The Effects of Negative Incidents in Sustainability Reporting on Investors’ Judgments–an Experimental Study of Third‐party Versus Self‐disclosure in the Realm of Sustainable Development

This study examines how the disclosure of negative sustainability‐related incidents affects the investment‐related judgments of decision‐makers. Participants in a sequential 2 × 2 between‐subjects experiment first received a company's financial information before viewing additional sustainability information (by the company and by a non‐governmental organization (NGO); with and without negative disclosure). Results indicate that self‐reporting of negative incidents does not affect decision‐makers’ stock price estimates and investment decisions compared with judgments based on financial information only. However, third‐party disclosure of these incidents by a NGO has a negative affect on these investment‐related judgments. Furthermore, the magnitude of the NGO reporting effect depends on whether the company itself simultaneously reports these incidents. Thus, disclosing negative incidents in sustainability reporting could lose some of its apparent stigma. Instead of avoiding negative reporting altogether, managers might use it as a risk mitigation tool in their reporting strategy. The results also emphasize the power of the often‐mentioned ‘watchdog’ function of NGOs acting as stakeholder advocates. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Sustainability reporting in Norway – an assessment of performance in the context of legal demands and socio‐political drivers

This article explores the influence of societal, political and regulatory characteristics and developments on the quality of corporate sustainability disclosures in Norway. The paper presents an assessment both of mandatory reporting under the Norwegian Accounting Act, and of voluntary reporting in annual and separate non‐financial reports, by the 100 largest firms in Norway. Our results reveal that only 10% of the companies comply with the legal requirements on environmental reporting, while only half of the firms comply with the legal reporting provisions on working environment and gender equality. The vast majority of firms also report unsatisfactorily on non‐financial issues in the voluntary disclosures assessed. Analysing the causes of these results, we contend that the situation is characterized by (1) an apparent lack of political and social drivers for sustainability reporting in Norway and (2) an absence of sufficient monitoring and enforcement of the environmental reporting legislation on the part of Norwegian authorities. Copyright © 2006 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     

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.     

Sustainability reporting quality and post‐audit financial reporting quality: Empirical evidence from the UK

This study examines whether firms that appear to exhibit high sustainability reporting quality are less likely to engage in earnings management activities, thereby delivering financial information that is more transparent and reliable than that delivered by firms that do not produce high‐quality sustainability reports. I also investigate whether the association between sustainability reporting quality and post‐audit financial reporting quality is conditional on audit effort. Analysis of data drawn from FTSE 350 companies covering 2007 to 2018 indicates that firms that produce high‐quality sustainability reports are significantly and negatively associated with earnings management metrics. More importantly, this association is moderated by audit effort, measured by audit fees, suggesting that sustainability reporting quality reflects factors considered by auditors in their audit risk assessment practices. These results remain robust after several sensitivity analyses. I conclude that firms that devote more resources to producing high‐quality sustainability reports are likely to demonstrate an overall commitment to quality that alleviates auditors' concerns about the opportunistic use of sustainability reporting and reduces business risk, thereby reducing the effort auditors expend to verify financial reports.     

The Financialization of Housing Production in Brussels

This article focuses on the financialization of housing production in the Brussels‐Capital Region, examining the increased presence and use of financial capital in housing production. Information collected by local administrations when granting building permits is used to undertake a large‐scale examination of companies involved in housing provision in Brussels in the 2000s in order to identify the origins of capital invested in housing development projects and to assess to what extent it can be considered as ‘financialized’. The use of this data set allows me to estimate the ‘market share’ of financial capital in housing production and to analyse the geography of these investments in the built environment. This spatial analysis also provides some insights for a discussion about the possible social consequences of this influx of financial capital into the urban space. The task of empirically ‘measuring’ financialization raises numerous methodological questions. A choice has to be made between a wide range of definitions, both for financial activities and the financialization process. Moreover, for the purpose of quantifying the phenomenon, these concepts are made operational and turned into indicators. In addition to providing information about the investment of financial capital in housing production and the concrete forms it may take in a city such as Brussels, I venture to suggest that this article also contributes to the methodological ‘toolbox’ available to researchers in the field of financialization.     

Reporting on sustainability and HRM: a comparative study of sustainability reporting practices by the world's largest companies

As a response to the growing public awareness on the importance of organisational contributions to sustainable development, there is an increased incentive for corporations to report on their sustainability activities. In parallel with this has been the development of ‘Sustainable HRM’ which embraces a growing body of practitioner and academic literature connecting the notions of corporate sustainability to HRM. The aim of this article is to analyse corporate sustainability reporting amongst the world's largest companies and to assess the HRM aspects of sustainability within these reports in comparison to environmental aspects of sustainable management and whether organisational attributes – principally country-of-origin – influences the reporting of such practices. A focus in this article is the extent to which the reporting of various aspects of sustainability may reflect dominant models of corporate governance in the country in which a company is headquartered. The findings suggest, first and against expectations, that the overall disclosure on HRM-related performance is not lower than that on environmental performance. Second, companies report more on their internal workforce compared to their external workforce. Finally, international differences, in particular those between companies headquartered in liberal market economies and coordinated market economies, are not as apparent as expected.     

Internet use for corporate environmental reporting: current challenges—technical benefits—practical guidance

The huge opportunities of using the internet for corporate reporting are arranged in a comprehensive system of technical benefits. In order to give a tangible example and describe practical use thoroughly, the benefits are focused on environmental reporting but they can be transferred in major parts also to financial, social or sustainability reporting—seen as a currently emerging trend towards integrated financial, environmental and social reporting. In more detail, the system of internet‐specific benefits is illustrated by four main categories: benefits concerning the underlying purposes of publishing reports, benefits concerning the entire reporting process, benefits concerning the report contents and benefits concerning the report design. In terms of corporate reporting, professional internet use will enhance the way in which companies give information, communicate and manage their business internally and externally, benefiting all members involved that are reporting companies, addressed key target groups and other stakeholders such as standard setting institutions and benchmarking organizations. Copyright © 2002 John Wiley & Sons, Ltd. and ERP Environment     

The end of the corporate environmental report? Or the advent of cybernetic sustainability reporting and communication

It is becoming clear that communicating effectively with stakeholders on progress towards economic prosperity, environmental quality and social justice i.e. the triple bottom line, will become a defining characteristic of corporate responsibility in the 21st century (Elkington J. 1998. Cannibals with Forks: the Triple Bottom Line of 21st Century Business. New Society: Vancouver). However, most companies that currently use paper‐based and even web‐based communication vehicles for their corporate performance reports are not realizing the full potential value of these communications – either for themselves or for their stakeholders. This may be due in part to the fact that historically reports have not sufficiently engaged ‘direct stakeholders’, i.e. employees, customers, investors, suppliers and local communities. In this paper we review the recent history of environmental and social reporting and conclude that, whilst much progress has been made, significant challenges remain. Most notably these challenges include (i) the avoidance of engagement fatigue by stakeholders and opinion formers alike and (ii) the extension of triple‐bottom‐line principles from corporate headquarters into business unit operations. Conversely there is enormous potential for addressing these challenges and creating significant value for both corporations and their stakeholders through the development of truly interactive (cybernetic) corporate sustainability reports and communications delivered via the internet and other channels. We explore some of the implications of what we believe to be an inevitable transition in how these communications will be orchestrated. Copyright © 2001 John Wiley & Sons, Ltd and ERP Environment     

An analysis of Dow 30 global core indicator disclosures and environmental,social, and governance‐related ratings

We examine the extent to which US Dow 30 companies disclose the Global Core Indicators (GCIs), which are measures to assess companies’ contribution toward the United Nation’s 2030 Agenda for Sustainable Development. We find that the Dow 30 are generally compliant with disclosing GCIs that align with US capital market reporting expectations, high‐profile current events, and issues that are financially relevant. We also find the Dow 30 are more likely to disclose institutional and economic issues, rather than environmental and social issues, and note disclosure variation across industries in which the Dow 30 operate. Supplemental analyses indicate that GCI disclosure levels are generally higher when those GCIs are associated with financially relevant ESG issues, suggesting companies are more amenable to addressing sustainability when doing so aligns with their mandate to shareholders. Correlation analyses reveal that the GCI indices moderately or strongly correlate with two of three MSCI sustainability ratings, highlighting companies’ focus on financially relevant areas, and weakly correlate with companies’ CDP climate change ratings, highlighting the limited scope of the GCIs in capturing detailed environmentally focused sustainability efforts. We also show that the MSCI sustainability ratings of the Dow 30 have generally trended higher over time, with increases driven by companies in the manufacturing, financial, and retail industries. Our findings help fill a void in sustainability literature on US company reporting of the GCIs and may be informative to the United Nations Conference on Trade and Development as it reviews the GCIs in support of the 2030 Agenda.     

Sustainability in The Banking Industry: A Strategic Multi‐Criterion Analysis

The current paper aims to develop an effective and integrated MCDM model for the evaluation of the sustainability practices in the banking services, employing a multi‐stage, fuzzy MCDM model that integrates the Balanced Scorecard, fuzzy AHP and fuzzy TOPSIS. The approach aims to evaluate sustainability from the following four perspectives: financial stability, customer relationship management, internal business process and environment‐friendly management system. A real implementation dealing with the six largest commercial banks in India is discussed. The results highlights the critical aspects of the evaluation criteria and the issues in improving sustainable banking performances. Regarding the sustainability issues, it is shown that the environment‐friendly management system takes a back seat compared with the other criteria. Furthermore, the results show that there is a misunderstanding of the role that corporate social responsibility plays with respect to environmental issues. The developed evaluation model offers a valuable management tool for banks' administrators by assisting them in strategic choices in order to achieve their objective of sustainability and sustainable banking. Moreover, it offers a measuring tool with unique features that complements the emerging trend of integrated reporting considering uncertainty. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Enhancing Corporate Environmental Performance Through Reporting and Roadmaps

Managing the carbon footprint of companies and addressing their respective decarbonization plans is a challenging endeavour. The aim of this study is to help companies better understand the issues around decarbonization and environmental performance by suggesting a holistic management process on which they could embark. This process comprises two crucial steps, which are (a) sustainability reporting and (b) low‐carbon roadmaps. These steps are covered and further developed based on a detailed study of the UK food retail sector. This sector is relevant due to its economic and environmental importance, but most importantly it has a significant record of available environmental reports in the public domain and a large potential to influence consumers, policy makers and multiple supply chains. Sustainability reporting is assessed by analysing environmental KPIs disclosed in corporate social responsibility (CSR) reports, and then these are compared against industry standards. This analysis highlights a general lack of consistency and transparency in CSR reporting of UK food retailers. Consequently, a low‐carbon roadmap based on relevant KPIs and on the ‘backcasting’ framework is presented as a case study in order to showcase how a hypothetical UK food retailer can employ a low‐carbon roadmap. The case study demonstrates that ambitious environmental targets are achievable if robust corporate action plans are followed. Furthermore, the case study indicates that capital might be misallocated in favour of highly visible environmental stores and on‐site energy generation technologies, whilst more could be done by applying energy efficiency measures that have the potential to deliver substantial carbon savings. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.     

Focus and Standardization of Sustainability Reporting – A Comparative Study of the United Kingdom and Finland

Sustainability reporting has attracted significant attention from the business as well as the academic community in recent years. Not only has the latter frequently made recommendations on reporting, it has also extensively examined factors that have an influence on reporting. Several studies have noted differences in the extent and style of reporting across countries, but the influence of specific cultural and socio‐economic environments on reporting has only been given limited consideration so far. It is the goal of this paper to help fill this gap. For this purpose, we examine the sustainability reporting of the 100 largest companies in the United Kingdom and Finland, as both are highly developed countries in North‐Western Europe, but with significantly different cultural and socio‐economic systems. Aside from the extent of reporting and media used, we examine the reporting standards and guidelines applied. Moreover, the focus of disclosure (economic, social or environmental) was investigated, which also brings a new perspective to the academic literature. Our results suggest that the cultural and socio‐economic environment has an impact on the extent of reporting, but with regard to the focus of reporting and the application of standards the results are mixed. A stronger shareholder oriented culture does not lead to a more extensive inclusion of economic issues in sustainability reporting, while the extent of environmental reporting depends on the strength of environmentalism. The impact of cultural and socio‐economic factors on the application of standards, such as the Global Reporting Initiative, appears to be limited. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.     

Inclusive purchasing and supply chain resilience capabilities: Lessons for social sustainability

In the face of unexpected changes in their dynamic business environment, purchasing and supply chain (SC) managers have been challenged to boost SC resilience while maintaining their sustainability concerns. In this changing environment, this paper aims to explore: (1) how (social) sustainability affects SC resilience and (2) what the role of purchasing is for SC resilience. Through a dynamic capability view as the theoretical lens, we investigate whether and how an inclusive purchasing programme could enhance SC resilience capabilities to cope with the Covid-19 outbreak. We developed a Case study with various SC members of a multinational cosmetics company that, despite suffering from a sudden demand disruption during the outbreak, maintained its sustainability actions. The results show that four operational SC resilience capabilities were amplified: ‘visibility’, ‘adaptability’, ‘collaboration’ and ‘financial strength’. In addition, a new capability entitled ‘empowerment’ was mobilised during this period. These factors helped the inclusive purchasing maintenance and were essential to supporting social sustainability. In addition, our results show that sustainable PSM, which is overlooked in the literature, is key for SC resilience. This article contributes to theory and practice because it demonstrates the role and relevance of (inclusive) purchasing in a company's ability to cope with SC disruptions, such as those resulting from the outbreak.     

A comparative analysis of corporate reporting on ethical issues by UK and German chemical and pharmaceutical companies

This paper reports on a study of reporting on ethical issues in the corporate annual reports of the largest UK and German chemical and pharmaceutical companies between 1985 and 1995. The study is both comparative and longitudinal in nature, examining in detail how ethical reporting practices developed differently in two Western nations. Despite the similarity in industry affiliations of the companies in the two samples, the study found substantial differences in the nature and patterns of reporting both across time and between the two countries studied. In particular, German companies reported more information and that reporting ‘matured’ to its current level at an earlier date. The paper explores some of the factors which might be thought to have caused this diversity in reporting between the two countries including: industry initiatives; extent of regulations demanding ethical responsibility; and other social and political pressures.     

City-Regions and Social Reproduction: A ‘Place’ for Sustainable Development?

Recent studies have suggested a city-region’s competitiveness is based not only on production, but social reproduction. These issues as well as the policy measures adopted by many city-regions are frequently couched in a discourse of ‘sustainable development’. But as an analytical framework how well does the concept of sustainable development account for the dynamics of social reproduction and the sustainability of a city-region? This article examines the possible relationship between city-regions and sustainable development at a conceptual level. We argue that despite some excellent work on the concept of ‘just sustainability’, current constructions of sustainable development are inadequate to capture the broad array of social and economic issues found in the city-region. As a way forward we initiate a discussion between the sustainability literature and labor geography, and provide a case study of a hospital privatization process in Boston, USA, which has been framed by a politics of city-regionalism.     

Organizational sustainability identity: Constructing oneself as sustainable

In the literature, organizational sustainability identity tends to be treated as something that is ‘engineered’ within business organizations through control, reporting, target setting, strategic communication, and other instruments. Through a case study of a company mainly active within the recycling industry, an alternative understanding is given. A distinct organizational sustainability identity is, rather, a social construct based on perceptions of the core operations as “sustainable in themselves” and collaborative work with customers that is perceived as entailing sustainable solutions. Understood in this way, organizational sustainability identity has relatively little to do with formal controls such as codes, policies, reports used by management to position the company as sustainable. Rather, for organizational members, the process of constructing oneself as sustainable builds on convictions about the core operations and the possession of specific capabilities manifested in customer relations. The article adds to current literature through its constructivistic approach and through identifying underlying beliefs that condition the process of forming an organizational sustainability identity.     

Contesting Sustainability: ‘SMART Growth’ and the Redevelopment of Austin's Eastside

The compatibility between an agenda for sustainable urban development and the neoliberal economic restructuring of urban space has been observed within cities in developed countries across the globe. From providing economic support to local ‘green’ industries to creating bike lanes, municipalities develop sustainability strategies that are designed to boost their competitive advantage. Moreover, municipalities are responding to demands from popular social movements and national governments that seek to reconfigure societal relationships with the natural environment in cities. Cities are increasingly understood not as part of the ecological crisis but as part of the solution, or as places where alternative patterns of sustainable consumption and new socially and ecologically responsible industries can be developed. Over the last decade in Austin, environmental sustainability has become an uncontested paradigm that has progressively shaped the city's urban space and policy. Two competing conceptualizations of the environment, so‐called ‘environmental’ and ‘just’ sustainability groups, are explored in this article. I demonstrate how the notion of environmental sustainability has been selectively incorporated into the hegemonic vision of Austin's strategic growth plan. I argue that the dominance of this conceptualization is best understood by asking what counts as the ‘environment’ for environmentalists, and understanding the unstated assumptions about the environment shared by the business community and environmentalists.     

Cities within the City: Do‐It‐Yourself Urbanism and the Right to the City

In many cities around the world we are presently witnessing the growth of, and interest in, a range of micro‐spatial urban practices that are reshaping urban spaces. These practices include actions such as: guerrilla and community gardening; housing and retail cooperatives; flash mobbing and other shock tactics; social economies and bartering schemes; ‘empty spaces’ movements to occupy abandoned buildings for a range of purposes; subcultural practices like graffiti/street art, skateboarding and parkour; and more. This article asks: to what extent do such practices constitute a new form of urban politics that might give birth to a more just and democratic city? In answering this question, the article considers these so‐called ‘do‐it‐yourself urbanisms’ from the perspective of the ‘right to the city’. After critically assessing that concept, the article argues that in order for do‐it‐yourself urbanist practices to generate a wider politics of the city through the appropriation of urban space, they also need to assert new forms of authority in the city based on the equality of urban inhabitants. This claim is illustrated through an analysis of the do‐it‐yourself practices of Sydney‐based activist collective BUGA UP and the New York and Madrid Street Advertising Takeovers.     

The Effect of Country‐Level Investor Protection on the Voluntary Assurance of Sustainability Reports

Over the last several years, sustainable (or socially responsible) investing has experienced rapid growth around the world reflecting an increasing awareness by investors of social, environmental, ethical, and corporate governance issues. This heightened awareness among investors has resulted in a demand for sustainability reporting and a corresponding increase in demand for assurance of sustainability information to enhance its credibility. Using an investor‐based view, we examine the impact of country‐level investor protection on reporting companies’ voluntary sustainability assurance decisions. We find that both the decision to obtain voluntary sustainability report assurance and the decision to obtain higher quality assurance are more likely for firms domiciled in countries that have weaker investor protection. Our results indicate that managers in low investor protection countries use voluntary sustainability assurance as a substitute monitoring mechanism.