Corporate Social and Environmental Reporting on ...

ISSN 1817-5090 The Cost and Management Vol. 35 No. 4 July-August, 2007, pp. 31-49

Corporate Social and Environmental Reporting on Corporate Websites: A Study on Listed Companies of Bangladesh Probal Dutta Sudipta Bose Abstract: This paper investigates the internet corporate social and environmental reporting practices of the listed companies of Bangladesh. A scoring scheme for measuring the extent of corporate social and environmental disclosure on the internet has been used. A total of 104 websites have been assessed and both partial and aggregate scores have been produced. The scores show that the internet reporting of corporate social and environmenta l information by the listed companies in Bangladesh is still in its infancy, which indicates that the listed companies in Bangladesh have a lot of work to do in order to enhance the corporate reporting activities on the internet. An important finding of the study is that local companies lag behind in internet reporting of corporate social and environmental information whereas the majority of corporate social and environmental information are disseminated by multinational companies (MNCs). Keywords: Corporate Social and Environmental Information, Media Richness, Internet, Corporate Website and Paper-based Reporting.

Introduction Corporate social and environmental reporting is a mechanism whereby companies disclose the social and environmental aspects of their corporate activities to their stakeholders. An upward trend in corporate social and environmental reporting practices is being noticed worldwide. Companies in developed countries (e.g., Australia) have been engaged in corporate social and environmental reporting for at least two decades on a voluntary basis (Tilt, 1999). Developing countries (e.g., Malaysia) have also started disclosing corporate social and environmental information voluntarily. There are three easily identifiable media for disclosing corporate social and environmental information: corporate annual reports, CSR reports (CSR report is a general term for the report disclosing social and environmental information. CSR reports are also brought out in other forms such as environmental report, sustainability report, corporate citizenship report etc.) and corporate websites. Companies in both developed and developing countries disclose corporate social and environmental information in their annual reports but publication of a separate CSR report has become a common practice for the companies in the developed countries. Both CSR and corporate annual reports are brought out once in a year and consequently, corporate stakeholders cannot have access to them until the Mr. Probal Dutta is a Lecturer, BRAC Business School, BRAC University, Dhaka and Mr. Sudipta Bose is a Finance Officer, Grameen Phone Limited, Dhaka.

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end of the accounting period of respective companies whereas they have access to corporate websites throughout the year and corporate websites are subject to continuous changes. As a result, corporate websites provide up-to-date corporate social and environmental information. With growing internet facilities and an increasing number of internet users across the globe, corporate websites have the potential of becoming the most popular medium of disclosing corporate social and environmental information. Large, medium and small companies in different parts of the world have websites and they disclose a substantial amount of corporate social and environmental information along with other non-financial and financial information on their websites. Many Bangladeshi listed companies have corporate websites that contain corporate social and environmental information to some extent but to the authors’ best knowledge, no research efforts have been made so far to understand the status of online corporate social and environmental reporting practices in Bangladesh; attempts have been made in the present paper to fill the existing gap of knowledge in this area. Objectives of the Study Following are the objectives of the present study: 1. To draw a plain picture of online corporate social and environmental reporting practices by the listed companies of Bangladesh. 2. To rank companies based on the extent of disclosure of corporate social and environmental information on their websites.

Nature and Scope of the Study The present study is exploratory in nature and encompasses all the companies listed with the Dhaka Stock Exchange and Chittagong Stock Exchange.

Literature Review Media Richness Theory and Advantages of the Internet Reporting over Paper-based Reporting The development of the internet has created a new reporting environment. In reference to financial reporting, several papers have shown the advantages of internet reporting over the paper-based reporting. In this paper, the advantages of corporate social and environmental reporting on the internet will be discussed from the perspective of Media Richness Theory. Daft and Lengel (1984, 1986) introduced the media richness theory. They defined media richness as the ability of media to improve human understanding by reducing uncertainty and equivocality. The theory has two assumptions. The first assumption of this theory is that organizations process information to reduce uncertainty and equivocality. Uncertainty is defined by Galbraith (1977) as “the difference between the amount of information required to perform the task and the amount of information already possessed by the organization.” Equivocality is defined as the ambiguity of the task, caused by conflicting interpretations about a group situation or environment. Therefore, when equivocality is high, an individual does not know what questions to ask and when uncertainty is high the group knows the question but lacks the necessary information. In conclusion, as information increases, uncertainty and equivocality decrease. The second assumption of this theory is commonly used media in organizations 32

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Corporate Social and Environmental Reporting on Corporate Websites: A Study on Listed Companies of Bangladesh

works better for certain tasks than others. Specifically, Daft and Lengel (1984) concluded that written media was preferred for unequivocal messages while face-to-face media was preferred for messages containing equivocality. Using four criteria, Daft and Lengel (1984, 1986) presented a media richness hierarchy, arranged from high to low degrees of richness, to illustrate the capacity of media types to process ambiguous communication in organizations. The criteria are: (i) immediacy or the ability of media to provide timely feedback; (ii) multiple cues or the capacity of the medium to transmit multiple cues such as body language, voice tone, and inflection; (iii) language variety or the use of different words to increase understanding and (iv) personal source that refers to the ability of media to convey feelings and emotions. Face-to-face communication is the richest communication medium in the hierarchy followed by telephone, electronic mail, letter, note, memo, special report, and finally, flier and bulletin (Rice and Shook, 1990). Figure 1 shows the hierarchy of media richness. Figure-1: Hierarchy of Media Richness High Face-to-Face

Telephone Media Richness Written, Addressed Documents (note, memo, letter) Unaddressed Documents (flier, bulletin, standard report) Low Source: Daft, Lengel, and Trevino (1987)

Modern communication technologies such as e-mail were not very popular or developed when the concept of media richness germinated. Therefore, the four criteria for media richness used by Daft and Lengel (1984, 1986) did not take into consideration the potential of modern communication technologies. Other researchers, for example, Sproull (1991), and Valacich, Paranka and Nunamaker (1993) identified four additional criteria for media richness that would take into account the potential of modern communication technologies. These criteria include: (i) multiple addressability or the ability of media to communicate information simultaneously to multiple users; (ii) criterion of externally recordable, which relates to the ability of media to provide a record of the communication (This involves being able to document as well as modify the process of communication.); (iii) computer processable memory that refers to the organization and manageability of communication electronically so that searches can be undertaken on them; and (iv) concurrency, which relates to the concept of multiple addressability but is broader in that it allows interactivity to more than one user at once, rather than just addressing multiple persons simultaneously. These four additional criteria expanded the media richness theory with a view to taking into consideration the changing forms of organizational activities and the use of The Cost and Management, July-August, 2007

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modern information technology, rather than merely restricting them to handling ambiguous tasks. According to the expanded media richness theory, a medium that has the features discussed earlier will be given a higher priority for selection by individuals. In regard to corporate communications, it will be of interest to explore whether the internet is a rich medium for communicating social and environmental information. Such an activity is a highly equivocal task related to the external environment rather than internal organizational processes and preference will be given to a medium that is rich. The present study focuses on the richness of the internet for communication purposes and compares this with conventional print media. The internet has a number of advantages over the traditional paper-based media (corporate annual reports, stand alone CSR reports and stand alone environmental reports) of disseminating corporate information. The internet has mass communication (Lymer, 1997; 1999; Lymer, Debreceny, Gray & Rahman, 1999; Ashbaugh, Johnstone, Warfield, 1999; Ettredge, Richardson & Scholz, 2001) and global reach (Trites, 1998; Lymer, 1999; Lymer et al., 1999; United Nations Environment Programme, 1999) abilities that allows dissemination of corporate information to a wide range of stakeholders, (as cited by Lodhia (2004)). The internet facilitates two-way interaction and feedback through discussion forums, bulletin boards, and e-mail lists (Gowthorpe & Amat, 1999; Jones & Walton, 1999; Lymer et al., 1999; Trites, 1998; United Nations Environment Programme, 1999; Financial Accounting Standards Board, 2000; Williams & Pei, 2000; Association of Chartered Certified Accountants, 2001b; Isenmann & Lenz, 2001; Shepherd et al., 2001; Wheeler & Elkington, 2001). Timely dimension is another advantage offered by the internet (Lymer, 1997; 1999; Ashbaugh et al., 1999; Lymer et al., 1999; Trites, 1998; United Nations Environment Programme, 1999; Financial Accounting Standards Board, 2000; Williams & Pei, 2000; Association of Chartered Certified Accountants, 2001b; Ettredge et al., 2001; Isenmann & Lenz, 2001; Shepherd et al., 2001; Wheeler & Elkington, 2001). Webcasting is a possible tool that could be utilized to disseminate corporate information conveniently and on a timely basis to multiple stakeholders (Parker & Adler, 2001). This involves a live broadcast of an event through the WWW. A common example is a webcast of an annual general meeting, (as cited by Lodhia (2004)). Improved presentation and navigation through graphics, hyperlinks, and search facilities is possible through the internet (Ashbaugh et al., 1999; Lymer et al., 1999; United Nations Environment Programme, 1999; Jones & Walton, 1999; Financial Accounting Standards Board, 2000; Association of Chartered Certified Accountants, 2001b). The internet also allows an increased information flow (Lymer, 1997, 1999; Ashbaugh et al., 1999; Financial Accounting Standards Board, 2000; Association of Chartered Certified Accountants, 2001b; Williams & Pei, 2000; Ettredge et al., 2001) and has a low cost of information dissemination (Lymer, 1997, 1999; Ashbaugh et al., 1999; Lymer et al., 1999; Trites, 1998; Williams & Pei, 2000; Financial Accounting Standards Board, 2000; Ettredge et al., 2001) (as cited by Lodhia (2004)). The internet could allow a company to integrate all aspects of corporate communication (United Nations Environment Programme, 2001). For instance, triple bottom line (financial, social, and environmental) information could be provided on a website and linked together by utilization of hyperlinks. On the other hand, Isenmann and Lenz (2001) indicated that even though the internet allows users to pull information (pull-based technology), push-based 34



technology could also be used to disseminate information. This could be feasible through utilization of e-mail lists and alerts (Financial Accounting Standards Board, 2000), which would provide timely information to stakeholders,(as cited by Lodhia (2004)). The benefits of environmental reporting on the internet could be conceptualized through media richness theory. This provides support to the notion of the internet as a rich medium for disclosing social and environmental information. The internet has an edge over conventional print media in all aspects of the media richness theory. In addition, it has the advantage of being a cost beneficial medium for disseminating information-one that could also reduce the consumption of paper. The internet allows companies to disclose social and environmental information instantly (immediacy) to numerous stakeholders (multiple addressability) and possibly engage and seek the views of their stakeholders (concurrency). Various approaches to presenting the information (multiple cues) based on different formats (language variety) and needs (personal source) can be used. Information can be well organized through hyperlinks and search tools in order to allow ease of navigation for stakeholders (computer processable memory). The extent to which various stakeholders have used such information can also be accessed by internet technology while archived information can also be disclosed (externally recordable). Table 1 recapitulates the advantages (in the light of media richness theory) of social and environmental reporting on the internet over those of the traditional paper-based reporting. Table-1: The Richness of Internet as a Medium for Corporate Social and Environmental Reporting Criteria

Paper-based Reporting

Internet Reporting

Immediacy

Only historical information is supplied.

Information can be supplied on a timely basis and updated regularly.

Multiple Cues

Limited ways of presenting information in hardcopy form.

Presentation flexibility and visibility can provide multiple cues for disseminating information.

Language Variety

Restricted to a general report.

Information can be organized through hyperlinks, increased information can be provided, and different file formats can be used for downloadable information.

Personal Source

Information is for a general audience.

Hyperlinks can provide information for different stakeholders, information can be pushed to stakeholders through e-mail lists, and automatic feedback forms can also be utilized.

Multiple addressability

Accessibility is often limited due to geographic barriers; the addressability of information is often to the more “powerful” stakeholders.

Anyone who has access to the internet can receive information due to the global reach and mass communication potential of the internet.

Criterion of Externally recordable

Manual ways of tracing the users of the disclosed information.

The hit counter facility can be utilized to keep a record of users of the website. Reports for multiple years can be archived on a website.

Computer processable memory

Manual searching.

Navigation and management of information on website is possible through hyperlinks, menus and search engines. Integration of information is also possible through hyperlinks to another section, page, or website.

Concurrency

Simultaneous interaction is not possible.

Allows two-way interactions through discussion forums, e-mails and bulletin boards.

Source : Lodhia (2004)

The internet not only offers numerous benefits but also suffers from a number of limitations. Reporting on the internet may lead to disparities between large and small size companies or developed and developing countries (United Nations Environment Programme, 1999). It can result in increased costs for website expertise and maintenance (Jones & Walton, 1999; United Nations Environment Programme, 2001). Internet reporting may also cause information overload (Lymer et al., 1999; Trites, 1998) and lead to security risks (Ashbaugh et al., 1999; Trites, 1998; United Nations Environment Programme, 1999). Finally, it may give rise to authentication problems (Ashbaugh et al., 1999; Gowthrope & Amat, 1999; Trites, 1998; Financial Accounting The Cost and Management, July-August, 2007

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Standards Board, 2000; Ettredge et al., 2001). Despite the limitations of internet, it is accepted that its potential for disseminating social and environmental information should not restrict the use of this phenomenal technology. It is hoped that should social and environmental reporting on the internet become functional, such limitations would be alleviated through improvements in technology (and the associated cost reduction) and improved communication dimensions (concentrating on relevant and reliable information). Furthermore, companies will need to have a responsibility to provide information to external stakeholders on the website through extensive site promotion and also train users in the use of the internet technology (Association of Chartered Certified Accountants, 2001b). Prior Research on Corporate Social and Environmental Reporting Myriads of studies have been undertaken on the corporate reporting on the internet. But financial reporting on the internet has remained the center of attention in most of these studies. Very few studies have focused on the corporate social and environmental reporting on the internet. Previous research emphasized on the corporate social and environmental reporting (especially, corporate environmental reporting) using the paper-based media. Eskew and Jensen (1996) noted that the demand for information in corporate reporting comes from both outside and inside the business enterprises. The paper also illustrates that the users of financial reporting outside the business usually wants summarized information in standardized forms and reported at certain intervals. On the contrary, the inside users look for customized information to help them taking specific decisions and reported at frequent intervals and sometimes produced on the basis of request. A number of post-1990 studies have focused on the relationship between corporate social reporting and the possible motivation underlying decisions to disclose this type of information (Deegan, 2002). Guthrie and Parker (1990) and Patten and Trompeter (2003) assure that firms disclose social and environmental information as a mechanism used to be protected and to avoid the attention of regulatory bodies, particularly when sanctions for non-compliance are invoked (King and Lenox, 2000). Moreover, corporate environmental initiatives may be used to shape government regulations attempting to pre-empt future legislation altogether or failing this, to soften the impact of the new laws by inducing regulators to set relatively weak standards (Lyon and Maxwell, 1999). Other incentives include the compliance with industrial codes (Howard, Nash, and Ehrenfeld, 1999), the decrease of operating costs (Esty and Porter, 1998; Reinhardt, 1999), the creation of shareholder value (Cerin, 2002; Schaltegger and Figge, 2000), and the improvement of the image of the firm and the need to promote the relationship with customers and society (Baumast, 2001; Solomon and Lewis, 2002; Gray and Roberts, 1989; Zeghal and Ahmed, 1990). Corporate social disclosure in paper-based reporting has been analyzed in many research papers that have contributed from different perspectives to its interpretation (Gray, Kouhy, and Lavers, 1995). Some of them have been focused in the analysis of environmental management strategies. The European Business Environmental Barometer Reports (EBEB) are among the most important surveys in European countries to analyze the state of the art in environmental management strategies. 36



Other research papers have approached the topic of environmental disclosures by companies. The majority of these studies appear to be from North America, Australia, the UK, Canada and, finally, Nordic countries. Some studies considered the effects of environmental disasters by companies (Patten, 1992; Blacconiere and Patten, 1994; Hooghiemstra, 2000). Another topic on environmental reporting has been focused in comparisons across industries of environmental reporting and disclosure provided by firms (Stray and Ballantine, 2000). In fact, these studies have driven to the most environmentally sensitive sectors of the economy such as electric utility industry (Dixon and Whittaker, 1999; Repetto and Henderson, 2002), chemical industry (Stanwick and Stanwick, 1998), socially responsible investment sector, mining and mineral industries or water industry. Other studies examined the general quality of environmental disclosures in 10k and annual reports, finding that many firms did not provide any discussion of corporate environmental philosophy or environmental disclosures (Wiseman, 1982; Gamble, Hsu, Kite and Radtke, 1995). The relationship with financial performance and market reaction has been another main feature in corporate environmental performance (Spicer, 1978; Shane and Spicer, 1983) Finally, several research papers have been conducted to know the state of the art of corporate environmental disclosures in paper-based reporting in some countries as well as to emphasize differences on environmental disclosures between firms in an international context. In the context of Bangladesh, some studies have been carried out in the areas of Financial Reporting on Internet (FRI) but to the authors’ best knowledge, no study on corporate social and environmental reporting has been undertaken so far. Hossain (2004) identifies a correlation between a lack of well-developed securities market and poor or absence of corporate reporting on internet by the Bangladeshi companies. Saifuddin and Khan (2005) report from a stakeholders interview that variations observed in web based financial reporting pose doubts on investors’ minds that some companies are violating existing financial reporting regulations. The paper however, suggests that this should not discourage companies from web based reporting, rather take measures in order to make web based financial reporting more effective than paper based.

Methodology Sample Presently there are 220 listed companies in the Chittagong Stock Exchange (CSE) and 331 listed companies in the Dhaka Stock Exchange (DSE). All these companies have been grouped into 18 sectors. All companies (except 5 companies) listed with the CSE are also listed with the DSE. 15 mutual funds, 8 debentures and 49 treasury bonds are also part of these listed companies. Consequently, mutual funds, debentures and treasury bonds have been excluded from the sample. As a result the adjusted number of listed firms of Bangladesh becomes 264 of which 160 firms do not have corporate websites of their own. Therefore, the sample size of the present study is reduced to 104. Table 2 shows the calculation of the sample size. The Cost and Management, July-August, 2007

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Table-2: Computation of the Sample Size Number of firms listed with the DSE Less: Mutual funds Treasury bonds Debenture Adjusted number of firms listed with the DSE Add: Number of firms listed with the CSE but not with the DSE Adjusted number of listed firms Less: Firms without corporate websites Sample size

331 (15) (49) (8) 259 5 264 (160) 104

Table 3 provides the number of listed companies (sector-wise) having corporate websites. Only 104 out of 264 listed companies have corporate websites. The Banks sector has the highest number of firms (36 out of 41) having corporate websites. The Pharmaceuticals & Chemicals, Engineering and Textile sectors respectively have 14, 11 and 9 firms having corporate websites. The number of firms having corporate websites in other sectors is insignificant. Table-3: Number of Listed Firms (Sector-wise) having Corporate Websites Serial Sector 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Numberof Firms

Number of Firms With Corporate Websites

Number of Firms Without Corporate Websites

Banks Cement Ceramics Engineering Pharmaceuticals & Chemicals Food & Allied Fuel & Power Insurance Tannery Textile Paper & Printing IT Jute Service & Real Estates Miscellaneous

41 8 4 23 25 35 7 32 8 39 8 7 4 5 18

36 2 2 11 14 5 4 7 1 9 1 2 0 3 7

5 6 2 12 11 30 3 25 7 30 7 5 4 2 11

Total

264

104

160

Source: www.dsebd.org, www.csebd.com and www.bdstock.com

Collection and Analysis of Data Data relating to corporate social and environmental disclosures were collected by browsing the websites of 104 firms between May 2007 and August 2007. The technique of content analysis has been employed to collect and analyze data. Hossain, Islam and Andrew (2006) have developed a list of social and environmental disclosure information (Appendix-II) based on the following criteria: 38



1. Items of social and environmental information commonly required by the statutes in Bangladesh. 2. Disclosure items identified in other studies examining disclosure in Bangladesh (if any). 3. Disclosure indices generally used in developing countries other than Bangladesh (e.g., Porwal & Sharma (1991) and Singh, & Ahuja (1983). 4. Disclosure indices generally used in developed countries (e.g., Wiseman, 1992). The list contains 60 items of social and environmental information. Hossain, Islam and Andrew (2006) have developed a scoring scheme to measure the extent of disclosure of social and environmental information by different companies in their annual reports. Here, the only consideration is whether or not a company discloses an item of social and environmental information in its annual report. If a company discloses an item of social and environmental information (e.g., Air emission information) in its annual report it will be awarded ‘1’ and if not it will be awarded ‘0’. The disclosure model for the social and environmental disclosure thus measures the total disclosure (TD) score for a company as additive as follows: 60 TD = di i=1 Where, d i = 1, if the item di is disclosed and 0 if the item d i is not disclosed i = 1, 2, 3… 60 In the current study, the same list of social and environmental information items and the same scoring scheme have been employed to measure the extent of disclosure of social and environmental information on the corporate websites of the listed companies in Bangladesh. A listed company disclosing social and environmental information on its website can get a minimum of 0 and a maximum of 60 points.

Findings Table 4 provides descriptive statistics for the 104 firms that have corporate websites. The mean of corporate social and environmental disclosure score across the 104 listed firms for all the 60 items was 3.22 points, while the standard deviation was 7.24. The scores were ranged from 41 points (highest score for individual firms) to 0 point (lowest score for individual firms) and 134 points (sector-wise highest score) to 0 point (sector-wise lowest score), indicating a wide variation in the disclosure level of corporate social and environmental information on corporate websites. At the individual firm level, Glaxo SmithKline & Reckitt Benckise Ltd. achieved the highest score (41 points) and 63 firms obtained the lowest score (0 point). The sector-wise highest score (134 points) was obtained by the Pharmaceuticals & Chemicals sector, while the Paper & Printing sector obtained the lowest score (0 point). The Cost and Management, July-August, 2007

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Table-4: Descriptive Statistics Number of Firms Mean score Median score Standard deviation Maximum score (Individual Firm) Minimum score (Individual Firm) Range of scores (Individual Firm) Maximum score (Sector Wise) Minimum score (Sector Wise) Range of scores (Sector Wise)

104 3.22 0 7.24 41 0 41 134 0 134

Table 5 reports the scores received by each category of information across the 104 listed firms. Table 5 shows that employees information category received the highest score (95 points), followed by information relating to community (86 points), environmental information (83 points) and information relating to products (55 points). Information relating to energy did not appear to be a priority, as the score achieved was very low (16 points). Table-5: Score Received by Each Information Category across 104 Firms Number of Firms Category of Information

104 (1) Total Score for Each Category of Information

(2) Score Received by Each Category of Information

(3) Percentage of Score Received by Each Category of Information = {(2)÷ 6240} × 100

Category A: Information relating to Environment (18 points)

18×104=1872

83

1.33%

Category B: Information relating to Employees (21points)

21×104=2184

95

1.52%

Category C: Information relating to Community and Others (10 points)

10×104=1040

86

1.38%

Category D: Information relating to Energy (3 points)

3×104=312

16

0.26%

Category E: Information relating to Products (8 points)

8×104=832

55

0.88%

6240

335

5.37%

Grand Total

Table 6 through 10 presents scores received by 60 social and environmental information items grouped into five broad categories (Table 5). The most common environmental information item was environmental policies or company concern for the environment (Table 6:A9:20 points), followed by conservation of natural resources (A10:7 points), pollution control of industrial process (A15: 7 points), water discharge information, recycling plant of waste products, installation of effluent treatment plant, and support for public or private action designed to protect the environment (A7, A11, A12 and A18 respectively: 6 points). Not a single company disclosed information relating to first three items (A1, A2 and A3-Appendix-II). Companies in the Pharmaceuticals & Chemicals sector (33 points), followed by the companies in the Fuel & Power sector (10 points) have disclosed most of the environmental information. These results indicate that company concern for the environment is growing at a snail’s pace. 40



Table-6: Score Received by Environmental Information Items A. Environmental Information

Total Score

Highest Score (Sector-wise)

Lowest Score (Sector-wise)

Range

A1 A2 A3 A4 A5 A6 A7 A8 A9 A10 A11 A12 A13 A14 A15 A16 A17

0 0 0 2 3 4 6 3 20 7 6 6 3 3 7 3 4

0 0 0 1 2 2 2 2 6 3 2 2 2 2 3 2 2

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 1 2 2 2 2 6 3 2 2 2 2 3 2 2

A18

6

2

0

2

Table 7 reports the scores received by employee information items. Training of the employees through in-house programmes item received the highest score (B28: 18 points), followed by human resource development (B19:16 points) and health and safety arrangements (B21:11 points). Items B22, B24 and B39 (Appendix-II) did not receive any point. Firms in the Pharmaceuticals & Chemicals sector (39 points), followed by the firms in the Banks sector (12 points) and Fuel & Power sector (10 points) have disclosed most of the information relating to employees. These results indicate that listed companies in Bangladesh are sensitive in providing employee-related information. Table-7: Score Received by Employee Information Items B. Employee Information

Total Score



Range

B19 B20 B21 B22 B23 B24 B25 B26 B27 B28 B29 B30 B31 B32 B33 B34 B35 B36 B37 B38

16 3 11 0 1 0 1 4 1 18 4 1 2 6 7 3 5 6 3 3

6 2 3 0 1 0 1 2 1 6 4 1 2 3 3 1 3 4 2 2

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

6 2 3 0 1 0 1 2 1 6 4 1 2 3 3 1 3 4 2 2

B39

0

0

0

0


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Regarding the reporting of community and other items (Table 8), social welfare, donations to the charity, arts, sports and relations with local population received 23, 21 and 17 points respectively. Firms in the Pharmaceuticals & Chemicals sector are again at the top of the list in terms of reporting information relating to community (31 points), followed by the firms in the Banks sector (9 points). Table-8: Score Received by Community Information Items C. Community Information

Total Score



Range

C40 C41 C42 C43 C44 C45 C46 C47 C48 C49

21 17 23 6 1 4 6 6 1 1

7 7 7 3 1 2 3 3 1 1

0 0 0 0 0 0 0 0 0 0

7 7 7 3 1 2 3 3 1 1

Category D is the worst performing category in terms of score received (Table 5). Table 9 shows the score received by the energy-related information items. Item D50 (Appendix-II) received the highest score of 6 points. Majority of the companies do not disclose any information relating to energy consumption on their websites. The Pharmaceuticals & Chemicals industry again secures the highest score for disclosing information relating to energy consumption. Table-9: Score Received by Energy Information Items C. Energy Information

Total Score



Range

D50 D51 D52

6 5 5

3 3 3

0 0 0

3 3 3

Finally, Table 10 presents the score of reporting information on products. Most of the companies have disclosed information on research projects set up by the company to improve its product (E55:12 points). The second mostly disclosed information is the amount or percentage figures of research and development expenditures and benefits (E54:11 points). Surprisingly, very few firms have disclosed information on the increase in quality of their products (E60:6 points). Table-10: Score Received by Product Information Items B. Employee Information

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Total Score



Range

E53

6

2

0

2

E54 E55 E56 E57 E58 E59

11 12 3 4 5 8

4 4 2 2 3 3

0 0 0 0 0 0

4 4 2 2 3 3

E60

6

3

0

3



The sample companies were ranked on the basis of the total disclosure score they received. Appendix-I shows the ranks of the companies under study. The table also provides the disclosure scores received by these companies. Further, these ranks provide insights about which industries are disclosing more social and environmental information on the corporate websites.

Conclusions This study was based on 264 companies listed on the stock exchanges of Bangladesh of which 104 companies had corporate websites. The websites of 104 companies were assessed. The mean score for 60 social and environmental information items was 3.22 points, while the standard deviation was 7.24. These results indicate that corporate social and environmental reporting is still in its infancy in Bangladesh. The present study reveals that the companies in the Pharmaceuticals & Chemicals sector secured the highest score (134 points) for social and environmental reporting on their websites but it is worth noting that this sector has 2 (two) multinational companies (MNCs) such as Glaxo Smith Kline (rank 1), Reckitt Benckiser (Bd.) Ltd. (rank 1 that secured top scores for corporate social and environmental reporting on their corporate websites. Other two top scorers are BOC (rank 3) and BATBC (rank 4) and both of them are MNCs as well. On the other hand, local companies could not perform that well compared to their MNC counterparts. The highest score secured by any local company is 15 points (SQUARE Pharmaceuticals Ltd.). About 61 percent (63 companies) of the companies with websites scored 0 point as they did not disseminate any social and environmental information on their websites. The range of scores (134 points) indicates a wide variation in the disclosure level of corporate social and environmental information. Though the performance of the listed companies of Bangladesh in terms of internet reporting of corporate social and environmental information is not yet satisfactory, it is hoped that they will be efficiently using the internet technology for corporate reporting in near future.



The present study did not address a number of issues. First, the present study did not investigate into the determinants of online reporting of corporate social and environmental information and secondly, it did not address the issue of balancing demand for more information and the problem of information overload. Therefore, these issues should receive future research attention. References Ahmed, P. K. and G. Hardaker (1999), “The role of online communities on the internet for sustainable development,” Business Strategy and the Environment, 8(1): 75–81. Ashbaugh, H., K. M. Johnstone and T. D. Warfield (1999), “Corporate reporting on the internet,” Accounting Horizons, 13(3):241– 257. Association of Chartered Certified Accountants (2001a), An introduction to environmental reporting, London: The Certified Accountants Educational Trust. Association of Chartered Certified Accountants (2001b), Environmental, social and sustainability reporting on the World Wide Web: A guide to best practice, London: The Certified Accountants Educational Trust. Bala, S. K. and M. A. Yusuf (2003), “Corporate Environmental Reporting in Bangladesh: A Study of Listed Public Limited Companies,” Dhaka University Journal of Business Studies, 24(1): 31-45. Baumast, A. (2001), “Environmental management-the European way,” Corporate Environmental Strategy, 8(2):148–156.


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Appendix-I Ranking of the Companies Based on the Disclosure of Social and Environmental Information Serial

Name of the Company

Score

Rank

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42

Reckitt Benckiser (Bd.) Ltd. Glaxo SmithKline BOC Bangladesh BATBC Square Pharmaceuticals Ltd. Shinepukur Holdings Ltd. BEXTEX Ltd. Beximco Synthetics Beximco Pharma Beximco Fisheries BEXIMCO Bangladesh Online ACI Limited Apex Weaving Apex Spinning Summit Power Limited Heidelberg Cement Bd. Monno Ceramic Dutch-Bangla Bank The Ibn Sina S. Alam Cold Rolled Steels Ltd. Lafarge Surma Cement Ltd. Bata Shoe Singer Bangladesh Islami Bank Standard Bank Limited One Bank Limited IFIC Bank Berger Paints Bangladesh Ltd. Social Investment Bank Phoenix Insurance Kohinoor Chemicals Bangladesh Shipping Corporation (BSC) Olympic Industries Miracle Ind. Eastern Cables Dulamia Cotton Bengal Fine Ceramic Apex Foods AMCL (Pran) Al-Arafah Islami Bank Wonderland Toys

41 41 30 25 15 10 10 10 10 10 10 10 10 9 9 8 8 7 6 5 5 5 5 4 4 3 3 3 3 2 2 2 2 1 1 1 1 1 1 1 1 0

1 1 3 4 5 6 6 6 6 6 6 6 6 14 14 16 16 18 19 20 20 20 20 24 24 26 26 26 26 30 30 30 30 34 34 34 34 34 34 34 34 42


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Dutta & Bose

Serial

Name of the Company

Score

Rank

43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104

Uttara Bank Union Capital Ltd. UCBL The Premier Bank Ltd. Southeast Bank Sinobangla Industries Shahjalal Islami Bank Ltd. Samorita Hospital Rupali Insurance Rupali Bank Renata Ltd. Pubali Bank Prime Textile Prime Islami Life Insurance Ltd. Prime Insurance Prime Finance & Investment Ltd. Prime Bank Pharmaco International Peoples Leasing and Fin. Services Ltd. Orion Infusion Oriental Bank Ltd. NCCBL NBL Mutual Trust Bank Ltd MIDAS Financing Ltd. Metro Spinning Mercantile Bank Ltd. Keya Detergent Keya Cosmetics Jamuna Bank Ltd. Industrial Prom. & Dev. Co. of BD Ltd. IDLC Himadri H.R.Textile Green Delta Insurance GQ Ball Pen Golden Son Ltd. Fareast Islami Life Insurance Co. Ltd. Export Import (EXIM) Bank of Bangladesh Eastern Housing Eastern Bank Dhaka Electric Supply Company Ltd Dhaka Bank Delta Life Insurance Daffodil Computers Ltd. City Bank BRAC Bank Ltd Bangladesh Thai Aluminium Bank Asia Ltd. Bangladesh Lamps Bangladesh Industrial Fin. Co. Ltd. Bangas B.Monospool Paper Anlima Yarn Ambee Pharma Alltex Ind. Ltd. Aftab Automobiles AB Bank First Lease International Rangpur Foundry Power Grid Company of Bangladesh Ltd. Aziz Pipes

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42

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Appendix-II List of Social and Environmental Information to be Disclosed A.

B.

Environmental Information A1. Past and current expenditure for pollution control equipment and facilities. A2. Past and current operating costs of pollution control equipment and facilities. A3. Future estimates of expenditures for pollution control equipment and facilities. A4. Future estimates of operating costs for pollution control equipment and facilities. A5. Financing for pollution control equipment or facilities. A6. Air emission information. A7. Water discharge information. A8. Solid waste disposal information. A9. Environmental policies or company concern for the environment. A10. Conservation of natural resources. A11. Recycling plant of waste products. A12. Installation of effluent treatment plant. A13. Anti-litter and conservation campaign. A14. Land reclamation and forestation programmes. A15. Pollution control of industrial process. A16. Research on new methods of production to reduce environmental pollution. A17. Raw materials conservation. A18. Support for public or private action designed to protect the environment. Employees Information

C.

B19. Human Resource Development (e.g. Training Programme/Scheme). B20. Educational Facilities. B21. Health and Safety Arrangements (i.e. safety of the employees). B22. Pensions. B23. Holidays and Vacations. B24. Information about support for day-care, maternity and paternity leave. B25. Recreation Clubs and public libraries. B26. Reduction or elimination of pollutants, irritants, or hazards in the work environment. B27. Discussion of accidental statistics. B28. Training of the employees through in-house programmes. B29. Establishment of training centres. B30. Discussion on staff accommodation/staff home ownership schemes B31. Policies for the company’s remuneration package/scheme B32. Number of employees in the company B33. Providing per employee statistics (e.g. assets per employee, statistics on employee turnover and sales per employee) B34. Providing information on the qualification of employees recruited B35. Providing information on the company/management relationships with the employees in an effort to improve job satisfaction and employee motivation B36. Sponsoring educational conferences, seminars or art exhibitions B37. Providing information on the stability of the workers’ job and company’s future B38. Discussion on the company’s relationship with trade unions and/or works B39. Discussion on any strikes, industrial actions/activities and the resultant losses in terms of time and productivity Community and Others

D.

C40. C41. C42. C43. C44. C45. C46. C47. C48. C49. Energy

E.

D50. Conservation of energy in the conduct of business operations. D51. Utilization of waste materials for energy conservation. D52. Discussion of the company’s efforts to reduce energy consumption. Products E53. E54. E55. E56. E57. E58. E59. E60.

Donations to the charity, arts, sports, etc. Relations with local population. Social welfare. Seminars and conferences. Canteen, Transportation, and crèches for the employees’ children. Rehabilitation Programmes. Establishment of Educational Institution (s). Medical Establishments. Parks and Gardens. Public Hall and/or Auditorium.

Information on developments related to the company’s products including its packaging (e.g. making containers re-usable). The amount/percentage figures of research and development expenditures and/or its benefits. Information on research projects set up by the company to improve its product in any way. Information whether the product(s) need(s) applicable safety standards. Providing information for conducting safety research on the company’s products. Providing information on the safety of the company’s product. Information on the quality of the company’s product as reflected in prizes/awards received. Verifiable information that the quality of the firms’ product has increased (e.g. ISO 9,000).

Source: Hossain, Islam and Andrew (2006)


49