ACCA Applied Knowledge · Business and Technology · Governance in business organisations
A manufacturer publishes a voluntary report each year showing its energy use, carbon emissions and waste recycled, compared with targets it set itself. Which is the main benefit to the company of this reporting?
The main benefit is demonstrating accountability to stakeholders, which can enhance reputation and trust. Reporting energy, emissions and waste against targets shows commitment to sustainability. It does not replace statutory accounts and cannot guarantee higher profits, although it may support long-term value.
- AIt removes the need for the company to produce statutory financial statements
- BIt demonstrates accountability to stakeholders and may improve reputation and trustCorrect
- CIt guarantees the company will earn higher profits in the following year
Explanation
Voluntary environmental reporting shows accountability and can enhance reputation with customers, investors and communities. It does not replace statutory financial statements, and it cannot guarantee higher profits.
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