ACCA Strategic Professional · Strategic Business Leader · Stakeholder analysis and organisational social responsibility
Karolis Mining has an environmental report that lists only its successes, such as tree planting, and omits two serious pollution incidents that local communities know about. Which weakness in its reporting is MOST clearly shown, and what is the main stakeholder implication?
The report lacks balance and completeness. By leaving out known pollution incidents it appears selective, which damages credibility with stakeholders and risks accusations of greenwashing. The problem is omission of adverse information, not the use of non-financial measures or breach of IFRS.
- ALack of balance and completeness, which undermines credibility and may be seen as greenwashingCorrect
- BExcess detail, which makes the report too costly to prepare
- CUse of non-financial measures, which are never reliable
- DFailure to follow IFRS, which makes the report unlawful in all countries
Explanation
Omitting adverse incidents breaches balance and completeness, which are key qualities of credible sustainability reporting. Stakeholders who know the facts will distrust the report, and it risks being viewed as greenwashing. Non-financial measures are not inherently unreliable.
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