The Southeast Asian haze: The quality of environmental disclosures and firm performance

Maizatulakma Abdullah, Noradiva Hamzah, Mohd Helmi Ali, Ming Lang Tseng, Matthew Brander

Research output: Contribution to journalArticle

Abstract

Haze continues to affect the Southeast Asian region and causes a significant deterioration in air quality. The palm oil industry is blamed for causing the haze and is urged by stakeholders to improve its accountability and transparency. Despite the growing research in environmental accountability and transparency, to the best of our knowledge, none has scrutinised stakeholders’ perspectives in relation to environmental disclosure by this controversial industry. This study aims to investigate stakeholders’ needs and expectations regarding environmental disclosure by palm oil companies, and to examine the quality of disclosure and its impact on firm performance. This study conducted semi-structured interviews to ascertain stakeholders’ needs and expectations regarding palm oil companies’ environmental disclosure. Then, content analysis of 2013–2017 annual reports of publicly listed palm oil companies was undertaken to examine the quality of disclosures. Finally, the impact of environmental disclosure on firm performance was tested using a panel data approach. One of the novel contributions from this study is the identification of an additional environmental indicator requested by stakeholders, namely information on location of logging and forest clearance, which has not been previously identified in the literature or by the Global Reporting Initiative. The study also finds that Indonesian plantation companies showed a lack of accountability and transparency in relation to the haze and other environmental issues. Malaysian companies provided slightly better disclosures year by year, indicating improved accountability and transparency. The findings also show that environmental disclosure was associated with better firm performance, but only for Malaysian companies. The Malaysian government should give serious consideration to making environmental disclosure mandatory, not only for the sake of the environment but also for the economic sustainability of the palm oil industry. Disclosure has no association with the performance of Indonesian companies, and further research should seek to identify alternative actions to improve stakeholder confidence in the Indonesian palm oil industry.

Original languageEnglish
Article number118958
JournalJournal of Cleaner Production
DOIs
Publication statusAccepted/In press - 1 Jan 2019

Fingerprint

haze
stakeholder
accountability
Palm oil
transparency
oil industry
Industry
Transparency
oil
forest clearance
environmental indicator
panel data
environmental issue
firm
Environmental disclosure
Firm performance
Stakeholders
Asia
air quality
plantation

Keywords

  • Accountability
  • Environmental disclosure
  • Haze
  • Plantation industry
  • Southeast asia

ASJC Scopus subject areas

  • Renewable Energy, Sustainability and the Environment
  • Environmental Science(all)
  • Strategy and Management
  • Industrial and Manufacturing Engineering

Cite this

The Southeast Asian haze : The quality of environmental disclosures and firm performance. / Abdullah, Maizatulakma; Hamzah, Noradiva; Ali, Mohd Helmi; Tseng, Ming Lang; Brander, Matthew.

In: Journal of Cleaner Production, 01.01.2019.

Research output: Contribution to journalArticle

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