental damages of prevention or repair of such as reusing disposable material, waste environmental damage management
No. Percentage No. Percentage
High 0 0 0 0
Low 59 85 65 75
Same 0 0 0 0
No Response 10 15 22 25
Total 69 100 87 100
2. Aesthetic improvement such as tree plantation
No. Percentage No. Percentage
High 02 03 05 06
Low 50 72 70 80
Same 0 0 0 0
No Response 17 25 12 14
Total 69 100 87 100
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3. Pollution control measures such as for keeping water, air, noise and colid waste pollution under control.
No. Percentage No. Percentage
High 55 80 60 69
Low 05 07 03 03
Same 0 0 0 0
No Response 09 13 24 28
Total 69 100 87 100
4. Conservation of natural resources like land, energy and water.
No. Percentage No. Percentage
High 03 04 4 05
Low 52 75 63 72
Same 0 0 0 0
No Response 14 20 20 23
Total 69 100 87 100
Q. 29 Here you will find a list of activities in environmental accounting and
reporting in the four areas i.e. prevention or repair of environmental
damage, aesthetic improvement, pollution control measures and
conservation of natural resources, would you kindly indicate the level of
activity engaged in by your company. Please give the level of activities
in terms of investment in Environmental related activities by your
company in these activities in relation to your total investment since
liberalization?
Kind of Activity Level of Activity in terms of investment
1. Prevention or repair of environmental damages. Such as
reusing disposable material, waste management
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High [ ] Low [ ] Same [ ]
2. Aesthetic improvement such as tree plantation
High [ ] Low [ ] Same [ ]
3. Pollution control measures such as for keeping water, air, noise and colid
waste pollution under control.
High [ ] Low [ ] Same [ ]
4. Conservation of natural resources like land, energy and water.
High [ ] Low [ ] Same [ ]
There are four activities in public and private companies relating to
environmental protection and preservation , that is 1. Prevention or repair of
environmental damages, such as reusing disposable material, waste
management 2. Aesthetic improvement such as tree plantation 3. Pollution
control measures such as for keeping water, air, noise and solid waste
pollution under control; and 4. Conservation of natural resources like land,
energy and water to be separated troughs environmental accounting and
reporting. There are four types of opinion responds by companies categorized
as high, low and same and no response. In case of public companies
regarding performing first activities, no company out of 69 (86%) companies
are in favour of low category and no any company responded for the same
category and 10 (14%) not responded. In the case of second activity, 2 (3%)
companies undertake high level activities. 50 (72%) companies agreed with
the low category and no one company is satisfied with the same category and
17 (25%) not responded for any category. In case of third activity, 55 (80%)
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companies are in favour of high level category and 5 (7%) companies with the
low category and no company favoured the same category and 09 companies
(13%) not responded about any category. In case of fourth category, 3 (4%)
responded for the first category and 52 (75%) companies favoured the same
category and 14 (20%) not responded about any category.
In case of private companies regarding first activities, no companies from
the sample is satisfied with high level category and 65 (75%) companies are in
favour of low level category and no company responded for the same level
category and 10 (14%)companies not responded for any categories. In the
case of second activity 5 (6%) companies are agreed with high level category.
70 (80%) companies are satisfied with the low category and no company is
favoured the same category and 12 (14%) not responded for any category.
Regarding the third activity 60 (69%) companies are in favour of high level
category and 3 companies (3%) desired the low level category and no
company satisfied with the same level category and 24 (28%) not responded
about any category. In case of fourth activities, 4 (5%) responded for the high
level category and 63 (72%) companies favoured the same level category and
no any company is in favour same level category and 20 (20%) not responded
at all.
Table 30 presents opinion about the interested group of environmental
information related to environmental accounting and reporting in Indian
public and private sector companies.
225
TABLE -4.30
INTERESTED GROUPS FOR ENVIRONMENTAL INFORMATION
REATED TO ENVIRONMENTAL REPORTING IN INDIAN PUBLIC &
PRIVATE SECTOR COMPANIES
Response Category Public Sector Companies Private Sector Companies
No. Percent No. Percent
(a) Management of the company 10 14 15 17
(b) Owners of the company 09 13 10 12
(c) Employees 0 0 0 0
(d) Competitors 0 0 0 0
(e) Insurers 0 0 0 0
(f) Government 15 22 15 17
(g) NGO/Social activist 16 23 20 23
(h) Lenders 0 0 0 0
(i) Financial advisors and analyst 0 0 0 0
(j) Journalist/or media 0 0 0 0
(k) Suppliers 0 0 0 0
(l) Customers 0 0 0 0
(m) Environmental organizations 12 18 15 17
(n) Society at large 06 09 07 08
(o) If any other (please specify) 0 0 0 0
(p) No Response 01 01 05 06
Total 69 100 87 100
Q.30 In your opinion who is the interest groups of environmental information
related to environmental reporting?
(a Management of the company [ ]
(b) Owners of the company [ ]
226
(c) Employees [ ]
(d) Competitors [ ]
(e) Insurers [ ]
(f) Government [ ]
(g) NGO/Social activist [ ]
(h) Lenders [ ]
(i) Financial advisors and analyst [ ]
(j) Journalist/or media [ ]
(k) Suppliers [ ]
(l) Customers [ ]
(m) Environmental organizations [ ]
(n) Society at large [ ]
(o) If any other (please specify)
…………………………………………………………
…………………………………………………………
10 (14%) public sector companies are in favour of Management of the
companies as a interested party in environmental accounting and reporting
while 9 (14%) agreed with owners of the companies and none of them argued
for employees, competitors and insurers. 15 (22%) companies found
government as one of the interested party in environmental accounting and
reporting and 16 (23%) regarded NGOs/social activist as the interested
parties in environmental accounting and reporting. No company is in favour
of lenders, journalist/media, suppliers, customers. While 12 (17%) public
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companies found environmental organization more interested in
environmental accounting and reporting and 06 (9%) companies are in favour
of society. Only 1 (1%) company not responded for the interested group of
environmental information related to environmental accounting and
reporting.
Whereas 15 (17%) private sector companies regarded management of the
companies as one of the most important parties interested in environmental
accounting and reporting while 10 (11%) considered owner of the companies
to be more interested in environmental accounting and reporting and none of
them favoured employees, competitors and insurers as a interested group of
environmental information related to environmental accounting and
reporting. In case of government, 15 (17%) found it be most interested in it,
while 20 (23%) companies are in favour of NGOs/social activist. No company
showed any relevance lenders, journalist /media, suppliers, customers with
such information. While 15 (17%) companies related of environmental
organizations with information on environmental accounting and reporting
and 07 (8%) companies found society concerned with such information and 05
(6%) not responded .
It is therefore concluded that a large number of public and private
companies found NGOs/social activist as interested groups of environmental
information related to found environmental accounting and reporting. There
is no significant difference in opinion of public and private sector companies
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about the interested group of environmental information related to
environmental accounting and reporting.
Table 31 depicts the adoption for the norms of ISO 14001 for disclosure of
environmental accounting and reporting in Indian public and private sector
companies.
TABLE -4.31
ADOPTION FOR ISO 14001 FOR DISCLOSURE OF ENVIRONMENTAL
ACCOUNTING AND REPORTING IN INDIAN PUBLIC & PRIVATE
SECTOR COMPANIES
Response category Public Sector companies’ Private Sector companies
No. Percent No. Percent
Y es 0 0 0 0
No 60 87 80 92
Not Response 09 13 07 08
Total 69 100 87 100
Q. 31. Do you adopt norms as for ISO 14001 for disclosure of
environmental accounting and reporting? [ ]
Out of 69 public companies, not even a single company favoured
adoption for the norms of ISO 14001 for disclosure of environmental
accounting and reporting. While 60 (87%) companies disagreed with it and 9
(13%) companies gave no response about the adoption for the norms of ISO
14001 for disclosure of environmental accounting and reporting in public
sector companies.
229
In case of private sector companies, out of 87 no company found a need
for the adoption for the norms of ISO 14001 for disclosure of environmental
accounting and reporting. While 80 (92%) companies disagreed with it and 7
(8%) private companies not responded for the adoption for the norms of ISO
14001 for disclosure of environmental accounting and reporting in the private
sector companies.
It is therefore obvious that a good number of the public and private
sector Indian companies did not favour adoption for the norms of ISO 14001
for disclosure of environmental accounting and reporting in the public sector
companies. There is no significant difference in the opinion of public and
private sector companies about the adoption for the norms of ISO 14001 for
disclosure of environmental accounting and reporting.