The public
concerns on the environmental issues have increased. It involves issues such as
exposure to hazardous substances in water, air, soil and food as well as
physical hazards. Because of these problem, society tend to
concern more on environment as it effect their daily life in future as they
need to inhale clean air, use clean water to drink and using it for daily
chores. Hence, environmental issue has its greatest impact on people whose
health status is already at risk. Subsequently, this initiates stakeholders to
be more sensitive about the harmful aspects of industrial activities on
environment. This has led companies facing the
challenges not only to confine their attention to economic goals but also need
to provide environmental information.

            In Malaysia, there are more than 100
reports on 169 companies’ in 2016 that commits offense under Environmental
Quality (Amendment) Act 2012 such as using hazardous substances and release
chemical gas over the permitted amount and allowing open burning in the
premises besides fail to follow the regulations under Environmental (Amendment)
Act 2012 (DOE, 2017). Companies that neglect environmental considerations could
incur loss of customers’ confidence in buying or using their products and
services, loss of potential investor and the huge cost to pay the compensation
if the company fails to follow the regulations required. It resulted company to
take initiative to cater the impact of business activities on environment and
the company needs to find a way how to deal and handle this problem to protect
company reputation. Hence, company must address
the environmental factors that increase the likelihood of exposure and disease
to society which is by providing environmental reporting.

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            Environmental reporting is embodied in the broad concept of corporate
social responsibility reporting. Companies can present their environmental
information in many forms, either by establishing their sustainability report,
environmental disclosure in the annual report or through company’s
website.  Environmental reporting is one of
the ways of how company can communicate with the stakeholders and improve the
relationship between the stakeholders by showing how proactive and responsible
the company is. It is also to maintain a sustainable business in the industry.

            Even though the number of
environmental information in reporting in Malaysia is still at low level but
the number of companies who decides to disclose more in environmental reporting
has increasing from year to year as Bursa Malaysia has make mandatory
requirements for company to do corporate reporting in annual report that
includes environmental reporting in 2007 (Said et al., 2016). However, Malaysian Code on Corporate Governance (MCCG) 2017
encourages companies to be more transparent in disclosing more information in
environmental reporting. MCCG requires companies to provide more meaningful
explanation by disclosing the action they have taken on environmental issue.
MCCG as well as Bursa Malaysia has taken several methods in order to make
environmental aspects includes in annual report of every companies (ACCA,

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