Constructing an index for comparing human resources management sustainability in Europe

Assuming that a company's institutional context influences its sustainability approach and its human resources management (HRM), this article compares firms' sustainable HRM systems across countries. Despite the presence of a supranational government, different social models exist in Europe according to the level of social protection in each country. The article compares the engagement of companies with sustainable HRM across Europe and develops an index with which to compare HRM sustainability in countries that present significant institutional differences: Germany, Spain, Sweden, and the United Kingdom. The index is constructed based on a formative measurement model, which reflects the implementation levels of sustainable HRM in 106 western European firms. The index reveals significant differences between companies from the four countries and between liberal and coordinated market economies, indicating the need to address the impact of the national institutional context on firms' HRM sustainability.     

Beyond strategic human resource management: is sustainable human resource management the next approach?

Strategic human resource management (SHRM) emerged as a dominant approach to human resource management (HRM) policy during the past 30 years. However, during the last decade, a new approach to HRM has evolved. This approach has been labelled sustainable human resource management (sustainable HRM). It is an approach that seeks to link HRM and sustainability. The term sustainability is fraught with semantic difficulties, as is conceptualising its relationship to HRM. Consequently, sustainable HRM is viewed in a variety of ways. This paper examines the major features of SHRM, some of the meanings given to sustainability and the relationship between sustainability and HRM. It then outlines the major characteristics of sustainable HRM. Although there are a diversity of views about sustainable HRM, this approach has a number of features which differentiate it from SHRM. It acknowledges organisational outcomes, which are broader than financial outcomes. All the writings emphasise the importance of human and social outcomes. In addition, it explicitly identifies the negative as well as the positive effects of HRM on a variety of stakeholders; it pays further attention to the processes associated with the implementation of HRM policies and acknowledges the tensions in reconciling competing organisational requirements. Such an approach takes an explicit moral position about the desired outcomes of organisational practices in the short term and the long term. Sustainable HRM can be understood in terms of a number of complimentary frameworks.     

Circular economy in corporate sustainability reporting: A review of organisational approaches

A growing commitment from companies to implement circular economy (CE) strategies demands the development of guidelines for consistent related external communication. The fields of non-financial reporting and sustainability are well established with numerous available international reporting frameworks and approaches; however, there is still an absence of standardised reporting principles and procedures for publishing progress on circularity. In this context, this article aims to explore how companies could include CE within their corporate sustainability reports, through an academic literature review and content analysis of existent reporting approaches. Results showed a clear disconnection between CE and sustainability reporting literature. Overall, only a few of the revised reporting approaches explicitly mention CE, and the guidance given to companies is very general, inconsistent and places the responsibility of selecting performance assessment approaches on the companies. The analysis contributes to identifying opportunities for transparent external communication of CE issues, as well as exploring the challenges and limitations.     

Why Do Companies Not Produce Sustainability Reports?

Sustainability reporting emerged on the corporate scene nearly 30 years ago as a key mechanism through which business organisations would manage a transition to a new business landscape dominated by greater concern and consciousness about sustainability. While it has become something of a feature on the corporate agenda in some parts of the world, the majority of business organisations do not undertake this type of reporting. This paper explores why 23 of Australia's top 200 companies do not undertake sustainability reporting. The study is situated in the context of a considerable literature that promised numerous benefits to be derived from this type of reporting. The paper uncovers various social and organisational factors that raise some new questions about legitimacy theory, corporate accountability and the spread and uptake of this organisational practice. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.     

Determinants of the adoption of sustainability assurance statements: an international investigation

This paper explores the factors associated with voluntary decisions to assure social, environmental and sustainability reports. Since the market for assurance services in this area is in its formative stages, there is a limited understanding of the demand for this emergent non‐financial auditing practice, which is evolving rapidly across different countries. Drawing from extant literature in international auditing and environmental accounting, we focus on a set of country‐level institutional factors to explain the adoption of sustainability assurance statements among an international panel of 212 Fortune Global 250 companies for the years 1999, 2002 and 2005. Consistent with our expectations, our results provide evidence that companies operating in countries that are more stakeholder oriented and have a weaker governance enforcement regime are more likely to adopt a sustainability assurance statement. Further, the demand for assurance is higher in countries where sustainable corporate practices are better enabled by market and institutional mechanisms. Our exploratory findings also indicate that the likelihood of choosing a large accounting firm as assurance provider increases for companies domiciled in countries that are shareholder oriented and have a lower level of litigation. We conclude the paper by suggesting three directions of research in the area of sustainability assurance that have relevant academic and practical implications. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.     

Corporate social responsibility and sustainability reporting on the Internet

All material related to environmental and social performance on the corporate internet sites of 454 Fortune Global 500 and Fortune 1000 companies in 25 industrial sectors was analyzed using the Pacific Sustainability Index. Maximum scores for individual sectors were 20–75 percent of the total possible, highest in the largest and most environmentally sensitive sectors and ranging generally linearly, as shown by plotting score versus rank, down to nearly zero in every sector. None of the variation in score is explained by corporate revenue in the Asian and European firms in this sample (revenues greater than about $9 billion), but there is a very weak correlation between score and revenue for American firms of this size, and a stronger one when Fortune 1000 companies (all American) with revenues smaller than this are included, suggesting that, as corporate size reaches a certain threshold, sustainability reporting becomes independent of it. Copyright © 2009 John Wiley & Sons, Ltd and ERP Environment.     

Examining the extent of and determinants for sustainability assurance quality: The role of audit committees

This study examines the extent of and determinants for sustainability assurance quality. Data comprise sustainability assurance statements published by the top 100 listed companies in Australia and New Zealand from 2017 to 2019. The findings indicate that Australian companies lead their New Zealand counterparts in sustainability assurance. Although sustainability reporting has risen, assurance rates remain significantly low. Accountants dominate the market, and companies prefer to use their own auditors for sustainability assurance work. Sustainability assurance quality is poor and does not vary significantly among Australian and New Zealand companies. Low-quality sustainability assurance plays a limited role in mitigating potential stakeholder–agency conflicts. The regression analysis indicates that audit committee characteristics such as members' independence, industry/market expertise, and attending meetings enhance sustainability assurance quality, whereas audit committee size has no affect. These findings suggest that audit committee characteristics such as independence, industry expertise, and regular meeting attendance have the potential to reduce stakeholder–agency conflicts by improving the quality of sustainability statement assurance. Our findings build on the sustainability assurance literature by exploring current trends in sustainability assurance practices in Australia and New Zealand where corporate governance codes have been recently revised. Further, these findings are timely given recent changes in standards (International Standard on Assurance Engagements [ISAE] 3000 and Global Reporting Initiative [GRI]). Our study contributes to the audit committee literature and sheds light on the role played by audit committee characteristics on sustainability assurance statement quality. The study findings potentially offer useful insights for practitioners, standard setters, and regulators.     

Does adoption of ISO 56002-2019 and green innovation reporting enhance the firm sustainable development goal performance? An emerging paradigm

Reporting is a means of communication for companies to their respective stakeholders. The literature on non-financial reporting has mostly focused on operational, Carbon Discloser Project (CDP), and environmental disclosure to firm performance. This reporting and disclosure approach adopted by companies in their sustainability practices appears to be a normative approach. However, there has been a growing demand by stakeholders to incorporate proactive approach in business activities. To meet that, green innovation practices (GIPs) has been integrated as a new element in environmental reporting, thereby reflecting the proactiveness of companies in their adoption of green innovation reporting (GIR). The objective of this study is to advocate for greater disclosure on sustainability reporting by incorporating the GIPs of companies and substantial, sustainable development goal contribution, along with the moderation of the newly upgraded ISO 56002-2019 innovation management system. Adoption of green innovation reporting and ISO 56002-2019 will enhance the level of transparency of business activities and create greater stakeholder confidence along with enhancing the firm's sustainable development of goal performance. Furthermore, an extensive literature review was undertaken to create a GIR framework (i.e., product, process, service and technology) for firms to integrate GIPs into sustainability reporting. The conceptual model proposed the adoption of green innovation reporting and ISO 56002-2019 innovation management system to firm sustainable development goal. This needs to be injected into the sustainable reporting of companies to reflect their innovativeness, actual sustainable business practices and sustainable development goal performance for the firm.     

User needs in sustainability reporting: Perspectives of stakeholders in Ireland

Abstract

By means of a questionnaire survey, this paper ascertains and analyses the views of a number of Irish stakeholders regarding the adequacy and potential of corporate sustainability reporting to meet their information needs and help them hold corporations to account. The study focuses on ascertaining the views of a sample of Irish social and environmental non-governmental organisations (NGOs), who we argue constitute an important group of non-financial stakeholders. This emphasis on examining NGO perceptions represents an attempt to fill a gap in the academic sustainability reporting research literature whereby the views of non-managerial stakeholders are largely absent. The paper represents the second phase of a determined effort to examine the adequacy of sustainability reporting from the perspective of less economically powerful stakeholders in Ireland and responds specifically to O'Dwyer's (2002) call for research to examine the nature of stakeholder demand for sustainability reporting in Ireland in order to inform the future development of Irish sustainability reporting practices. The results present evidence of a widespread demand for mandated, externally verified sustainability reporting in either the annual report or a separate stand-alone report. This demand is primarily driven by a desire to gain knowledge of companies' commitment to responsible business practices but is also, albeit to a lesser extent, influenced by the perceived ability of sustainability reporting to facilitate increased NGO pressure on companies. Current sustainability reporting practice is viewed negatively with regard to its credibility and sufficiency, as well as the opportunities it provides for engagement with companies, particularly among environmental NGO respondents. While respondents tended to be suspicious of corporate motives for sustainability reporting, many were optimistic about the potential for NGO engagement with companies aimed at tackling social and environmental issues and improving current sustainability reporting practice. Drawing on the survey results, the paper makes some recommendations for future research aimed at improving sustainability reporting practices in Ireland and more broadly.     

Determinants of Traditional Sustainability Reporting Versus Integrated Reporting. An Institutionalist Approach

The aim of this study is to analyze similarities and differences between companies with traditional sustainability reporting (TSR) and those that publish integrated reports. Based on institutional theory we identify potential determinants of integrated reporting (IR) and test their relevance empirically in a sample of 309 companies. Our analysis shows that IR companies are different from TSR companies with regard to several country‐level determinants. In particular, investor and employment protection laws, the intensity of market coordination and ownership concentration, the level of economic, environmental and social development, the degree of national corporate responsibility and the value system of the country of origin proved to be relevant. Based on these results, both implications for practice and future studies are derived. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.     

The Influence of Governance Structure and Strategic Corporate Social Responsibility Toward Sustainability Reporting Quality

Increased business complexities coupled with enhanced global transformation have propelled corporations to behave as responsible citizens to drive the sustainability agenda. Many corporations incorporate their affirmative commitment to sustainable business practices into their corporate identities and give evidence for this in their sustainability reports. This paper examines the role of the board of directors in sustainability reporting quality (SRQ) in the Asia‐Pacific region. Based on a cross‐sectional study of 113 companies from 12 countries in the region, we find that the SRQ in the region leaves much room for improvement. However, we find that the institutionalization of the concept of corporate social responsibility (CSR) in an organization provides a sound foundation for enhancing SRQ. We find that the value of CSR anchored in the vision and/ or mission statement and strategic alliances fostered with non‐governmental organizations are positively associated with SRQ. This study contributes to strengthening the understanding, promoting discussion on the state of sustainability reporting in the Asia‐Pacific context and laying a solid foundation for more aggressive efforts to enhance SRQ. The study identifies the significant drivers currently associated with SRQ. The weak role of the board of directors in upholding the sustainable development agenda through the reporting process is highlighted. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.     

Sustainability,accountability and corporate governance: exploring multinationals' reporting practices

Recent years have seen a rapid increase in accountability pressures on particularly large global companies. The increased call for transparency comes from two different angles, which show some (potential) convergence in terms of topics and audiences: accountability requirements in the context of corporate governance, which expand to staff‐related, ethical aspects; and sustainability reporting that has broadened from environment only to social and financial issues. This article examines to what extent and how current sustainability reporting of Fortune Global 250 companies incorporates corporate governance aspects. Many multinationals, particularly in Europe and Japan, have started to pay attention to board supervision and structuring of sustainability responsibilities, to compliance, ethics and external verification. While detailed disclosures are not yet common, some notable practices can be found. Underlying dilemmas and complexities for managers in dealing with accountability to shareholders and stakeholders, and the role of auditors, are indicated. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment     

The role of human sustainability in professional service firms. Evidence from Italy

Sustainability is a central topic for an increasing number of companies, as a part of their business strategies. Human sustainability, that is, preserving and improving the quality of human life, in other words, maintaining and advancing human capital, appears as one relevant issue in that context. Humans and human capital are the foremost resources for professional service firms. Their role in the international economic scenario will most likely depend on how they deal with human sustainability and the wellbeing of their people. In this perspective, the paper investigates the antecedents, and organisational implications, of human sustainability in such firms using a structural equation model (SEM) developed on 4,301 questionnaires filled by Italian Chartered Accountants. Findings shed new lights on some implications of human sustainability. Results show that human sustainability has a direct and significative impact on a firm's ability to innovate, fostering creativity and intellectual capital, thus being significant for corporate performance. As a practical implication, firms should accordingly shape their business strategies towards accounting for human sustainability aspects.     

Corporate sustainability,ecological modernization and the policy process in the South African automotive industry

In the past decade, the plea for corporate sustainability has gathered momentum and protecting the environment is one aspect for organizations to address if they are to conduct business in a sustainable manner. In this paper, we present the results of a questionnaire survey on the state of corporate sustainability within the South African automotive industry. The survey focused on the meaning and relevance of sustainability to South African automotive companies, and their use of different approaches to implement sustainability in corporate practice. On this score, the paper seeks to analyze and compare the levels of voluntary environmental initiatives between large and small and medium‐sized enterprises within the automotive milieu. Survey results reveal that a majority of automotive companies have sought to improve their environmental performance by integrating environmental considerations into their core activities. Although the majority of these companies have standardized EMSs, our analysis reveals considerable differences between companies' approaches to corporate sustainability. In particular, they varied in the extent to which procedures were formalized and documented behind the corporate rhetoric of a high commitment to sustainability. The paper concludes by prescribing a number of recommendations as to how to engage and promote more widely the South African automobile manufacturing companies in environmental change. Copyright © 2009 John Wiley & Sons, Ltd and ERP Environment.     

The influence of feedback and awareness of consequences on the development of corporate sustainability action over time

The current level of corporate sustainability is insufficient for overcoming pressing environmental and social issues. Research is therefore needed about processes that lead to increased corporate action that fosters sustainable development. This study investigates the influence of feedback and corporate awareness of consequences on the development of corporate sustainability action over time. It uses action regulation theory to quantitatively analyse data of 59 large German companies measured at two points in time. The results reveal a positive temporal development of corporate sustainability action, and awareness of consequences positively mediates the relationship between corporate sustainability actions in two different time periods. Feedback acts as a moderator between the positive effect of corporate sustainability action in the first period on corporate awareness of consequences in the second period. Based on these findings, recommendations for organisations include the importance of seeking and processing feedback.     

Corporate social responsibility in china: an analysis of domestic and foreign retailers' sustainability dimensions

In the past decade, a sizeable body of literature has built up on the concept and characteristics of corporate social responsibility (CSR) in Western countries, where it has also been referred to as sustainability. More recently, attention has grown for CSR in emerging countries. Remarkably, China has hardly been studied so far. This paper aims to help fill this gap by considering, against this background, the CSR notion in China, through an exploration of a small sample of large retailers in China, both Chinese and non‐Chinese companies. The analysis of CSR/sustainability dimensions, as communicated by these large retailers in both the Chinese and the English language, shows substantial differences between the Chinese and international contexts. Interestingly, the largest divergence can be found for international retailers between their Chinese and corporate attention for CSR (so home versus host settings), most notably in the case of Carrefour, and to a lesser extent Wal‐Mart. In the Chinese context, there are differences between the Chinese and international retailers as well (so domestic versus foreign firms), with the former reporting more on economic dimensions, including philanthropy, and the latter more on product responsibility – contentious labour issues and the environment receive relatively limited attention in both groups in China. The paper concludes with a discussion of the implications for research and practice. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.     

Representative account or greenwashing? Voluntary sustainability reports in Australia's mining/metals and financial services industries

Why are more and more companies voluntarily issuing costly, potentially exposing standalone sustainability reports on environmentally and socially problematic issues? Using legitimacy theory, this study analyses ways companies seek to strategically enhance legitimacy by leaning towards either ‘representative’ reporting of both favourable and unfavourable information especially in an industry's highest impact domains, or ‘greenwashing’ (including whitewashing non-environmental issues), which downplays unfavourables and high-impact domains and highlights favourable but less relevant points. Content analysis compared Global Reporting Initiatives (GRI) reports from 2011 to 2019 by Australian financial services companies (107 reports) and mining and metals companies (122). Specifically, to critique reporting quality in fine grain, it disaggregated results into levels (from omission to full quantitative treatment) of disclosure of good/bad/neutral news indicators and violation-related/non-violation-related ones and identified highest impact domains. Neither industry's reporting was very representative. Relatively though, mining and metals leant towards representation: fuller disclosure on environmental aspects (its highest impact domain), including unfavourables: bad and violation-related indicators. Financial services companies only led in disclosing neutral social indicators, not bad or violation-related ones, so leant towards greenwashing. Results also suggest that after the GRI clarifying materiality principle in 2016, financial services disclosure quality dropped further by de-emphasising environmental without lifting social disclosures, while mining and metals' stayed unchanged. The results confirm and better specify widely indicated reporting weaknesses, contributing to content analysis methodology and legitimacy theory. This arms guideline setters, investors and other stakeholders to better evaluate/design reports and might encourage firms to voluntarily improve disclosures.     

Defining Eco‐efficiency: A Case Study on the Finnish Forest Industry

Environmental reporting is a tool of corporate environmental management that can also be used as research material. The aim of this paper is to produce a comprehensive definition of eco‐efficiency based on the literature and then compare it with definitions identified in the environmental reports published by selected companies. In addition, this paper presents a conceptual framework of the relationship between environmental and economic performance in the companies. Three Finnish companies in the forest industry are selected as case companies. This analysis reviews environmental reports published by the companies from 1998 to 2007. In short, eco‐efficiency can be seen either as an indicator of environmental performance, or as a business strategy for sustainable development. The case companies very seldom give an exact definition of eco‐efficiency in their environmental reports. However, different aspects of eco‐efficiency are often referred to. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.     

The dynamic nature of HRM implementation: a structuration perspective

Abstract

Over the past decades, scholars have dedicated substantial attention to the process of HRM implementation. Most progress has been made with debates on HRM system strength, roles of organisational actors in HRM implementation, and intended, actual and perceived HRM. In this paper, we challenge the current view on HRM implementation as being too static and one-directional. By building on structuration theory, we show that the process of HRM implementation is less straightforward than has been previously assumed. After their initial introduction, HRM practices evolve through turbulent developments. Furthermore, instead of neatly distributed roles following meticulously scheduled planning, HRM practices are influenced by various organisational actors. For successful implementation, HRM practices need to become inscribed into the interpretive schemes of organisational actors, resources have to be distributed, the HRM practice has to gain legitimacy. We develop a comprehensive framework that assists in understanding the process of HRM implementation.     

Explanatory Factors of Integrated Sustainability and Financial Reporting

The complexity of the business world has led to growing demands being made of companies regarding the information provided on their financial performance, corporate governance and contribution to developing sustainability. In response, some leading companies have begun to publish integrated reporting, in the form of a document providing a coherent summary of this information, thus facilitating stakeholder engagement. This paper examines the validity of the hypotheses of the theories of agency and of signalling, and analyses the political costs and those borne by owners in voluntarily developing this new type of business document. More specifically, in order to determine their prevalence among the suggested reasons for these paradigms, we analyse the effect of industry concentration, together with other factors, in the development of integrated reporting. The analysis of a non‐balanced sample of 1590 international companies for the years 2008–2010, in which a logistic regression methodology is applied to panel data, reveals the negative impact of industry concentration on the development of a more pluralist report, simultaneously taking into account stakeholders, sustainability and the long‐term viewpoint, as well as questions of responsible investment, business ethics and transparency. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment