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Turning to environmental expenses all annual reports

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Turning to environmental expenses, all annual reports included both qualitative andquantitative information except the annual report of 2012. An increase on total score indicatesthe improvement of the annual reports of Statoil over the given period.Finally, there were a slight increase on number of words from 2012 to 2014, while thetrend rose dramatically between 2015 and 2016.Overall, some similarities are observed in the diagram and the company develops itsannual reports over the given period. For instance, the lowest quality and quantity ofinformation is observed in 2012, while the annual reports in 2013 and 2014 indicate similardata. The annual reports provided all required information in 2015 and 2016, which areobserved with high scores. It is important to remember that while Statoil changed theiraccounting standards to IFRS in 2007 it may be a reason for the reports changing over theyears as they try to explore new techniques and styles.Similarly, the environmental impacts are mentioned particularly in the annual reportsof Statoil for 2015 and 2016. In 2015, the information related to environmental impactsoutlined the company’s approach, objectives and improvement statistics. However, the annualreport of Statoil for 2016 provided more information about these aspects as well as additionalfactors such as hazardous waste recovery, biodiversity and ecosystems. Furthermore, the2016 report focused on the way in which they minimised fresh water consumption andhighlighted hazardous waste recovery volumes. Most investors believe that bettermanagement of environmental effects improves the return or reduces the risk. According tothe observation, Statoil reduces its negative effects against the environment by using new
technologies. As mentioned before, greater emphasis is placed on reporting environmentaldisclosures and encouraged by many organizations but as no standards provide informationon how they should be reported, problems arise when comparing financial statements for thesame company as well as different companies in the same industry.Another crucial factor highlighted in this section was climate change which is a globalproblem in the world. In this section for the 2016 Annual Report, Statoil reaffirmed theirsupport to the Paris Climate Agreement to restrict the increase in global temperatures as aresult of carbon dioxide emissions. Also Statoil supports the ambition set to restrict theincreasing average global temperature. Statoil support the Paris Climate Agreement ofDecember 2015 and it develops the key aspects of climate change such as developing lowcarbon energy solutions, managing climate risks and opportunities etc. If we check thestatistical indicators, the company decreases the CO2emissions every year. Investors aremore concerned with CO2emissions from companies as they perceive it as a material risk. Assuch according to Andrew and Cortese (2011), over the past ten years accountants have beenmore involved in the disclosure of social and environmental information even though they arevoluntary disclosures. After Edition 1.1 of the Climate Change Reporting Framework, theInternational Accounting Standards Board’s standards included the climate change-relateddisclosure. Climate Change Reporting Framework focused on investors as the main users offinancial information, but at the same time this information is useful for other users, too. This

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Term
Fall
Professor
NoProfessor
Tags
Balance Sheet, Financial Ratio, International Financial Reporting Standards, Kyoto Protocol, Statoil, Chevron Corp

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