This study examines the status of non-disclosure of social and environmental information in a separate section of annual reports by Malaysian listed companies. Findings suggest that many of the companies do not report social and environmental activities in their annual reports although they do engage in such activities. The non-disclosing companies are also selective over social and environmental related activities preferring those with direct effect in improving their financial standings such as employee training programs, energy consumption programs, employee health and safety, product safety and product quality improvements and conservation of energy activities. The non-disclosing companies perceived that there is no significant benefit or penalty arises out of the disclosure decision. They attributed this to lack of demand from (or inactive role of) investors and other stakeholders. As such the decision not to disclose saves companies from the risk of erosion of competitive advantage and related costs in producing the information. There is an urgent need to encourage investors, consumers and other stakeholders to play their roles as natural control mechanisms to ensure companies are more committed towards sustainable development.
|Keywords:||Social and Environmental Information, Costs and Benefits Analysis, Non-disclosure, Sustainable Development|
Lecturer, College of Business, Universiti Utara Malaysia, Jitra, Kedah, Malaysia
Senior Lecturer, Scholl of Management, Universiti Sains Malaysia, Penang, Malaysia
Professor, School of Management, Universiti Sains Malaysia, Penang, Malaysia
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