O.J. Sanders works in the financial reporting section of a large U.S. pharmaceutical company. The company has recently committed to go green and O.J.s boss wants to add some environ- mental disclosures in the companys annual report. O.J. is charged with recommending the contents of the environmental disclosure. In his research, O.J. learns that U.S. companies have generally lagged European companies in environmental reporting, but that more and more U.S. companies are now disclosing environmental matters. He believes that his company should at least match the competition in the disclosures it makes. Toward that end,he obtains the annual report of Roche, a Swiss competitor. O.J. also learns about the G3 sustainability reporting guidelines of the Global Reporting Initiative.

1. Discuss why financial statement users find environmental disclosures informative.

2. Obtain the G3 sustainability reporting guidelines of the Global Reporting Initiative (GRI, www.globalreporting.org). List the environ- mental performance indicators that the GRI recommends for disclosure.