The Impact of Libyan Banks’ Level of Awareness of Environmental Accounting Standards According to GRI on Financial Disclosure Practices: A Field Study

Abstract

This study aimed to examine the effect of the level of awareness among Libyan commercial banks of environmental accounting concepts and the Global Reporting Initiative (GRI) standards on financial disclosure practices, as well as to identify the main obstacles limiting the implementation of environmental accounting and environmental disclosure in the Libyan banking sector. The study adopted a descriptive-analytical approach and conducted a field survey using a questionnaire administered to a purposive sample of 150 employees working in Libyan commercial banks whose responsibilities are related to accounting and financial disclosure. The study employed several statistical methods, including arithmetic means, standard deviations, the one-sample t-test, one-way analysis of variance (ANOVA), and multiple linear regression. The reliability coefficient of the questionnaire, measured using Cronbach’s Alpha, was 0.957, indicating a very high level of internal consistency.

The findings revealed several significant obstacles to the implementation of environmental accounting and disclosure, most notably the lack of advanced accounting information systems capable of supporting environmental disclosure, the high costs associated with applying the standards, weak coordination among relevant departments, and insufficient environmental data and information. Other obstacles included the absence of practical reporting models and implementation guidelines for GRI standards, the lack of clear regulatory and legislative requirements, and inadequate training and qualification programs. The multiple linear regression results showed a positive and statistically significant effect of banks’ knowledge of environmental accounting concepts and objectives, as well as senior management’s concern for the environmental impacts of banking activities, on financial disclosure practices. The coefficient of determination (R²) reached 0.730, indicating that the two independent variables explained approximately 73% of the variance in financial disclosure practices. The results also showed that senior management’s concern for environmental impacts was the relatively strongest influencing variable in the model. Accordingly, the study concluded that the level of Libyan banks’ awareness of environmental accounting standards in accordance with GRI has a statistically significant effect on financial disclosure practices.