Edinburgh Research Explorer

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

Research output: Contribution to journalArticle

  • Maizatulakma Abdullah
  • Noradiva Hamzah
  • Mohd Helmi
  • Ming-Lang Tseng
  • Matthew Brander

Related Edinburgh Organisations

Original languageEnglish
JournalJournal of Cleaner Production
Early online date22 Oct 2019
DOIs
Publication statusE-pub ahead of print - 22 Oct 2019

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.

    Research areas

  • environmental disclosure, accountability, Southeast Asia, haze, plantation industry

ID: 116676599