Environmental Audit Flashcards
What are 5 potential benefits
Company credibility
Improving transparency
Stakeholder demands
Avoiding negative campaigns
To adapt and comply with more stringent environmental regulations
Company credibility
o Audits provide credibility to what is being disclosed. The process of having claims and statements verified by an independent body (auditor) gives readers assurance that what they are reading is true and they do not have to be sceptical about it.
o Companies reputation will improve because readers and stakeholders have more confidence in the firm.
Improving transparency to the public
o Audits help provide transparency for stakeholders which in turn builds trust between the company and them which reaps a wide array of benefits internally and externally. These include increased employee morale and engagement, innovation improvements, better business relationships as well as potential for increased profits
o Environmental audits can help build trust with the public as they are able to legitimately see the practices that a company carries out. The audit provides assurance that what a company states they are doing, they are actually doing which in turn boosts consumer confidence and helps strengthen the relationship between the company and society, thus legitimising their operations.
Stakeholder Demands
o With the increasing demand for greater reporting and consideration that goes beyond financial profit, companies can use environmental audits as a tool to meet these stakeholder needs.
o As companies continue to implement more initiatives into their operations, there are greater chances for misreporting or greenwashing, therefore audits act as an assurance mechanism to help maintain strong relationships with stakeholders and dismiss suspected cases of greenwashing.
Avoiding negative campaigns
o Increasing external demands for environmental responsibility by pressure groups and environmental activists are forcing companies to check their compliance with environmental requirements. The increasing concern for the environment has made these demands more and more popular. If the company is not compliant, for example, they can campaign to boycott its products.
