Environmental and social responsibility reporting. Do Macedonian companies disclose those information and how?

Abstract

Incorporating environmental impact into financial reports is becoming standard practice in the 21st Century. Investors are aware of the need for environmentally correct opera­tions since failures in this domain lower the price of shares. However, in terms of regulation, in most of the countries, environmental reporting remains voluntary. Institutions dealing with development and promotion of the modern accounting and financial reporting standards encourage companies to concurrently report for their environmental activities. The only question is how. Accounting may in­clude information on the environmental impact only if it is quantitative and monetary. Since many nuances of the issues remain difficult to quantify, corporations opt to sepa­rately report on their environmental practices. The aim of this paper is to examine the accounting and stock market regulations and the practice of reporting for environmental impact of the operations of the leading Macedonian com­panies. We selected ten companies that make the Mace­donian Stock Exchange Index and additional five compa­nies with significant environmental impact. We reviewed their annual reports and interviewed their financial officers. The results show that the environmental and social respon­sibility reporting is left to the companies and their manage­ment and its perception of the need for keeping posted the major stakeholders and the most appropriate way to do it. The findings of this paper can motivate the regulatory body and the government to require more trans­parency and disclosure of the sustainability information.