CHAPTER
ONE
1.0
INTRODUCTION
1.01
GENERAL
DESCRIPTION
The
issue of sustainability reporting has been one of the most significant
development in the investment community in recent years and corporate
information on environmental, social and government. Issues has become an
increasing essential information source for investment decision of capital
market participate by the end of 2011, 30 trillion in assets under management
by over 900 assests management firms and institutional investor backed the
principles for responsible investment united nations. For a number of years,
the investment community has had extensive discussions of quality of sustainability
reporting which constitute a primary reasons for the community’s skeptism
towards integrating into investment decision-making process.
This
change in the result of greater awareness of corporate governance issue, which
in turn leads to greater transparency. According to Kolk, (2008), a growing
number of mandatory sustainability framework around the world moreover a number
of sustainability initiative have found wide-spread adoption on a global scale.
Neverless, the question of the reporting format for sustainability reporting
has increasing arisen in research and practice.
According
to Krzus, (2010) currently most companies issues standalone sustainability
report, separate from and typically published later in the year than financial
reports which fall under regularly and legislative directive. Thus, a spatial
and temporal disconnection often occur between the availability of information
on the one hand and that of financial information on the other hand, with the
result that financial statement users are likely to assess the two kinds of
information separately. An alternative to issuing standalone sustainability
repotting is to bring together financial and information into an integrated
report. Recently the rising discussion about integrated reporting has shifted
the focus of reporting to a more holistic representation of the companies
performance from an information economics perspective the question of whether
the financial and sustainability reporting data are published in standalone
reports or in an integrated report is irrelevant as long as the information
content is identical.
However,
experimental studies regularly provide evidence that, owing to limited
capabilities of information acquisition and processing, difference 1disclosure
formats decision of financial statement uses. Prior research has shown that
analyst anchor on their prior judgments when making new forecasts and therefore
undertake to new information (Amir, Ganzach (2009). A particular concern about sustainability
reports in those financial statement users may be biased in their assessment of
information when they have already formed a judgment based on financial
statement users to anchor on their financial value judgment, and therefore
under react to information. In contract, an integrated report may serve as a
debasing instrument with regard to their anchoring effects since an interpreted
report lead to simultaneous assessment of both types of information.
An
experiment with 65 investment professionals, none whom had a specialization or
functional focus on sustainability, subjected assessed either a case with good
financial and bad performance or a case with bad financial and good
performance. Participants either received information simultaneously in an
integrated report or received information in a sustainability report only after
receiving the financial information.
These
paper maker three primary contributions to the literature first: It expands the
literature on sustainability reports. While previous investigation have shown
that sustainability reports can help investors to infer information useful for living
firms Dhaliwal et al (2011).
Second
it contributes to the literature on stock market reactions information. Prior studies
show that announcement effects of information are asymmetric in that capital
market reactions to positive news are similar than reactions to good news
finally: It contributes is to our best knowledge the first paper to provide
controlled empirical evidence that mainstream investment professional who are
not specials in sustainability take data into account when valuing companies in
different way and depending on the nature of the information provision.
1.02
THE
HISTORY OF THE CASE STUDY
The
story of mobile oil Nigeria PLC port-Harcourt date back to 1907 when Socony
Vaccum Oil company began marketing operations in Nigeria, through the sale of
sunflower kerosene. In 1978, the company become of publicly quoted company and
assumed its current mane and status. Mobile oil Nigeria posts superiors return
to its shareholders and continue to lead the oil industry in efficiency and
brand image.
Mobil
oil Nigeria in one of the Six major petroleum product marketers in the country.
It currently has over 200 retail outlets located in all 36 states of Nigeria.
These include much state of the art outlet mobile oil Nigeria plc port-Harcourt
in respected in the industry for its ethics and adherence to safety health and
environment standards. It is also plays a leading roles in the promotion and
sharing of best practices in the downstream sector of Nigeria oil and gas
industry. Mobil oil Nigeria plc owns three plants located in Apapa, lagos
state, that manufacture tubes, petroleum jelly, with a capacity of 450,00
barrels per annum is regarded as one of the most sophisticated in Africa.
1.03 STATEMENT OF THE PROBLEM
The
link between sustainability reporting and financial performance has been studied
on many occasions with varying result, where none of the studies show a
significantly positive or negative relation between the two. Regarding
reporting/disclosure studied have been performed to test voluntary disclosure
the impact and web based performance disclosure on investor valuation and
information showed idris (2000).
According
to suliva (2011, p.15), he states the problems as the following:
1.
Reports are inconsistent and incomplete
scope and content the quality varies.
2.
The business implications of social and
environmental issues are not explained in the context of company strategy and
key value drivers.
3.
The processes for assessing materiality
or financial significant are not transparent.
4.
Companies do not tell what has been
excluded from the scope of reporting.
5.
It is difficult to compare companies
corporate responsibility performance.
1.04
THE
purpose of the study
The main objective of this study
include the following
1.
To identify the degree acceptance of
sustainability reporting in an organization.
2.
To examine the contribution of
sustainability reporting to the growth of the business organization
3.
To know if sustainability reporting is
enhancing efficiency in the business organization.
1.05 RELEVANT RESEARCH QUESTION
1.
Does the management of Mobil oil accept
the degree of sustainability reporting in an organization?
2.
To what extent has sustainability
reporting contributed to the growth in an organization?
3.
To what extent has sustainability reporting
enhance efficiency of business organization?
1.06
STATEMENT
OF HYPOTHESIS
The following hypothesis will be develop
and empirically tested, the result will be formed on the basis for
recommendation and conclusion.
Ho; (NULL HYPOTHESIS) sustainability reporting in
not accepted by management in an organization.
Hi; (ALTERNATIVE HYPOTHESIS) sustainability
reporting is accepted by management in an organization.
Ho; (NULL HYPOTHESIS)
sustainability reporting has not contributed to the growth of organization.
Hi; (ALTERNATIVE HYPOTHESIS) sustainability
reporting has contributed to the growth of the organization.
Ho; (NULL HYPOTHESIS) sustainability reporting has
not led to improvement of information in the organization which has improved
their efficiency.
Hi; (ALTERNATIVE HYPOTHESIS) sustainability
reporting has led to improvement of information in the information organization
which has improved their efficiency.
1.07
DELIMITATION
(SCOPE) OF STUDY
There
are some of the limitations of this study, despite the fact that research would
be successful. In any Research work, it may be impossible to take good care of
all problems involved, the only thing a researcher can do is to consider those
factors that are essential to Research. The actual limitation of the study is
the sample size of company’s may not be extensive enough to reflect the
situation of the company or organization.
1.08
ASSUMPTION
The
study assumes that the implementation standard can be labour intensive and
costly to a business, much like sustainability reporting as a whole due to the
time, labour and data required to produce a report.
The
information in a company’s report should be provide consistently to enable
comparability overtime and between companies.
1.09
SIGNIFICANT
OF THE STUDY
The
significant of the study cannot be over emphasizing. The study enables the
organization see the need for sustainability reporting in the day to day running of its activities
and contribution, sustainability reporting has the efficiencies of its service
to the organization on the study also provide an insight into the various ways
in which sustainability report performs in many companies as to increase its’ productivities.
The study will also reveal the need for improvement in the use of
sustainability reporting so as to satisfy the demanding desires of
organizations and compete with their counter parts in the company.
1.10
DEFINITION
OF unfamiliar TERMS
This
section of the study state they contain brief explanation of some technical
terms used in this study they are as follows:
1.
Sustainability
reporting: According to Lowis Allan (2003), he defined
sustainability reporting as economic development that meet needs of the present
generation without compromise the ability of future generation to meet their
own need for business this include issues of corporate social responsibility
and citizenship long with improved management of corporate social and environmental
impacts and improve stakeholder engagement.
2.
Profitability:
The oxford advanced learner’s Dictionary described profitability as the primary
goal of all business organization without profitability the business will not
survive in the long run.
3. Business organization:
According to Lori D (2012, P.23), defined business organization as an
individual or group of people that collaborate to achieve certain commercial
goal. Some business organizations are formed to earn goal income for owners.
4.
Environmental
reporting: Environmental reporting include article about
environmental and sustainability reporting and equipment provide research from
environmental regulators such as environmental reporting software to perform
reporting task. Mortared et al (2009)
5.
Social
reporting: Social reporting to the use of social media to
report collectively and live from events like workshops and conference.
6.
Organization:
A social unit of people that is structure and managed to meet a need or to
pursue collective goals. All organization hare a management structure that
determine relationship between the different activities and the members and
subdivide and assign role responsibilities and authority to carryout different
task.
7.
Information/reports:
These can be as facts needed by a person or group of persons, that is or will
be useful to him. These information or reports may be oral or written.
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