THE RELEVANCE OF TRIPLE BOTTOM LINE DISCLOSURE ON CORPORATE PERFORMANCE (A CASE STUDY OF INNOSON NIGERIA LIMITED ENUGU STATE)
ABSTRACT
This research work was undertaken to evaluate the relevance of triple bottom line disclosure on corporate performance with particular reference to Innoson Nigeria limited Enugu state, the researcher examined the disclosures in financial statement influence product consumption behavior and investment choice in the organization. The relevance of triple bottom line disclosure on corporate performance mitigates litigation risks posed by social and environmental claims on a company. The relevance of triple bottom line disclosures on corporate performance improve employee motivation with a view to reduce labor turnover in organization. the relevance of triple bottom line disclosure on corporate performance practice waste recycling, reduced and controlled emissions and selection of green suppliers lower operating cost for sustainable firms. Data for the study was sourced from two main sources which include Primary and Secondary sources of data Collection. Primary data: questionnaires and oral interviews were used to collect information from the respondents. Secondary data: journals, and other relevant materials relating to the area of my investigation will be review. Extensive literature review was carried out on the direct literature and indirect literature on books, journals and past works. The research instrument used in this study includes oral interview and questionnaire. The questionnaire is structural as to contain both close and open ended question. Simple tables and percentages was used in treatment of data. The researcher It was observed that principles and procedures that assist management for sustainable development have not been followed. Based on the findings the researcher recommends that Researcher recommends that management should be clear and accurate in its disclosure in respect to corporate performance to accord with the general accepted standards and measures. Management is advised to institute a special committee from various departments that ensure strict compliance with the recommendations and other necessary rules and regulation guiding the organization. Management should show true stewardship by careful managing of the assets as properties entrusted to them by the shareholders.
TABLE OF CONTENTS
Title page ii
Approval Page iii
Dedication iv
Acknowledgement v
Abstract vi
Table of contents vii
CHAPTER ONE: INTRODUCTION
1.1 Background of the study 1
1.2 Statement of the Research Problems 6
1.3 Objectives of the Study 7
1.4 Research Hypotheses 8
1.5 Research Questions 8
1.6 Signification of the Study 9
1.7 Scope of the Study 11
1.8 Limitation of the Study 11
1.9 Definition of Terms 12
CHAPTER TWO: LITERATURE REVIEW
2.1 The Concept of Triple Bottom Line Reporting 14
2.2 Triple Bottom Line as a Sustainable Corporate
Performance 17
2.3 Triple Bottom Line Disclosures on Corporate
Performance 25
2.4 The Path to Triple-Bottom-Line Reporting 32
2.5 TBLR: Meaning of TBLR and How it Measures 38
2.6 Corporate Performance Perspectives 42
2.7 Triple Bottom Line as Sustainable Corporate
Performance 46
CHAPTER THREE: METHODOLOGY
3.1 Research Design 51
3.2 Area of study 51
3.3 Population of the study 51
3.4 Sample Method 52
3.5 Research Instrumentation 55
3.6 Validity and Reliability of Research Instruments 55
3.7 Sources of Data 55
3.8 Method of Investigation 57
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Data Presentation 59
4.1 Test of Hypotheses 73
CHAPTER FIVE: SUMMARY FINDINGS, CONCISION AND RECOMMENDATION
5.1 Summaries of Findings 77
5.2 Conclusion 78
5.3 Recommendations 79
References 81
Appendix I 88
Appendix II 89
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study
With the current breakdown of confidence in financial reporting in the economic development face social and environmental impacts that result in social problems, global warming, natural disaster and pollution. And with the despair of shareholders on the lack of management accountability on its business activities generated an increase demands for more extensive information about the operations and financial standing of business. It therefore becomes imperative that corporation take more responsibility not only on traditional financial reporting but also include non-financial information about social and environmental issues which are triple bottom disclosure. Therefore becomes a need that corporations should adopt triple bottom line reporting to measure and evaluate their operational performance for sustainability.
This is recognition that there are limited resources to be utilized by today’s businesses as well as future generations, is a driving force behind incorporating additional reporting by companies. Traditionally, financial reporting is a detailed financial statement that serves as a means of communicating to the information on the financial resources, obligation and performance of a reporting organization. It serves as a medium to inform stakeholders about the accounting and economic performance of the corporation. A corporate annual report is a document which the security and exchange commission (SEC) requires every corporation to send to its stakeholders. It contains information about the corporations operations over the past year and its expected activities for the next year and detailed financial information. These documents must be sent to shareholders in advance of every annual general meeting. They must be sent also to debenture holders. The directors must file an annual return, which includes the annual accounts with the registrar of companies and the returns may be inspected by any members of the public or potential investors. Corporate annual report provides information about the financial position that will assist a wide spectrum of users in making useful economic decisions. The users of financial information are: investors, employee’s lenders, suppliers, customers, government and the public.
On the other hand, triple bottom line (TPL) reporting is a method used in business accounting to further expand stakeholder’s knowledge of the company. It is an accounting frame work incorporating three dimensions of corporate performance which are financial, social and environmental.
The frame work of triple bottom line focuses on the inter-related dimensions of profit, people and the planet (PPP) corporations adopt triple bottom line reporting to measure and evaluate their operational performance and also a concerted effort to incorporate economic, environmental and social considerations into a company’s evaluation and decision making process. It worth’s to know that social and environmental reporting is an aspect of sustainability development reflecting concerns about environmental protection, inter-generational activity, the earth and its resources. Corporate social responsibility also helps corporations in planning and tracking social and environment improvements that can bring corporate financial benefit. These would fully incorporate sustainability practice into their corporate strategy.
Moreover, some corporations regard corporate social responsibility as a negative drag on their business because it may entail costs in terms of both budgets and time. On the other hand, it can be seen as a positive driving force encouraging corporate top management to look more closely at the operations of the business and make it more successful and sustainable over the long term.
However, although there are many standards used to disclose non-financial information such as 150 14001, 150 2600, SA 8000 and AA 1000. All can measure and report on only a sing issues rather than reflecting multiple issues as can triple bottom line reporting the improved transparency and accountability levels of traditional financial report through inclusion of triple bottom line principles could serve as labyrinth safeguarding corporations against legal hassle and surmounting stakeholder’s pressure. Thus, ultimately leading to improved market share, improved employee motivation and reduced labor turnover in such organization. It also requires companies to report on a regular basis regarding the impact their activities have led on the environment.
Finally, these theories reflect the review that corporations with proactive social and environmental programmes gain competitive advantage over less socially and environmental.
1.2 Statement of the Problem
In this section, the researcher focused on the prevalent problems militating against the triple bottom line disclosure on corporate performance in Innoson Nigeria limited particular.
i. Relevance of triple bottom line disclosure on corporate performance mitigates litigation risks posed by social and environmental claims on a company.
ii. Triple bottom line disclosures in financial statement influence the disclosures on corporate performance.
iii. The relevance of triple bottom line disclosures on corporate performance improve employee motivation with a view to reduce labor turnover in organization.
iv. Relevance of triple bottom line disclosures on corporate performance influence product consumption behavior and investment choice in the organization.
1.3 Objectives of the study
a) To find out if the disclosures in financial statement influence product consumption behavior and investment choice in the organization.
b) To determine if the relevance of triple bottom line disclosure on corporate performance mitigates litigation risks posed by social and environmental claims on a company.
c) To know whether the relevance of triple bottom line disclosures on corporate performance improve employee motivation with a view to reduce labor turnover in organization.
d) To know whether the relevance of triple bottom line disclosure on corporate performance practice waste recycling, reduced and controlled emissions and selection of green suppliers lower operating cost for sustainable firms.
1.4 Hypotheses
Ho: the relevant of triple bottom line disclosure on corporate performance will lower the operating cost for sustainable forms.
Hi: the relevant of triple bottom line disclosure on corporate performance will not lower the operating cost for sustainable forms.
1.5 Research Questions
1. To what extent would the relevance of triple bottom line disclosure on corporate performance influence product consumption behavior and investment choice in the organization?
2. To what extent would the relevance of triple bottom line disclosure on corporate performance mitigates litigation risks posed by social and environmental claims on a company.
3. To what extent would the relevance of triple bottom line disclosures on corporate performance improve employee motivation with a view to reduce labor turnover in organization.
4. To what extent would the relevance of triple bottom line disclosure on corporate performance practice waste recycling, reduced and controlled emissions?
1.6 Significance of the Study
The significance of the study is to achieve great success in contributing the little the researcher can, if not a great deal in solving the problems posed by the traditional financial reporting.
1. Triple bottom line reporting covers areas that have not been touched by the financial reporting.
2. The study will protect the environment and society against dangers both within the organization and outside.
3. It will corporate plan and track social and environmental improvement that can bring corporate financial benefits.
4. It will serve as a positive driving force encouraging corporate top management to look more closely at the operation of their business and make it successful and sustainable.
5. Finally though the researcher restricted the study to Innoson Nigeria limited, the result of the findings will be of immense benefit to other corporations as well as students conducting similar work on the same topic or related ones.
1.7 Scope of the Study
The scope of this study is restricted to Innoson Nigeria limited Enugu, Enugu state in particular, where triple bottom line disclosures is in progress with respect to this research topic. It was consumers and manufacturers representatives received the questionnaires.
1.8 Limitation of the Study
In a study of this nature, one would like to gather data from many areas. But, in view of length of time allowed for this research work was not enough.
There were problems that stemmed up during the research work in which some of them are as follow:
1. Financial constraints: As a student, there was not enough capital to spend for fact finding and borrowing of necessary literature that would have helped in the writing of this research work.
2. Management constraint: The respondents especially the manager, did not co-operate as was expected. The workers also in the different departments visited were as relevant in answering some of the questions asked.
3. Lack of materials: This also contributed to the limitations of the work. The researcher unwilling to disclosure certain information which affects the collection of data for the work.
1.9 Definition of Terms
a. Triple bottom line reporting can be defined as corporate communication with stakeholders that describes the company’s approach to managing one or more of the economic environmental and social dimension of its activities and through providing information on these dimension.
b. Corporate social performance is a corporate responsibility in which the environmental aspect is included is synonymous with corporate social responsibility and socially responsible behavior.
c. Corporate performance refers to the end result of management process in relation to corporate goals.
d. Corporate financial performance: This is a management responsibility to improve the financial performance of a company.
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