Environmental accounting disclosure in ASEAN countries

This study aims to determine whether there is a difference between the scores of country-based environmental accounting disclosure (in the ASEAN region) and industrybased environmental accounting disclosure (in real estate, forest/agriculture, consumer goods, hospitals, energy, and chemicals/pharmaceuticals). The research method used is One-Way ANOVA difference test. The results show that there is a difference in the scores of country-based environmental accounting disclosure. The difference is between Indonesia and Singapore and between Indonesia and the Philippines. Furthermore, there is no significant difference in the scores of industry-based environmental accounting disclosure, as well as when viewed from each of ASEAN countries. Each country needs to have more stringent regulations and policies to require each company to present the environmental accounting disclosure in the annual report or sustainability report as a form of corporate legitimacy to the public. In addition, there should be a revision of the nature of the environmental accounting disclosure in the financial accounting standards, from voluntary to mandatory. It is intended that every company of various types of industries really pay attention to the environmental impact problems arising from its operational activities.


INTRODUCTION
Southeast Asia has abundant and beautiful natural wealth. Its strategic position, between two continents and two oceans, makes this region become a destination for trade and industrial expansion. Unfortunately, the rapid economic and industrial growth in the last thirty years has caused enormous environmental damage in Southeast Asian countries. The environ-mental impacts in this region also extend beyond the borders of Southeast Asian countries. It is due to the multinational corporations and industrialized nations that direct the expansion of their operations and technologies to Southeast Asia. This, in turn, may cause environmental damage. The damage can lead to (Greenpeace Southeast Asia 2013): 1) sea threats, such as whaling and overfishing; 2) toxic waste that can contaminate springs; 3) global climate change due to the continuous production of carbon dioxide released into the atmosphere as a result of the use of fossil fuels, such as coal, natural gas and petroleum; 4) nuclear power energy; and 5) forest conservation.
Every company has a significant role for the issues of environmental damage. They need to make environmental problems as the main focuse. There are four reasons for the increasingly significant environmental issues (Pratiwi 2013): 1) the size of the company is getting larger. Higher accountability is required in making decisions regarding the operations, products, and services produced; 2) environmental activists and NGOs will demand responsibility for environmental damage or social impacts arising from the operations of the company; 3) corporate reputation and image; and 4) rapid technological developments.
The ways how a company reduces environmental impacts need to be explained in the financial statements, known as environmental accounting disclosure. Environmental accounting is not only dependent on the accuracy in classifying all costs made by the company, but also the ability and accuracy of the corporate accounting data in minimizing the environmental impacts arising from the company's activities.
It seems, there is a research gap between the previous researchers on environmental accounting disclosure. The research by Cho et al. (2007) indicate stated that the use of monetary and non-monetary components of non-litigation related to the environmental disclosures varies across groups. In general, the findings provide additional support for the argument that companies use disclosure as a means of legitimacy. Similarly, O'Donovan (2002) also found the relationship between legitimacy theory, as explanatory factor, and environmental accounting disclosure. The results of the research done by Cormier et al. (2004) show that there is a relationship between the attitude of the environmental manager to the various stakeholder groups, including how the managers respond to stakeholders through the decision to disclose, and the actual disclosure they make. In addition, the findings of the research conducted by Mukherjee et al. (2010) indicate that the variables affecting the environmental disclosure are the applicable tax rate, liquidity and leverage. Therefore, it can be said that legitimacy, stakeholders and theory institutions simultaneously explain the practice of corporate environmental disclosure in India.
Different results were obtained in the research by Fekrat et al. (1996). The main findings showed that although companies in some European countries provided environmental accounting disclosure, the disclosure did not correlate with the company's environmental performance. This is also supported by Wilmshurst et al. (2000) that legitimacy theory served as an influential factor in the process of management decision making and environmental disclosure. Smith et al. (2007) stated that environmental disclosure in Malaysian companies was negatively related to the company's financial performance.
From the practical issues and empirical studies above and after knowing how each country in ASEAN-5 implements environmental accounting disclosure, it is necessary to examine whether there is a difference or whether they have been aligned. The implementation is seen from the scores of environmental accounting disclosure based on the aspects of the country and industry.

THEORETICAL FRAMEWORK AND HYPO-THESIS Legitimacy Theory
According to Tilling (2010), legitimacy theory is defined as the perception or assumption that the desired organizational action is in accordance with the social system built on norms, values, beliefs and understandings held by the society. Cormier et al. (2004) concludes that legitimacy theory is a communication through an annual report of how organizations respond to the environment and society. However, in society there are many groups of individuals. Generally, the groups are referred to as "stakeholders." Based the theory above, it can be concluded that every organization or company needs to adjust to the values adopted by the community. As a form of legitimacy between the company and the community, it is necessary to have a social contract that binds both. This social contract indicates that the company will pay attention to the public interest, one of which is not to disturb the environmental aspect. All activities, undertaken by the organization to prevent, minimize, and stop environmental impacts, should be presented in the environmental accounting disclosure. Thus, there will be no gaps between the organization and society that can disrupt the activity of both parties.

Stakeholder Theory
According to Freeman (1984), every organization has stakeholders, i.e. groups and individuals who are benefited or disadvantaged, and whose rights are violated or respected by corporate action. Stakeholder theory arises because the organization needs to pay attention to its stakeholder interests, such as (Iryani 2009): 1) environmental issues involve the interests of various groups in society that can disrupt their quality of life; 2) the era of globalization has encouraged traded products to be environmentally friendly; 3) investors, in investing, tend to choose companies that own and develop environmental policies and programs; and 4) environmental activists and NGOs are increasingly vocal in criticizing companies that are less concerned about the environment.
The stakeholder theory above shows the importance of environmental accounting disclosure as a form of transparency and accountability provided by the company to its stakeholders to prevent, minimize and stop any environmental impacts occurring or may potentially occur in the future.

Environmental Accounting Disclosure
Disclosure can be interpreted as the expression of information presented in financial reporting (Nuswandari 2009). While the disclosure of environmental accounting is defined to identify the size, value, and accounting report of financial cost in the company's financial statements (Umami 2010). According Ikhsan (2008), environmental accounting disclosure is a type of voluntary disclosure of environmental accounting information from the point of view of the external function of environmental accounting. Therefore, it is necessary to disclose external environmental accounting data to clarify the prerequisites of the disclosed data so that stakeholders gain a consistent understanding of the environmental accounting data.
According to Pratiwi (2013), there are several ways to disclose information on environmental responsibility: 1) presentation of environmental information through "disclosure" can be done by making an overview of company activities related to efforts to preserve the environment, independent party's assessment results related to the compliance of the entity to environmental sustainability ; 2) environmental responsibility reporting can also be presented in the core financial statements, for example the equipment provided to reduce environmental pollution can be presented as a fixed asset; 3) costs incurred to prevent the environment from pollution can be recognized as an expense in the income statement.

Hypothesis Development
Despite the differences, each country has its own environmental regulations tailored to the existing conditions. The implementation, supervision, re-ward, and punishment in each country can also be different. If the country's good governance, consisting of transparency, accountability, and participation, runs well, the environmental aspect will possibly also work well. This will have an effect on how the company presents environmental accounting disclosure in its annual report or sustainability report.
Environmental accounting disclosure is very important as a form of corporate legitimacy to the society which is in accordance with the theory put forward by Freeman (1984). Based on the results of the research conducted by O. Gamble et al. (1996), Teoh et al. (1998), andSmith et al. (2007), there are significant differences in environmental accounting disclosure among the countries. Therefore, the hypothesis can be formulated as follows: H1: There are significant differences in countrybased environmental accounting disclosure scores.
Environmental accounting disclosure is necessary for a company as a form of corporate transparency and accountability to its stakeholders from every operational activity to prevent, minimize, and stop any environmental impacts that are occurring or that may potentially occur in the future. However, each industry has a different culture. This can be seen from the management style and accounting policies applied by the company. And the possibility of the environmental accounting disclosure scores of each industry will also be different. The results of the research conducted by Fekrat et al. (1996) andO. Gamble et al. (1996) indicate that there are significant differences in industry-based environmental accounting disclosure scores. From the above description, the hypothesis can be formulated as follows: H2: There are significant differences in industrybased environmental accounting disclosure.

RESEARCH METHOD Population and Sampling Technique
The sampling technique used in this research is purposive sampling method, a sampling technique done purposely, with the following criteria: 1) companies or issuers in the ASEAN-5 incorporated in the LQ45 Index (Indonesia), STI (Singapore) Syarikat 30 (Malaysia), SET50 (Thailand), and PSEi (Philippines). Other ASEAN countries are not included in the study because there are some of the ASEAN countries that do not have stock exchanges (such as Brunei Darussalam and Timor Leste) or because of the difficulty in finding data from every stock exchange from other countries, such as in Vietnam; 2) being the members of industry group that has links with environmental accounting, consisting of real estate, Variable/Sub-  forest/agriculture, consumer goods, hospital, energy, and chemicals/pharmaceuticals; and 3) presenting Annual Report data on company website, stock exchange, or performance profile website, such as www.finance.yahoo.co.id and www.quotes.wsj.com

Operational of Variable
The dependent variable in this research is environmental accounting disclosure score, while the independent variables are country-based environmental accounting disclosure and industry-based environmental accounting disclosure. The details of dependent and independent variables in this study are described in Table 1.

Data Analysis Method
The main objectives of this study are to examine and analyze the differences between the country-based environmental accounting disclosure (H1) and industry-based environmental accounting disclosure (H2) using One Way ANOVAs statistical difference test.

DATA ANALYSIS AND DISCUSSION Sample Description
The Average Scores of Country-Based Environmental Accounting Disclosure: Scoring in environmental accounting is conducted by reviewing annual reports and/or sustainability reports of the companies taken as the samples of this research with the criteria as presented in Appendix 1. Total score if a company presents all of its environmental accounting disclosure according to criteria is 54. The score generated by the company is then calculated to find its weighted score by dividing the actual total score of 54. The average score of environmental accounting is seen from both total and weighted score. From the result of the review is obtained the average countrybased scores as shown in Table 2. From Table 2, it can be seen that the country having the highest average score of environmental accounting disclosure is Indonesia, or 12.50, with a weighted average score of 23.13%. This indicates that in Indonesia there are many companies that provide  information about their environmental accounting disclosure, followed by Thailand (19.05%) and Malaysia (16.31%). Singapore and the Philippines are the two countries that have a weighted average score below ten percent, or 9.83% and 9.23% respectively. The Average Scores of Industry-Based Environmental Accounting Disclosure: Just like those of the country-based environmental accounting disclosure, the average scores of industry-based environmental accounting disclosure are seen from the total and weighted scores. (Table 3) For Indonesia, Singapore, and the Philippines, the largest average score of industry-based environmental accounting disclosure is in the energy sector. This is quite reasonable because energy exploration activities can directly affect a country's environmental or natural resource damage if the company does not have high standards in preventing the environmental impacts.

Average Total Scores of Environmental Accounting Disclosure
In Thailand, Indonesia, and Malaysia, the environmental accounting disclosure score for the forest/agriculture industry is considerably high. Given the recent case of forest fires in Indonesia in which its smoke inflicts on other ASEAN countries, thus requiring companies to explain how they are working to prevent, minimize and stop environmental impacts due to the company's forest exploration.
Real estate, consumer goods, and pharmaceuticals sectors provide an average of sizeable disclosure score in each country. This indicates that in each country, the three industries have already presented the environmental accounting disclosure in their annual reports.
For hospitals industry, it is only Thailand that presents the environmental accounting disclosure, while Indonesia does not explain the environmental accounting disclosure at all. This is very surprising considering that waste from hospital can directly interfere with the environment, one of which is the disturbance in plants and animals as well as human health due to viruses, bacteria, and so forth.

Average Weighted Scores of Environmental Accounting Disclosure (Table 4)
In Indonesia, the forest/agriculture industry has the highest average score in environmental accounting disclosure, or 63%. This means that the forest/agriculture industry provides environmental accounting disclosure almost in every aspect as presented in Appendix 1. Then, each of other industries has average scores under 50% with the highest score in energy industry 42%, consumer goods 20%, pharmaceuticals/chemicals 17%, and real estate 15%. It is only hospital that does not provide any environmental accounting disclosure.
Malaysia and Thailand, on average, each industry provides environmental accounting disclosure in    annual reports below 50%. In Malaysia, the sector that provides the largest environmental accounting disclosure is in the consumer goods industry sector, while in Thailand is in the forest/agriculture sector.
Meanwhile, industries in Singapore and the Philippines have the lowest average environmental accounting disclosure below 20%. This may indicate that the industries in both countries still provide low environmental accounting disclosure in their annual reports or sustainability reports.

Hypothesis Testing Significant Difference Test of Country-Based Environmental Accounting Disclosure
This can be seen in Table 5. Prior to testing significant differences in the environmental accounting disclosure score of each ASEAN country, it should be seen first whether the research data are normally distributed or not by using the Kolmogorov-Smirnov One-Sample normality test. With a significant probability > 0.05, the test results show that the environmental accounting disclosure score is 0.093 > 0.05 indicating the data are normally distributed. The weighted score of environmental accounting disclosure is 0.069 > 0.05 which also indicates that the data are normally distributed. Thus, hypothesis testing can use one way ANOVAs difference test (see Table 6).
With the significance level α = 5%., One Way ANOVAs test result of the country-based environmental accounting score has a total significance value of 0.012 < 0.05. This indicates that H0 is rejected, which means that there is significant difference in environmental accounting disclosure score in each country. A similar result if using a weighted significant environmental accounting score is 0.014 < 0.05.
If tested further by using Multiple Comparison Tukey HSD, it can be seen that the difference between Indonesia and Singapore has significance value of 0.044 (<0.05), and between Indonesia and the Philippines has a significance value of 0.023 (<0.05) (see Table 7).

Significant Difference Test of Industry-Based Environmental Accounting Disclosure
The data of industry-based environmental accounting disclosure scores are the same as the test in Table  8   that point, the difference test can be done using One Way ANOVAs. With the significance level α = 5%., One Way ANOVAs test result of the total score of industrybased environmental accounting disclosure has a significance value of 0.722 > 0.05. This indicates that H0 is accepted, so there is no significant difference in industry-based environmental accounting disclosure scores. The same result is obtained when using a weighted environmental accounting score, with significance value of 0.707 > 0.05. By using Multiple Comparisons, it can be seen that each industry has no significant difference. From Table 9, it can be seen that the comparison among industries has significance value more than 1.5. Furthermore, it can be seen that there are differences in industry-based environmental accounting disclosure scores in each ASEAN country (see Table 10).

Indonesia
The number of samples of used in Indonesia is twenty-four. The results of normality test of Komogorov-Smirnov Test show that the data of the total environmental accounting disclosure scores are normally distributed, with a significance value of 0.704 (> 0.05). Similarly, the weighted environmental ac-counting disclosure score has a significance value of 0.764 (> 0.05). From the results of One Way ANOVAs difference test, the total environmental accounting score has a significance value of 0.221 (> 0.05), while the weighted environmental accounting score has a significance value of 0.226 (> 0.05). This indicates that there is no significant difference in industry-based environmental accounting scores in Indonesia.

Malaysia
The number of samples in Malaysia is thirteen, The results of the normality test of Komogorov-Smirnov Test show that the data of the total environmental accounting scores are normally distributed, with a significance value of 0.882 (> 0.05). Similarly, the weighted environmental accounting score has a significance value of 0.818 (> 0.05). From the results of One Way ANOVAs difference test, the total environmental accounting score has a significance value of 0.806 (> 0.05), while the weighted environmental accounting score has a significance value of 0.821 (> 0.05). This indicates that there is no significant difference in industry-based environmental accounting scores in Malaysia.

Singapore
The number of samples used in Singapore is twelve.  The results of the normality test of Komogorov-Smirnov Test show that the data of the total environmental accounting scores are normally distributed with a significance value of 0.103 (> 0.05). Similarly, the weighted environmental accounting score has a significance value of 0.080 (> 0.05). From the results of One Way Anova difference test, the total environmental accounting score has a significance value of 0.789 (> 0.05), while the weighted environmental accounting score has a significance value of 0.775 (> 0.05). This indicates that there is no significant difference in industry-based environmental accounting scores in Singapore.

Thailand
The number of samples used in Thailand is nineteen The results of the normality test of Komogorov-Smirnov Test show that the data of the total environmental accounting score are normally distributed, with a significance value of 0.737 (> 0.05). Similarly, the weighted environmental accounting score has a significance value of 0.712 (> 0.05). From the results of One Way Anova difference test, the total environmental accounting score has a significance value of 0.479 (> 0.05), while the weighted environmental accounting score has significance value of 0.447 (> 0.05). This indicates that there is no significant difference in industry-based environmental accounting scores in Thailand.

The Philippines
The number of samples used in the Philippines is thirteen. The results of the normality test of Komogorov-Smirnov Test show that the data of the total environmental accounting score are normally distributed, with a significance value of 0.078 (> 0.05). Similarly, the weighted environmental accounting score has a significance value of 0.088 (> 0.05). From the results of One Way Anova difference test, the total environmental accounting score has a significance value of 0.547 (> 0.05), while the weighted environmental accounting score has a significance value of 0.550 (> 0.05). This indicates that there is no significant difference in industry-based environmental accounting scores in the Philippines. The test in each country also strengthens the results of this research that there is no significant difference in industry-based environmental accounting disclosure scores.

Analysis and Discussion The Difference in Country-Based Environmental Accounting Disclosure Scores
The environmental accounting disclosure presented by each company is a manifestation of the implementation of the law of each country related to environmental aspects. The result of the research shows that there is a significant difference in the countrybased environmental accounting disclosure scores.
In Indonesia, the average items are only disclosed in general, with an average total score of thirteen. For the accounting and financial aspects, only ten companies that disclose publicly: PT Adhi Karya (Persero) Ltd., PT Indocement Tunggal Prakarsa Ltd., PT Semen Indonesia (Persero) Ltd., PT Wijaya Karya (Persero) Ltd., PT Indofood Sukses Makmur Ltd., PT Indofood Sukses Makmur Ltd., PT Perusahaan Gas Negara (Persero) Ltd., and PT Tambang Batubara Bukit Asam (Persero) Ltd. For litigation aspect, it is only PT Astra Agro Lestari Ltd. that discloses the potential litigation. For the aspect of environmental pollution prevention and other aspects, the average companies disclose in general. In Indonesia, there are three companies that do not disclose environmental accounting, namely PT Pakuwon Jati Ltd., PT Charoen Pokphand Indonesia Ltd., and PT Siloam International Hospitals Ltd.
In Malaysia, all companies disclose environmental accounting. The average items are only disclosed in general with an average total score of nine. For the aspects of accounting, financial factor and litigation, none of the companies discloses in the annual report. For the aspects of environmental pollution prevention and other aspects, the average companies disclose in general.
In Singapore, the average items are only disclosed in general with an average total score of five. For the aspects of accounting, financial factors and litigation, none of the companies discloses in the annual report. There are only two companies that disclose how the environmental pollution prevention has been done, namely Ascendas Real Estate Investment Trust Ltd. and Sembcorp Marine Ltd. For other aspects, the average companies disclose in general.
In Thailand, the average items are only disclosed in general, with an average total score of ten. For the aspects of accounting and financial factors, it is only one company that discloses specifically either in monetary or quantitative terms, namely Bangchak Petroleum PCL. Meanwhile, other companies do not disclose the aspects of accounting and financial factor in the annual report. For the litigation aspect, no issuer discloses any potential litigation. For the aspect of environmental pollution prevention and other aspects, the average companies disclose in general.
In the Philippines, the average items are only disclosed in general, with an average total score of five. For the aspect of accounting, financial factors and litigation, none of the companies discloses in the annual report. There are only four companies that disclose how environmental pollution prevention has been done, namely Ayala Land Inc., SM Prime Holdings Inc., Universal Robina Corp., Energy Development Corp., and Semirara Mining and Power Corp. For other aspects, the average companies disclose in general.
Furthermore, the difference in country-based environmental accounting disclosure scores occurs between Indonesia-Singapore and Indonesia-Philippines. The difference is quite far away. The score for Indonesia is thirteen points, while scores for Singapore and the Philippines are only five points, the lowest compared to other ASEAN countries.
In Singapore, the most crucial issues are air pollution and noise. The country has legislations and a complete department to deal with the environmental issues especially regarding air pollution and noise issues. While in the Philippines, the country has the most advanced legislation on environmental aspects compared to other ASEAN countries. To implement the Environmental Law, several departments have been established, such as the Department of Human Settlements, the National Environmental Protection Council, and the Philipine Coast Guard. However, with Singapore, the average environmental accounting disclosure score in the Philippines is only five, the lowest among other ASEAN countries.
However, seeing from the lowest position in environmental accounting disclosure scores compared to other ASEAN countries, the Philippines and Singapore need to have more stringent regulations and policies to require each company to present the environmental accounting disclosure in the annual report or sustainability report as a form of corporate legitimacy to the community.

The Difference in Industry-based Environmental Accounting Disclosure Scores
From the results of this research indicate that there is no significant difference in industry-based environmental accounting disclosure scores. These results are in contrast to the results of the tests conducted by Fekrat et al. (1996) andO. Gamble et al. (1996). Nevertheless, the results of this study are consistent with the results of tests conducted by Barbu (2011), Suttipun et al. (2012, Cho and Patten (2007), Wilmshurst andFrost (2000), andCormier et al. (2004).
Environmental accounting disclosure is a type of voluntary disclosure of environmental accounting information from the point of view of external environmental accounting functions. The average industries do not present the environmental accounting disclosure in detail, either from the aspects of accounting and financial factors, environmental litigation, environmental pollution prevention, or other aspects. This can be seen from the average percentage of disclosures that is still below fifty percent (see Table 4.4.). The disclosure is still in general and rarely displayed in monetary or quantitative form. This indicates that, in disclosing environmental accounting, the average companies simply present that they have conducted social activities related to the environment.
The results of the research stated above show that the average of each company still presents the environmental accounting disclosure voluntarily (see Table 11). There are even some companies that do not present the environmental accounting disclosure at all, although the environmental accounting disclosure is necessary, as one form of legitimacy between the company and the community. In the financial accounting standard (in Indonesia refers to PSAK), there needs to be a revision of the nature of the environmental accounting disclosure, from voluntary to mandatory, so that all companies from various types of industries seriously pay attention to environmental impact problems arising from their operational activities. Then, the environmental activities, ranging from the prevention, mitigation and discontinuation of environmental impacts that have been conducted by the companies, should be presented in detail and clearly in the environmental accounting disclosure.

CONCLUSION, IMPLICATION, SUGGES-TION, AND LIMITATIONS
The results of this study can be concluded as follows: First, there is a difference in the country-based environmental accounting disclosure scores. The difference occurs between Indonesia and Singapore and between Indonesia and the Philippines. These results indicate that there is still no alignment related to the environmental impacts caused by the operational activities of the companies in ASEAN countries. Second, there is no significant difference in the industry-based environmental accounting disclosure scores, as well as when viewed from each ASEAN country. Nevertheless, most industries do not present the environmental accounting disclosure in detail in terms of accounting and financial factors, environmental litigation, environmental pollution prevention, and other aspects. They merely show that the companies have engaged in social activities related to the environment.
The results of this study indicate that each country needs to have more stringent regulations and policies to obligate each company to present the environmental accounting disclosure in the annual report or sustainability report as a form of corporate legitimacy to the community. Such regulations and policies need to be accompanied by strict rewards and punishments so that each company provides clear and detailed environmental accounting disclosure.
Within the financial accounting standards there should be a revision of the nature of environmental accounting disclosure, from voluntary to mandatory. It is intended that every company of various types of industries really pay attention to environmental impact problems arising from its operational activities. Then, the environmental activities, ranging from the prevention, reduction to discontinuation of environmental impacts that have been conducted by the company, are presented in detail and clearly in the environmental accounting disclosure.
This research is expected to contribute to further research on the environmental accounting disclosure in ASEAN countries. The conclusion of this research is also expected to contribute to awaken the organizations and companies on the importance of environmental aspect because it is in direct contact with the interests of the stakeholders. The advantage of this research is that there is still research that takes the object of ASEAN countries based on the country and industry aspect. The weakness of this research is the uneven sample of industries in each country due to the limited research data.
It is suggested that further researchers and academics develop this research by involving not only the ASEAN countries but also other countries that often work together on environmental issues, such as Japan and the United States. Further researchers are also expected to measure the financial performance from various aspects such as Return on Assets (ROA), earnings per share, net profit margin, dividend per share, and firm size. In addition to examining the effect of financial performance on the total score of overall environmental accounting disclosure, further researchers can also test the influence existing in each ASEAN country.