COMPARATIVE STUDY OF THE ADEQUACY OF DISCLOSURE IN SUSTAINABILITY REPORTS BETWEEN UNITED STATES COMPANIES AND INDONESIAN COMPANIES IN THE OIL AND GAS INDUSTRY
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Date
2016-07-18
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Abstract
A sustainability report communicates the company’s sustainability in economic, environmental, and social performance. A sustainability report is important for stakeholders because it communicates information concerning the company’s activities and effective performance. However, there are no fully developed standards for this type of report, therefore, there is a lack of consistency in sustainability reports between companies. Currently, companies are using Global Reporting Initiative (GRI) standards, but these standards may be interpreted and explained differently. These differences are caused by the different industries, needs, and expectations of intended user.
This study compares the adequacy of disclosure in sustainability reports in the United States and Indonesia. The comparisons will help companies in both countries to improve the quality of sustainability reports disclosures. Three oil and gas company from each country are analyzed regarding the disclosure of the GRI G3.1 and GRI G4 indicators and the disclosure of important matters based on Schneider (2011) and Sahar Roy and Mitra’s (2015) balance scorecard. The result shows that the United States companies have higher quality of disclosure than the Indonesian companies in this study. This study concludes with recommendations on how to improve sustainability reporting disclosures for the two countries.
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sustainability report, oil and gas, adequacy