Climate Change and Global Warming Disclosure Trends in Bangladesh: A Study on Cement and Pharmaceutical & Chemical Industry

Purpose The core objective of the study is to critically examine the trends of the climate change & global warming discourses and their dominant characteristics in developing country International Journal of Accounting and Financial Reporting ISSN 2162-3082 2020, Vol. 10, No. 4 http://ijafr.macrothink.org 79 perspective like Bangladesh. Design/Methodology This paper extends the current literature by considering reporting practices of corporation in developing country perspective. Using a sample of 30 listed companies from two major emission intensive industries, we conducted a content analysis for a span of 5 years from 2015 to 2019. A data set consisting of 19 issues of climate change and global warming information was developed through literature review. Findings Although the study observes generally adapting increased disclosures over time, sample companies’ disclosures are lagging. This analysis provides the comprehension of below average climate change and global warming disclosure practices by the companies. Showed positive attitude to disclosing on climate change and global warming in terms of both number of issues disclosed and number of sample companies disclosed, only a few companies disclose rigorously in their annual reports. Compared to Bangladeshi companies, multinational companies are more inclined to comply environmental regulations and disclose more climate change and global warming issues. In particular, we improve the prior literature by focusing on voluntary climate change disclosures and by developing a content analysis to assess the extent of climate change disclosures by polluting industries in Bangladesh.


Introduction
One of the recent developments in the arena of social and environmental accounting is the issue of climate change and global warming. Global warming as an international environmental issue is getting ample importance from the part of the different stakeholders. The main reason for global warming is the emission of greenhouse gases (GHG) like carbon dioxide, methane and other gases from different sources. Media, global leaders, environmentalists, customers, investors and the other stakeholders are considering this issue seriously. As a result, companies face a lot of challenges in order to prove that they are careful about the environmental pollution and are performing in a responsible manner in this context. It is not enough for the companies just to perform their responsibilities in respect to global warming but they should also inform it to the stakeholders in order to maintain good public relations. Over last few decades, companies almost all around the world have developed a tendency to report on their environmental performances. In most of the cases, they disclose such kind of information voluntarily and mainly in non-quantitative form. Companies use words and statements to express their stands on the environmental issues. They use languages in these statements and thus these statements represent socially constructed meanings. Widdowson (2007: XV) mentioned that 'meanings are socio-cultural constructs of reality: they represent particular beliefs and values that define ways of thinking about the world'. As a result, we can say that the company statements on environmental issues represent their beliefs, values and motives.
Bangladesh is a developing country and thus the companies here are not under strict monitoring for GHG emission issues. Despite the absence of close monitoring, some companies are voluntarily disclosing on their stance regarding climate change and global warming issues in the annual reports. 'One of the reasons is the adoption of western-styled models in emerging economies that were promoted by attempts by governments and policy makers to gain legitimacy with external stakeholders such as international aid agencies and foreign governments' (Khan, Muttakin and Siddiqui, 2013: 210).
Research on climate change and global warming related disclosure is still in its elementary form in Bangladesh. This paper comes with the question of emission incentive industries' GHG disclosures in Bangladesh. CO 2 emissions per capita in Bangladesh are equivalent to 0.47 tons per person (based on a population of 157,977,153 in 2016), an increase by 0.02 over the figure of 0.46 CO 2 tons per person registered in 2015; this represents a change of 3.4% in CO 2 emissions per capita (Worldometer). Pharmaceutical & Chemical and Cement industries are the two major contributors of GHG emission. These two industries have been selected because burning of coal, natural gas, and oil for electricity and heat production produces a large amount of greenhouse gas. As a result, we pick these two industries as our sample to find out the extent of disclosures. To achieve the research objective, we conduct a discourse analysis of the corporate reporting of pharmaceutical & chemical and cement industries on climate change and global warming issues. Through a content analysis of the annual reports of 30 companies listed in Dhaka Stock Exchange or Chittagong Stock Exchange, the paper attempts to highlight the climate change & global warming discourses and their dominant characteristics.
The results of our study are presented here briefly. We find that overall result of reporting of climate change by two emission intensive industries in Bangladesh is lagging. The analysis provides the comprehension of below average climate change and global warming disclosure practices by two most emission intensive industries. Our results are consistent with the prediction of negative association arising from socio-political theory such as stakeholder theory and legitimacy theory. We improve the prior literature in way that we tried to relate voluntary disclosure theory particularly legitimacy theory in developing country perspective.
The remainder of the paper is organized as follows. Section 2 addresses the significance of climate change issues for Bangladesh. Section 3 reviews previous literature on the disclosures on climate change issues and identifies the research gap. In the next one we outline research design followed by the discussion of our analyses and findings. Finally, the last section presents our conclusions, recommendations, and limitations.

Climate Change and Bangladesh
Bangladesh is one of the most climate vulnerable countries in the world and will become more so as a result of climate change (MoEF, 2009). Climate change is imposing a deal of great threats to the residents, ecological balances and living environments of Bangladesh, a developing country which has just touched the recognition of lower-middle income (World Bank, 2015b). Millions of people are suffering because of climate change and each year handsome numbers of people are being added to the list. Because of climate change and global warming, sea level rise in the coming decades will create over 25 million climate refugees (DoE, 2007). This is twice the entire population of the Netherlands (DoE, 2007).

International Journal of Accounting and Financial Reporting
ISSN 2162-3082 2020, Vol. 10,No. 4 According to Ministry of Planning (2016), about 13% of the households and 12.64% of the population live in the disaster-prone area and are being affected by climate change. In 2015, Bangladesh Bureau of Statistics reported that Bangladesh suffered a financial loss of $2.33 billion because of natural calamities for which climate change is directly responsible (Ministry of Planning, 2016).
Climate change in Bangladesh is demonstrating its ravaged expressions by means of lower crop yields, higher sea levels, frequent floods, more intense cyclones and tornadoes, extreme rainfall, droughts, salinity, extreme fog and cold waves etc. (World Bank, 2014). Floods are frequently visiting in Bangladesh. According to the report of International Federation of Red Cross and Red Crescent Societies (2014), by the flood of August of 2014, around 2.8 million people were affected. According to Inter-governmental Panel on Climate Change (IPCC) (2007), the sea level may rise by 31cm to 71cm by 2100. In case of Bangladesh, the sea level may rise even by larger figure. IPCC forecasts that the sea level of Bay of Bengal can rise by 0.2m to 1m by 2100. In 2008, Bangladesh Water Development Board found that at Hiron Point of Sundarban, the sea level rose by 5.6mm (The Daily Star, 2013). Southeast coastal areas will be severely affected by increasing river salinity which will lead to shortages of drinking water, irrigation and impose a major threat to the aquatic systems. Cropping yield in the coastal area is under great intimidation for the soil salinity and it is anticipated that yield of rice will decline 15.6% by 2050 (World Bank, 2015a).
Industries greatly rely on the burning fossil fuels for production. Business sector is one of the main responsible parties for global warming and climate change. Since last decade, activities of the business are getting monitored by several stakeholders like the government, social parties, media and others. Especially after the agreement naming the Kyoto Protocol in 1997 signed by almost 175 countries, business organizations are constantly facing pressure from the part of different stakeholders (Ahmad & Hossain, 2015). The Bangladesh Climate Change Strategy and Action Plan (MoEF, 2009) notes the involvement of the private and business sector in meeting the challenges of climate change. In this context, the extent and nature of actual responses in relation to climate changes of business firms can be examined.

Related Prior Periods Work
The issue of corporate environmental disclosure is nowadays a very common issue in the social and environmental accounting literature. For many years various studies have been conducted worldwide on climate change and global warming issue that has unlocked newer avenues for social and environmental accounting researchers (Ahmad & Hossain, 2015). Climate change is an issue that calls for a corporate response as climate change significantly impacts business operations. One of the main future risks to business and society is the consequences of climate change (ACCA, 2007). As the impacts of climate change become increasingly severe and perceptible, corporations that continue to disregard the risks created by the earth's shifting climate stand to suffer significant financial harm (Wasim, 2019). The issues like climate change and global warming have influenced both 'climate science and climate policies'. Researchers have found some major reasons for global warming is the emission of greenhouse gases (GHG) like chlorofluorocarbons (CFC), carbon dioxide, methane and other gases from different sources. UNEP and UNFCCC (2002) mentioned that human activities are the main reasons for GHG emission and the main human activities that International Journal of Accounting and Financial Reporting ISSN 2162-3082 2020, Vol. 10,No. 4 add in global warming include burning of fossil fuels, cutting and burning the trees in the forest.
To hold businesses accountable for climate change performance, corporate climate change disclosure has increased substantially over the last decade ( (Ahmad, 2012). The researchers showed that no international standard is exclusively dedicated to environmental information, but environmental issues are mentioned in several standards and interpretations. They directly or indirectly deal with the reorganization, measurement and disclosure of environmental expenses, assets and liabilities. In an increasingly carbon constrained world, it is expected that organizations will disclose their policies and procedures pertaining to carbon emission and climate change in a comprehensive, transparent, and accountable manner. In this regard, one way of corporate responses might be the systematic measurement and reporting of their environmental and climate change impact (Hopwood, 2009).
As we have considered the emergent impact of climate change, more specific accounting and Government of Bangladesh (GoB) has recently enacted very important laws regarding environment such as the Bangladesh Environment Conservation Act, 1995 (hereafter the Act), and the Environment Conservation Rules, 1997. Under the Act, companies may be asked to disclose environmental information as and when required. Moreover, the Act, requires, environmental clearance from the Ministry of Environment and Forest before the establishment of a new industrial plant. There is an increasing demand from various stakeholder groups for companies to publicly report information about their climate change-related business practices (Global Reporting Initiative 2007). Wasim (2019) suggested that by encouraging companies to assess and disclose climate change risks, the lawsuits not only emphasize on maintaining transparency and efficiency in financial markets but also may spur innovation and new modes of thinking that can help mitigate the harmful impacts of climate change.
From the review of prior literature presented above, we see that there is a minimal, but growing, academic research investigating corporations' climate change-related disclosure practices within the Bangladesh context. Specifically, there is a complete absence of a study that investigates how emission intensive industries particularly cement and chemical, disclose the GHG and climate issues. Based on the literature gap, we try to address the issue of legitimacy of two major emission intensive industries in Bangladesh to report the climate change issues to the stakeholders.

Sample Selection and Data Collection
The main objective of the study is to critically examine the climate change and global warming disclosure practices of the listed pharmaceutical & chemical and cement companies in Bangladesh. Pharmaceutical & chemical and cement sectors have been selected purposively as a sample from the available sectors which are listed in both Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) to conform to the objective of the study. There are 32 pharmaceutical & chemical companies and 7 cement companies listed in both DSE and CSE. Out of them 24 pharmaceutical & chemical companies and 6 cement companies have been selected for this study as the annual reports of the others aren't available in online. The study was conducted in 2020. To make the study a contemporary and up to date, we collected data from the annual reports for the latest years. Therefore, 150 annual reports of the 30 sample companies (last 5 years annual reports) were collected. At this moment of analysis only two companies (Lafarge Surma Cement Ltd. & Heidelberg Cement Bangladesh Ltd.) haven't published their annual report of 2019 and hence 2018 annual report is considered as the latest of them. The 2018-19 annual report will be the latest for the rest 28 companies. To analyze in a convenient way, we consider the earliest period 'Year 1' and the latest period as the 'Year 5' consecutively (Annexure 1).

Content Analysis
A manual content analysis approach was followed in analyzing the annual reports to measure the volume of climate change and global warming information disclosure.

Disclosure Overview
This section deals with the analysis of nature and extent of the climate change & global warming disclosures by the sample pharmaceutical & chemical and cement companies of Bangladesh and figures out the findings linked with current practices. The study found that 87% of the total sample companies (total of pharmaceutical & chemical and cement companies) disclosed climate change & global warming issues in at least one item or category in their last five years annual reports. 13% of the sample companies didn't disclose any issue on climate change & global warming. Although it is observed from the above figure that disclosure performance is better in pharmaceutical & chemical industry as 87% of the sample pharmaceutical & chemical companies disclosed climate change & global warming issues in at least one item or category than that of cement industry as 83% of the sample cement companies disclosed at least one item or category in their last five annual reports, from the below analyses we can construe that the climate change disclosure practices by the companies are not generally satisfactory. over the sample years. From the above figure we also observe that some companies' disclosure rates remain static and some companies' disclosure rates are fluctuating in the annual reports over the last five years. There are two companies such as Renata Ltd. & BEACON Pharmaceuticals Ltd. who were not in the disclosure practice earlier started disclosing some issues related to climate change and global warming in their latest annual report which indicates that day by day companies are becoming concern on climate change and global warming when conducting their business operation.

Last five years disclosures by the Pharmaceutical & Chemical companies
Year-1 Year-2 Year-3 Year-4 Year-5   Lafarge Surma Cement Ltd.
Confidence Cement Ltd.

Premier Cement Mills
Ltd.

Meghna Cement Mills
Ltd.
Heidelberg Cement Bangladesh Ltd.

Last five years disclosures by the Cement companies
Year-1 Year-2 Year-3 Year-4 Year-5 Year following years after the first year and it became 25% in the final year. This figure also shows that disclosure performance by cement companies is quite better compared with pharmaceutical & chemical companies. In each of the last five years disclosure rate (average percentage of issues disclosed) by cement companies is higher than that of pharmaceutical & chemical companies though both the industries disclosure trend is upward year to year. This practice will help them to reduce the effect of activities, products and services to the climate change and global warming. This figure exhibits that average 16.5% of the total sample companies disclosed at least one item or category of climate change and global warming issues in the first year which is raised to 25.3% in the latest year. Average percentage of disclosing companies for both pharmaceutical & chemical and cement companies is increasing year to year. The cement industry is in the leading position as the number of disclosing companies is higher at this industry in all the last five years than that of the pharmaceutical & chemical industry (Annexure 3). This is very much satisfactory that year to year the companies are increasing the disclosure of climate change and global warming issues and new companies are engaging in disclosure practices which didn't do that before.

Number of Disclosing Companies
Year     To present clearer picture of the prone to disclose on climate change and global warming, here is the figure showing the comparison between pharmaceutical & chemical and cement industry on the basis of average number of sentences disclosed in the last five years. By disclosing on average 27 sentences, cement companies disclosed average 11 more sentences than those of pharmaceutical & chemical companies, representing 69% more sentences included in their annual reports on climate change and global warming. companies are less concern about this issue than the MNCs. Figure 9 & 10 exhumes that 84%  The above picture gives a close look on the issues disclosed by both multinational and Bangladeshi companies. The multinational pharmaceutical & chemical companies disclosed average 30.5% of different climate change and global warming issues which is nearly two times higher than those of Bangladeshi companies who disclosed only average 15.7% issues (Annexure 5). At the same time the multinational cement companies disclosed average 51.4% of different climate change and global warming issues which is over two times higher than Bangladeshi companies who disclosed only average 24.5% issues (Annexure 6). Figure 11 brings to light that MNCs are highly prone to disclose more issues than that of Bangladeshi companies. Currently MNCs in our sample industries are disclosing more than 100% than that of our local companies that gives the sign of less proneness to disclose on such voluntary but socially most desired issues.

Conclusions
The objective of this study is to explore the narratives noted in the global warming of the listed companies of two emission intensive industries in Bangladesh. The study exhibits that 13% of sample companies disclosed nothing related to climate change and global warming issues though pharmaceutical & chemical and cement companies are highly prone to climate change and global warming. Overall disclosure of the pharmaceutical & chemical and cement sectors is close to moderate but some companies disclosed considerable information on climate change and global warming information in their annual reports. Companies' disclosure rate on different climate change and global warming issues is increasing year to

Bangladeshi Compaies MNCs
International Journal of Accounting and Financial Reporting ISSN 2162-3082 2020, Vol. 10,No. 4 year. Gradually the non-disclosing pharmaceutical & chemical and cement companies are also engaging in climate change and global warming disclosure practice in their annual reports. Our results are consistent with the prediction of negative association arising from socio-political theory such as stakeholder theory and legitimacy theory. Both the theories predicted that in absence of stakeholders' monitoring and legitimacy in the society, companies are not willing to voluntarily disclose information. We improve the prior literature in way that we tried to relate voluntary disclosure theory particularly legitimacy theory in developing country perspective.
Nowadays climate related disclosure is limited not only to awareness but also in practice. Despite less contribution to the global climate change, the companies of Bangladesh are attempting to demonstrate their concerns for the legitimacy of their operations and their social contract with the society through climate change and global warming disclosure practices, even in the in-existence of any mandatory regulation. We recommended increasing monitoring by the government and other regulatory authorities of pharmaceutical & chemical and cement companies in Bangladesh in addressing climate change and global warming issues in their annual report. Moreover, the present climate change and global warming disclosure practices of the Bangladeshi companies experience the deficiency of more detailed and in-depth practices. With the increasing awareness among the stakeholders regarding the adverse effects of the climate change and global warming, it is anticipated that there will be an increasing tendency to provide climate change and global warming disclosure practices. Comparative studies will be needed in future to gauge any uprising trend in the climate change and global warming reporting practices by the Bangladeshi companies.
Limitation of this study is it was exploratory in nature and took an all-inclusive approach. We do not use any industry-specific content analysis. Moreover, without going to detail disclosures we used the binary analysis, i.e., scoring 1 for the disclosures otherwise 0. Future researchers can analyses the language of corporate disclosure on global warming issues.

Annexure 3
A. Number of sample companies disclosing the issues in the last five years (n= 30)

No. of companies disclosing the issues
Year 01 Year 02 Year 03 Year 04 Year 05 Organization has a separate Environment, health and safety plan and it discloses in the publicly available documents. 9 10 11 13 13 Anything mentioned about the climate change or global warming in the chairman's statement/CEO/ Directors report in the annual report. Year 02 Year 03 Year 04 Year 05 Organization has a separate Environment, health and safety plan and it discloses in the publicly available documents. 6 7 8 10 9 Anything mentioned about the climate change or global warming in the chairman's statement/CEO/ Directors report in the annual report.