Discuss some of the main challenges of environmental reporting, with reference to the concepts of ‘boundary’, ‘materiality’, and ‘accountability’ (Tregidga and Laine, 2021).

Question 1

What does ‘boundary’ refer to in environmental reporting (Tregidga & Laine, 2021)?

Answer 1

It determines the scope of the report (e.g., direct operations only or including supply chain), which greatly affects what gets measured and disclosed.

Question 2

Why is defining the boundary a challenge for organizations (Tregidga & Laine, 2021)?

Answer 2

Collecting reliable data from suppliers or downstream activities can be difficult, and deciding how far to extend responsibility can lead to inconsistencies or incomplete coverage.

Question 3

In Tregidga & Laine’s (2021) view, why is materiality challenging in environmental reporting?

Answer 3

Materiality can be subjective; some environmental issues may be critical to stakeholders but not immediately financially significant—potentially causing tension around what gets reported.

Question 4

How do IFRS S1/S2 attempt to clarify materiality?

Answer 4

They define material information as anything that could affect investor decisions about enterprise value, directing companies to prioritize financially relevant sustainability data.

Question 5

What is ‘accountability’ in environmental reporting according to Tregidga & Laine (2021)?

Answer 5

A commitment to owning the impacts an organization has on the environment—disclosing them transparently and taking responsibility for any negative outcomes.

Question 6

Why is accountability a persistent challenge (Tregidga & Laine, 2021)?

Answer 6

Companies may fear reputational damage or competitive risks from full disclosure; thus, some opt for selective reporting or greenwashing rather than true accountability.

Question 7

How do IFRS S1/S2 address the accountability challenge?

Answer 7

By requiring disclosure of governance and risk management around sustainability issues, they nudge firms toward accountability—albeit from an investor‐centric viewpoint.

Question 8

Summarize the key challenges linked to boundary, materiality, and accountability (Tregidga & Laine, 2021).

Answer 8

Boundary: Determining how far to extend reporting scope (value chain)
Materiality: Balancing financial vs. broader stakeholder significance
Accountability: Overcoming reluctance to disclose negative impacts and ensuring transparent, credible reporting