Evaluating the Level of Environmental Disclosure Oversight in Industrial Companies: Application to Misrata Iron and Steel Factory

Abstract

This study examines the effectiveness of environmental disclosure controls at the Iron and Steel Company by evaluating both internal management controls and the external controls conducted by the relevant authorities. The inquiry is motivated by the growing demand for accurate and transparent environmental information, amid persistently low compliance with disclosure requirements in Libya. Grounded in the hypothesis that effective internal and external controls enhance environmental disclosure and improve environmental performance, the study employed a questionnaire developed after an extensive literature review. Forty valid responses from financial department employees were analyzed using descriptive and quantitative methods, including means, standard deviations, and a T-test, with data processed through SPSS (version 27). The results revealed variation in respondents’ assessments of control mechanisms. Professional guidelines issued by official accounting bodies were viewed as most influential (73.8%). Certain departments also showed notable commitment to environmental and social responsibilities, indicating a positive managerial tendency toward integrating environmental considerations into strategic responsibilities. Statistical analysis showed a significant overall mean score of 52.20 for environmental disclosure control (T_c = 4.194, P = 0.000), with a relative importance of 62% and, the 95% confidence interval indicates that the true relative significance lies within the range of 56.21% to 67.8%.". Although a certain level of oversight exists, contributing to the improvement of environmental disclosure quality within the factory, some deficiencies remain in the supervisory roles of specific bodies, particularly in both internal and external auditing. The findings further underscore the need to develop clearer standards and regulations to ensure consistency in environmental disclosure across companies and to enhance credibility with relevant stakeholders. Consequently, the results support the study's primary hypothesis, confirming that environmental disclosure oversight-whether internal or external-exists within the Iron and Steel Company, ensuring compliance with environmental reporting requirements while promoting.