Responsible reporting
A process-based operational framework to standard sustainability reporting
(Arena, M. & Azzone, G.)
Ranking of Sustainability Reports: Results from a Comparison of Reports of Small and Medium-sized German Companies
(Gebauer, Jana & Hoffmann, Esther)
Reporting on environmental issues in annual financial statements
(Langford, Robert)
The Use of Key Performance Indicators in Environmental Statements from the Perspective of Corporate Responsible Communication
(Martikainen, Aino & Michelsen; Gerd & Herzig, Christian)
An Exploratory Study of Brazilian Businesses’ Website CSR Disclosures
(Martin, Daniel & Woodward, David G)
Intra-industry imitation in environmental reporting in electricity sector
(Moseñe, Jose Antonio; Moneva, Jose Mariano & Sanagustín, Maria Victoria)
Supply Chain Corporate Responsibility Reporting: An assessment of the extent of industry reporting of biodiversity issues in the supply chain
(Whatling, Derek & Hedges, Peter & Fermor, Philip)
Commitment, communication and measurement of corporate responsibility through reporting: A web and print-based analysis
(Godemann, Jasmin; Vigano, Federica; Marchello, Maria Paola; Michetti, Melania & Herzig, Christian)
CSR Communication through Corporate Reports and Web Pages: Hungarian Experience
(Pataki, György; Gaspar, Judit & Szanto, Richard)
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A process-based operational framework to standard sustainability reporting
(Arena, M. & Azzone, G.)
The paper is founded on the widespread idea that sustainability reports are an essential element for implementing proactive strategies towards the environment and the society, and, therefore, they can help companies to exploit economical benefits which can be associated to more sustainable choices (see, for instance Buhr, 2007; Adams & Zutshi, 2004; Azzone & Bertelè, 1994). At present, despite several international bodies promoted sustainability reporting and provided guidance about reporting processes, indicators, reporting principles, and so on, the extent to which sustainability reports fairly reflect companies' social performance and impact is still limited (see, for instance Milne & Gray 2007; O'Dwyer & Owen, 2005; Sinclair & Walton, 2003).
This paper tries to solve this problem designing a “general” process for identifying a standard set of key sustainability indicators (KSIs), for a group of companies within the same industry and in a given region, with the specific aim of helping customers to distinguish a social proactive company from the other ones.
First, the paper analyses the state of the art literature in the field, comparing different frameworks available to support companies in producing their sustainability report. Then, the paper presents the suggested approach, which derives the set of KSIs, starting from the existing international models, through a four stages process:
1. Competitive analysis;
2. Process and technology analysis;
3. Preliminary set of KSIs;
4. Cost/benefit analysis and choice of the set of KSIs.
Finally, the paper presents and discusses the application of the proposed approach to the Italian steel industry.
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Ranking of Sustainability Reports: Results from a Comparison of Reports of Small and Medium-sized German Companies
(Gebauer, Jana & Hoffmann, Esther)
Abstract
The paper presents method, criteria and results of a ranking of sustainability and CR reports of small and not so small German companies. The ranking – developed by IÖW and future – usually evaluates content and communicative quality of sustainability reports of the 150 largest German companies. In 2009, we additionally conduct a special ranking considering reports from smaller organizations (less than 5,000 employees or annual revenue less than 500 million EUR).
The ranking was started in 1994 as a ranking of environmental reports. Back then, it considered reports from any German company – no matter what size – and SMEs played a major role as pioneering reporters. Nowadays, sustainability reporters are mainly large companies and only few German SMEs are communicating their social, ecological, and economic performance to their wider interest groups. We therefore aim at promoting reporting among German SMEs by providing guidance on how and what to report – and on what “to do”, by supporting learning processes among and within the companies via report assessment, by giving prominence to ambitious reporters and good and best performance. This may result in a higher sustainability performance of German SMEs.
The ranking results will provide a comprehensive look at what the German Mittelstand reports on: CR perspective, strategies, aims, and priorities; stakeholder approach; measures and results. We will offer insights in strengths and weaknesses of SME reports in general and compare them with those of large companies. We will show differences between sectors as well as between very small and not so small companies.
Addressed topics:
- Responsible Accounting and Reporting
- SMEs & CR
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(3)
Reporting on environmental issues in annual financial statements
(Langford, Robert)
Abstract
The paper provides practical guidance for preparers and auditors of financial statements, directors of companies and users of annual reports all of whom have a role in measuring the progress of corporate governance in achieving sustainable development. It is based on a project supported by the Environment Agency and the Institute of Chartered Accountants in England and Wales.
The subject is addressed in three sections, dealing with reporting requirements, implications for directors, report preparers and users, and guidance for auditors. Key questions are followed by discursive text intended to inform and provide practical guidance. Supporting appendices refer to the principal EU directives and regulations, international accounting and auditing standards relevant to environmental issues. Examples from recent annual reports illustrate disclosures relating to the topics addressed in the paper, such as environmental impacts and key performance indicators.
The paper recognises the value of reporting on environmental issues in annual financial statements, including business reviews and narrative statements. It also emphasises the business benefit of integrating environmental issues with risk management, enhancing a company's profitability, reputation and relationships with employees and customers.
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The Use of Key Performance Indicators in Environmental Statements from the Perspective of Corporate Responsible Communication
(Martikainen, Aino & Michelsen; Gerd & Herzig, Christian)
Abstract
The 'Eco-Management and Audit Scheme' (EMAS) is a voluntary instrument to promote and make transparent continual improvements in the environmental performance of organisations. At present, the second revision of the EMAS regulation (1836/93/EEC) is prepared (COM (2008) 402/2). One of its main proposals addresses the enhancement of the quality of environmental performance communication through the definition of key performance indicators in six areas (energy, water, waste water, waste, emissions, and biodiversity). Apart from the use of absolute and relative indicators, companies are also requested to use other relevant indicators allowing for a year on year comparison to assess organisations' environmental performance and for comparison with sector, national or regional benchmarks as appropriate (COM(2008) 402/2).
The paper provides empirical evidence from a current study among EMAS registered organisations in Germany. The representative study analyses the use of key performance indicators in environmental statements which are, according to EMAS, specific kind of environmental reports (see also Ahsen et al. 2004). Building up on previous work by Langford (2008) the paper, firstly, derives communication criteria from selected frameworks, proposals and guidelines (IASB 2001, GRI 2006, IDW 2006, WBCSD and WRI 2006, UNCTD 2000). Secondly, using these criteria for corporate responsible communication a random sample of 330 environmental statements out of 1839 registered sites in Germany has been analysed. The results are currently being interpreted and expected to provide an answer to the question whether key performance indicators in environmental statements fulfil communication requirements of corporate responsible reporting. Moreover, the survey looks into the issues whether there is a correlation between the quality of corporate responsible reporting and (i) the experiences of companies with responsible reporting, (ii) the size of companies and (iii) the sector to which the companies belong to. Finally, the findings are expected to provide suggestions not only for further improvement of the quality of environmental statements but also for formulating policy recommendations with regard to the revision process of EMAS.
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An Exploratory Study of Brazilian Businesses’ Website CSR Disclosures
(Martin, Daniel & Woodward, David G)
Abstract
The paper provides an exploratory enquiry into Brazilian businesses' self presentations of their CSR activities via their website disclosures, through analysis of a sample of that country's most significant corporations. The enquiry is designed to build upon research previously conducted by such as Maignon and Ralston (2002), and against which the present endeavour's findings are compared. Additionally, variables such as industry membership are also examined to determine what effect these might potentially have upon disclosure levels, with possible reasons for the enquiry's findings being referenced against the academic literature.
The overall findings are that a general pattern of how companies report their CSR activities in Brazil may be identified, with some issues (such as community involvement), being relatively popular, whilst others (such as supplier concerns), rank less significantly. Specific areas such as community education, quality of life, responsibility to shareholders and the environment, seem to be the most mentioned issues amongst the sample companies. Additionally, Brazilian companies' presentations of their CSR activities appear strongly influenced by those of US MNCs operating in Brazil and hence 'imported' by their subsidiaries located in that country.
A legitimacy theory perspective would support the contention that those companies having a greater negative impact on 'society' would be more likely to attempt to justify such impact(s) through enhanced (probably) positive disclosure in order to legitimise their existence. Industries categorised through prior research as being engaged in business activities that have an adverse stakeholder effects are indeed established as exhibiting enhanced reporting characteristics vis-à-vis those industries generally considered more benign in their activities.
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Intra-industry imitation in environmental reporting in electricity sector
(Moseñe, Jose Antonio; Moneva, Jose Mariano & Sanagustín, Maria Victoria)
The corporate environmental performance has been measured in some papers through the level of disclosure of environmental reporting (Adams et al. 2007). Both academics and corporate throughout have observed that there is a significant relationship between the sectors with the greatest polluting potential and a high level of disclosure, showing a legitimacy approach of these companies (e.g. chemicals, electricity, oil and gas,…) (Moneva et al. 2000), (KPMG 2008)).
The aim of this paper is to observe the intra-industry differences to the environmental performance, considering the institutional approach. To do this, a content analysis is carried out from a methodological comparative and longitudinal perspective related to environmental reporting disclosures of the main Spanish electricity companies. More recent environmental and sustainability reports (2005-2007) of these companies have been analysed, checking the level of compliance with the Global Reporting Initiative (GRI) indicators and other relevant standards related to emissions, environmental expenses and investments, impacts on biodiversity, relations with the stakeholders, environmental management awards and level of verification.
Results show a positive evolution of the environmental reporting of these companies, but without significant differences between the amount and the quality of the information disclosed among them. An isomorphic process can be also checked by the level of compliance with GRI guidelines during these years in this sector.
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Supply Chain Corporate Responsibility Reporting: An assessment of the extent of industry reporting of biodiversity issues in the supply chain
(Whatling, Derek & Hedges, Peter & Fermor, Philip)
Industrial development has had a major role in creating the situation where bio-diverse materials and services essential for sustaining business are under threat. A major contributory factor to biodiversity decline comes from the cumulative impacts of extended supply chain business operations. There is an increasing call for companies to manage and report on the potential risks and opportunities that may effect sustainable production, corporate responsibility and reputation. However, impacts on biodiversity due to supply chain operations have not traditionally been given equal weighting with other environmental issues within Corporate Responsibility (CR) reporting. The situation is seeing little change despite widely publicised assessments of deteriorating natural resources designed to increase business and public awareness.
This paper investigates the extent of CR reporting in managing and publicising company biodiversity issues in their supply chains by reviewing a cross-sector sample of publicly available CR reports. The report contents were examined for suggestions of industrial sectorial trends in the level of biodiversity consideration. The reporting of environmental management system use within company supply chain management is assessed in the samples and is considered as a mechanism for responsible supplier partnership working.
Key Words: Corporate Responsibility; Biodiversity; Supply Chain; Environmental Management Systems.
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Commitment, communication and measurement of corporate responsibility through reporting: A web and print-based analysis
(Godemann, Jasmin; Vigano, Federica; Marchello, Maria Paola; Michetti, Melania & Herzig, Christian)
Abstract
Corporate responsibility reporting can be interpreted as a communication tool through which companies represent their own commitment on social and environmental issues (GRI, 2006; Signitzer and Prexl, 2008). Nowadays, the rapid evolution in the acknowledgement of “Corporate Responsibility” among organizations emphasizes the need for monitoring the corporate reporting outputs both at print-based (Kolk, 2004) and Internet-based level (Adams and Frost, 2006; Rikhardsson et al., 2002).
Print-based reporting, following the triple bottom line approach (Elkington, 1994, 1997), is a well known instrument whose characteristics are the completeness and the widespread use at country level (e.g. Capriotti and Moreno, 2007; Frost et al., 2005; Guimaraes-Costa and Pina e Cunha, 2008) and at sector level (e.g. Kolk, 2004). Corporate responsibility reporting via the Internet is, however, still in its early stage of diffusion but it is assuming more and more importance for companies (Adams and Frost, 2004; Capriotti and Moreno, 2007; Herzig and Godemann, 2009; Jungle Rating, 2007).
When considering the web-based information in comparison to the printed reports, Internet documents favor users in identifying the company inter-linkages and the complexity of its corporate responsibility activities and establishing a more interactive communication with stakeholders (Isenmann et al., 2007; Lymer 1999; SustainAbility and UNEP, 2002). In addition, Internet-based reporting meets the needs of skilled users in getting more detailed information and insights of corporate responsibility while specific stakeholders can rapidly reach selected information from a larger information data-base (Isenmann and Lenz, 2002). The two responsibility reporting typologies present both strengths and weaknesses and cannot be considered as equivalent but rather as complementary tools (Herzig and Godemann, 2009).
A German-Italian team is currently carrying out a research with a specific focus on the accessibility and content quality of corporate responsibility reporting within a sample of European banking groups. The aim of the research is three-folded: i) the test on the comprehensiveness of corporate responsibility reporting; ii) the effectiveness of an internet-supported approach; iii) the emerging trends and mainstreaming Corporate Responsibility (CR) approach in the financial sector as they are presented and declared in corporate responsibility reporting.
The current financial and economic crisis call for a deeper analysis of what particularly the financial sector is doing to demonstrate an authentic and concrete commitment towards their stakeholders: customers, citizens, enterprises and environment at large. The sensitiveness toward financial literacy, the realization of responsible marketing initiatives, the integration of social responsibility principles within the governance structure and the operational organization and practices are just a few examples of the possible aspects to be monitored in the financial sector (GRI, 2002, 2005).
The project has developed two specific check-list criteria – technical oriented and content oriented – to evaluate the capability of internet-based and print-based corporate responsibility reporting to provide stakeholders with the most relevant and strategic issues of responsible banking.
The two check lists were the guideline for an evaluation of the ten major banking groups in each of both countries, Italy and Germany. The content check list tests the companies’ profile by verifying the level of integration of banks’ responsibility initiatives into their core business (Viganò and Nicolai 2009, Marchello and Michetti, 2009). A comprehensive list of relevant CR aspects has been specified covering the areas of governance, products and services - commercial banking, asset management, investment banking - and stakeholders - employees, community, environment, suppliers (FORGE Group, 2000; GRI, 2006; SAM, 2007; Schmid-Schönbein, O., Braunschweig, A., and Oetterli G., 2002; Schmid-Schönbein O., and Braunschweig, A., 2000). First results on the assessment of the content criteria show a good coverage level for the traditional areas of the responsible reporting (employees, environment and suppliers) while areas strictly related to financial products and services (involving clients interests and social/environmental indirect impacts), show a lack of accountability efforts.
The technical check list aims to analyse to what extent Internet-specific advantages in information provision, accessibility, comprehensibility and dialogue compared to print-based reporting systems are used by companies to serve their stakeholders. First findings show that particular attention has been posed to easy access of environmental and social information and to basic approaches to improve the provision and comprehensibility of information. However, the companies still do not tap the full potential of the Internet. Multimedia information processing, customised reporting and timeliness still have high potential for improvement. Multiple communication possibilities offered by the internet remain completely unused.Even though the direction of responsible reporting is heading towards using the Internet, we argue that both reporting typologies analysed should be seen as complementary tools and not as substitutes.
Keywords: Responsibility reporting, banking sector, cross-national comparison
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CSR Communication through Corporate Reports and Web Pages: Hungarian Experience
(Pataki, György; Gaspar, Judit & Szanto, Richard)
Abstract
Communicating corporate social responsibility principles, initiatives, and activities has become a common practice of companies all around the world. Firms use different types of media to report their sustainability-related performance. Producing stand-alone environmental, social or sustainability reports is still a major way of communicating corporate performance, recently however web-based communication is spreading among corporations to communicate their CSR initiatives to their stakeholders. This paper discusses the Hungarian experiences of sustainability reporting. The study examines stand-alone reports as well as online CSR communication undertaken by the top 50 companies of Hungary. Published reports and websites of the firms were analyzed focusing on to which stakeholder groups they communicate, what type of CSR activities they report about and how they communicate through reports and on the internet (i.e. what format they use). A content analysis methodology was applied to the reports as well as the web pages of the companies under study. CSR activities were categorized in eight clusters, such as consumers, governance, environmentalism, philanthropy and sponsorship, health and safety, suppliers, human relations, and others. By a comprehensive analysis we can get an overall picture of the best CSR practices in Hungary and explore to what extent these themes are covered by the reports and the web sites. Findings indicate that CSR communication activities vary a lot across firms and while a growing number of companies produce some types of sustainability reports, only very few companies exploit fully the opportunities inherent in the online media. By this research, we would like to highlight the importance of CSR communication and explore the practice of Hungarian corporations. So far very few studies were carried out at the national level that might provide possibilities for international comparisons as well.
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