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Environmentalreporting has received increased a attention all over the world during the pastcouple of decades, because the business entities have a responsibility tocomply with the environment in which it operates and the society has the rightto demand information of social resources. The recent incidents like meethotamulla,rathupaswala water crisis has drawn the attention of the need on environmentalreporting for a developing country like Sri Lanka. Since environmentalreporting is largely voluntary and unregulated, there is no proper reporting frameworkto adapt by the companies and therefore the decision usefulness of thedisclosures are doubtful.

Asa response to the mounting public pressure for the companies to be accountablefor their environmental performance, the firms have increased the volume andscope of their environmental reports (Marquis & Toffel, 2014). Neverthelessthe number of environmental reports produced appears to have increased without theregard to the users’ needs (Laud & Schepers, 2009). However it did notsatisfy the stakeholders demand for environmental information adequately andthe stakeholders have not influenced the content in the reports to match theirneeds, an approach that has damaged the perceived relevance of the reports(Marquis  & Toffel, 2014).

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Basedon the existing literature only a few studies have conducted to identify the users’information needs. European Commission, (2011) studies that employquestionnaires to determine users’ need, it has found that financial stakeholdersdo not read or even need environmental reports. In spite of this, studies thatused experimental methodology have identified that financial stakeholders douse environmental information when making investment decisions when theinformation is provided, confirming that they actually need such information (Rikhardsson & Holm, 2005). De Villiers and Van Staden (2010b) investigatedthe preferences of individual shareholders and found that 97 per cent of therespondents required companies to provide a description of their majorenvironmental risks and impacts, where 94 per cent required the disclosure of acompany’s environmental policy, while 81 per cent required a disclosure ofactual performance against environmental targets.

Furthermore, 80 per centrequires disclosure of environmental costs by category, 78 per cent required adisclosure of measurable targets based on environmental policy, whilst 75 percent required an independent audit of environmental disclosures. Further, itwas also noted that there is a dearth of studies have done to identify the users’information preferences on environmental reporting in local context. Thus, thisstudy attempts to contribute to the extant local literature to fill the gapobserved. 

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