Corporate Environmental Disclosure Practices in Kenya

International Journal of Research and Scientific Innovation (IJRSI) | Volume VI, Issue IV, April 2019 | ISSN 2321–2705

Corporate Environmental Disclosure Practices in Kenya

Dr. Muganda Munir Manini¹, Dr. Umulkher Ali Abdillahi²

¹ Department of Business Administration and Management, Kibabii University, P.O Box 1699-50200 Bungoma, Kenya
²Department of Economics, Masinde Muliro University of Science and Technology, P.O Box 190-50100 Kakamega, Kenya

Abstract: – Environmental issues have been on the corporate radar screen for years. However, previous empirical evidence provided mixed results on the extent of environment disclosure and relationship between corporate environmental performance and environmental disclosures. The purpose of this study was to examine the existing status of environmental disclosure practices in selected listed companies in Kenya. A qualitative content analysis of the annual reports of selected core sector companies across three industries, viz. energy and petroleum, manufacturing and allied and construction and allied was undertaken to study the extent and nature of their environmental disclosures in their annual reports for 2016/2017 financial year. Based on the Legitimacy Theory, the study revealed that the level of disclosure of environmental information varies acrosssectors as well as companies and the information disclosed in the annual reports was more qualitative than quantitative. Further, the disclosure made by companies does not adequately cover the informational needs of stakeholders. The study hence supports the need for a suitable framework for environmental disclosure, useful to all the stakeholders. This study contributes to the literature by evaluating voluntary environmental disclosures made by Indian core sector companies in their annual report. Further research may conducted to assess the status of environmental disclosure for a larger sample of Kenya companies.The results of the study have significant managerial and theoretical implications.

Key words: Environmental Disclosure, Greenwashing, Annual reports, Qualitative Content analysis, Listed companies, Nairobi Securities Exchange and Kenya

I. INTRODUCTION

The nexus between corporations, society, stakeholders and the environment has become one of the most contemporary issues in recent times. The impact of corporations activities on the environmental and social problems has been brought under scrutiny (Aras & Crowther, 2009; Bebbington & Gray, 2001; Drucker, 1984). Hence, the need for firms to provide environmental, social and governance disclosures within annual reports has become imperative. Organisations are required, in public interest, to report on what they are doing to protect and grow the environment. This forms the genesis of environmental reporting and disclosure, which entails the production and dissemination of a report that provides a status on various environmental issues and activities in a given period.

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