ENVIRONMENTAL ACCOUNTING CONCEPT AND REPORTING PRACTICE: EVIDENCE FROM BANKING SECTOR OF

BANGLADESHPRESENTED BY:

Md. Abdul Kaium MasudAssistant Professor

Department of Business Administration,

Noakhali Science and Technology University,

Mohammad Sharif HossainUttara University

Saifuddin KhanLecturer,

University of Rajshahi, Rajshahi

INTRODUCTION:Environment is not only a word but also a definition of life. We do not think about our future generation. We are so concerned of our business, property, bank balance, wealth etc. But who will consume these? Interestingly, business doesn’t ask to make the world complex. Every day we are destroying our environment and now Bangladesh is the fourth country with worst urban air quality in the world (The Daily Star, 2016).

LITERATURE REVIEW:Environmental reporting has been a phenomenon of developed countries and therefore, most environmental accounting and reporting studies were confined to the developed countries (Belal, 2000) and a handful of studies concentrated on the newly industrialized countries such as Korea, Hong Kong, Malaysia and Singapore and African countries such as South Africa, Nigeria and Uganda.

LITERATURE REVIEW:Choi 1998, Hossain and Chowdhury, 2014, Bose Sudipta, 2006, Rahman and Muttakin, 2005, Belal, A.R (1997,1999), Gray, Adam has examined different studies on environmental reporting.

OBJECTIVES OF THE STUDYThe research focuses on the environmental

accounting concepts and reporting practices of banking sector of Bangladesh. The study also covers the following specific objectives:

To find out the present environmental accounting practices of banking sector.

To find out whether the banking companies have taken any protection on environment.

To observe the position of environmental information in the annual report.

To observe the legal position of environmental accounting in Bangladesh.

METHODOLOGY AND DATA COLLECTION:

The study is purely based on the information from secondary data sources. The reason is that in our country the use of environmental accounting and reporting is rare and in most of the cases, the concept and understanding is not proactive. The data collected for the purpose of the study involves the examination of annual reports for the year 2010 and 2014 of selected banks.

METHODOLOGY AND DATA COLLECTION:

The data collected for the purpose of the study involves the examination of annual reports for the year 2010 and 2014 of selected banks. The study is completely a descriptive research on environmental accounting concept and reporting practices of banking sector in Bangladesh based on a small sample size.

METHODOLOGY AND DATA COLLECTION:

The banking companies considered in the study include twelve scheduled private commercial banks listed in the Dhaka stock exchange. In the study judgment sample has been used for choosing the sample banks. Scheduled and listed banking companies are only considered for the study.

METHODOLOGY AND DATA COLLECTION:

The sample for the study has been taken from the scheduled private commercial banks of the country. Bangladesh bank is the central bank of the country and the chief regulatory authority in the financial sector. The banking system is composed of 4 state-owned commercial banks, 4 specialized development banks, 35 private commercial Banks and 9 foreign commercial banks and a total of 52 scheduled banks.

ENVIRONMENTAL ACCOUNTING CONCEPTS

Accounting is a recording process that collects records and communicates the necessary information to the different stakeholders to survive in the society.

EA is concerned with the information of the organization related with environment and environmental issues. Environmental accounting describes the generation, analysis and use of monetarised environmental information in order to improve organizational environmental and economic performance.

NEED OF ENVIRONMENTAL ACCOUNTING IN CORPORATE LEVEL:

To understand the overall environmental performance of the organization.

To identify environmental risks of the organization.

To know the environmental policy of the organization.

To measure environmental responsibilities of the organization.

To assess annual environmental expenditure.

Calculating costs and savings of Environmental projects.

To show eco-design projects.

SCOPE OF ENVIRONMENT ACCOUNTING

Investment made into the environment friendly equipment.

Stopping pollution like soil erosion, loss of bio diversity, air pollution, water pollution, problem of solid waste, coastal & marine pollution.

Working on nonrenewable natural resources.

Encouraging nonrenewable energy sector.

Climate change issues.

ORGANIZATIONAL BENEFITS OF PRODUCING ENVIRONMENTAL REPORT:

Organization has benefits of producing environmental report from internal and external point of view. It also helps to understand the internal benefits, such as cost savings, environmental grants and reward given by government and other organizations, tax benefits or revenues generated. On the other hand, the external environmental costs and benefits are the impact which the organization’s activity has on wider society and environment at present and in the future. It helps to understand the external environmental impacts such as contamination of ground water, traffic congestion, and poor urban air quality (The Daily Star, 2016) and so on

Environmental Accounting Concept of Banking Sector of Bangladesh: Environmental accounting is a

concept of developing countries and Bangladesh is far behind of the concept and reporting. But presently due to different stakeholders’ pressures, companies are trying to provide some information in the annual report. Bank is a financial organization and non manufacturing in nature.

ENVIRONMENTAL ACCOUNTING CONCEPT OF BANKING SECTOR OF

BANGLADESH: Mercantile Bank Limited (MBL)

2010 to 2014 states its annual report; the whole world is increasingly experiencing the devastating effects of environmental changes for green house affects due to global warming. The bank is mindful of its responsibilities to the future generations by playing its part in promoting environmental awareness and in the conservation of the environment.

ENVIRONMENTAL ACCOUNTING CONCEPT OF BANKING SECTOR OF

BANGLADESH: Export Import Bank Limited (EXIM) 2010 to 2014 described in the annual report; EXIM bank is extremely conscious about the effect of carbon-emission, green house-effect and global warming phenomenon. EXIM bank has been scrutinizing the environmental and social impacts of various running and proposed projects

LEGAL STATUS OF ENVIRONMENT ACCOUNTING AND REPORTING

Ministry for Forest and Environment, Department of Forest, Department of Environment, Planning Commission, Bank Companies Act 1991, National Environment Policy, 1992, Financial Institutions Act 1993, Securities and Exchange Commission Act 1993, Financial Institutions Act, 1993,Companies Act 1994National Environmental Management Action Plan, 1995, Environmental Conversion Act, 1995, Environmental Conversion Rules, 1997

Environmental Protections Activities Taken by the Banks:

Name of Bank

Major Environmental Protective Functions

Islami Bank Bangladesh Ltd.

ETP, Bio-gas plant, Solar Home System, Solar Panel trades, Bio-ertilizer plant, Tunnel Kiln, Installation of Zigzag kiln, Waste and hazardous disposal plant, Waste paper recycling plant, Waste attery recycling plant, Financing of LED bulb production, Safe/Clean Water Supply Projects, Improved cooking stove (Bandhu Chula

Al Arafa Islamic Bank Ltd.

Tree plantation, ETP, HHK & Zigzag technology, Solar panel, Introduces "Green Office Guide" for In-house Environmental Management.

Brack Bank Ltd.

Paperless banking, Solar energy, Green financing, Climate risk fund, Marketing and training & capacity building, ETP, Solar Panels, Double hull oil tanker, Environment friendly brick fields

ENVIRONMENTAL DISCLOSURES OF SELECTED BANKS

ENVIRONMENTAL DISCLOSURES OF SELECTED BANKS

2010 2011 2012 2013 20140

2

4

6

8

10

12

14

Qualitative In-formationQuantitative In-formation

PLACE OF ENVIRONMENTAL INFORMATION IN THE ANNUAL

REPORT

CONCLUSIONEnvironmental Accounting would be the best weapon of the modern business management to create accountability in the society as well as to save the environment from the present conditions. It can be used like a mirror of the business organization to show what impact its activities can create on society.

CONCLUSION The study found that

environmental accounting concept and reporting practices of Bangladeshi banking companies are upward in trend. Most of the banking companies are trying to disclose some environmental information in the annual report

CONCLUSION

The performance of disclosing environmental information and place of information in the annual report is poor in the year of 2010 and 2011. Moreover in the period of 2012 to 2014 all banking companies EAR performance is in strong position and all banks (100%) disclosed environmental information in the annual report

CONCLUSION More than 90% banking companies

disclosed both financial and nonfinancial information in the annual report. However on average more than seventy five percent (75%) banking companies disclosed environmental information in the different section of annual report. It indicates the importance of management in the matter of EAR. Most of the banks provide information of environmental accounting in a separate section that is highly appreciable.

CONCLUSION We strongly want to say that

environmental reporting should be made mandatory in Bangladesh. Banking companies in Bangladesh should be asked to submit the detailed environmental information to the government relevant institutions specially Bangladesh bank. Company law, Banking companies law and Securities and Exchange Commission law should give the mandatory directions regarding disclosing EAR

THANK YOU

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