Setting its own standards and meeting those standards: voluntarismversus regulation in environmental reporting

It is often asserted that a voluntary approach to environmental issues is preferable to regulation. Supporters of voluntary environmental reporting claim that businesses will produce reports that meet the requirements of their stakeholders without the need for government intervention. This argument is currently being deployed in the UK to oppose the setting of mandatory reporting requirements. This present paper considers the use of ‘stakeholder theory’ in support of the voluntary approach and evaluates the claim that businesses will choose to make adequate environmental disclosures. Alternatives to a voluntary regime are discussed.