Corporate sustainability reporting: Linkage of corporate disclosure information and performance indicators

K.A.K Gnanaweera,N Kunori,Collins G Ntim

doi:10.1080/23311975.2018.1423872

Abstract

The research was designed to evaluate the determinants of corporate sustainability disclosure practices for 85 Japanese companies listed on Tokyo Stock Exchange (TSE) in the First Section, from 2008 to 2014. The study examined disclosure information from CSR and annual—integrated reports and corporate websites. The study’s objective is to measure corporate sustainability disclosure guidelines determination (CSDF rate) and the relationship between CSDF rate and corporate sustainability performance. The content analysis and regression analysis were conducted to examine the research objective. The results of content analysis indicate that listed firms on TSE disclose some extent on environmental, social and economic information but the level of disclosure is vary; CSDF indicator with maximum disclosure level attributed to “Total amount of greenhouse emissions” with 99% disclosing rate and the minimum is the “Index and Grades” with 0%. Moreover, the study finds mixed results conforming to correlation and regression analysis. Similar to some existing studies, sustainability disclosure level and sustainability performance indicators have no strong association. Because there is a weak positive significant linkage among CSDF rate and water consumption, firm’s size, and environmental conservation effort. Nevertheless, to be consistent with social values, ensuing the guidelines and the accuracy of the disclosure information are important for corporate sustainability reporting.

Highlights

Over the years in a devastating climate change, organizations insentiently recognized the importance of the social responsibility to conscientious responsible business to dominate in sustainable development
According to Porter and Kramer (2007), the significant improvement depicted in sustainability reporting because more than 64% of the multinational companies disclosed on corporate social responsibility (CSR) information as a separate report or combine with annual reports
The main objective of the study is to identify the relationship between CSR reporting guidelines of disclosure information and corporate sustainability performance indicators, in the process of recognizing sustainability values according to firms own economic, environmental, and social impacts

Summary

Introduction

Over the years in a devastating climate change, organizations (profit and non-profit) insentiently recognized the importance of the social responsibility to conscientious responsible business to dominate in sustainable development. According to the purpose of this study, following hypotheses were developed to evaluate the linkage between corporate sustainability disclosure guidelines determination (CSDF Rate) and corporate’s financial and non-financial performance: 3.1.1. According to MoE guidelines (2007), environmental accounting is an essential element to estimate the impact of CSR on financial performance and a tool for managing investments and costs related to environmental conservation effort for Japanese companies (Kokubu & Nashioka, 2008; Ministry of Economy, Trade and Industry, Japan, 2007). Sustainability performance indicators The study considers five corporate sustainability performance indicators as control variables (explanatory), (refer Table 1), that may influence sustainability disclosure guidelines’ percentage (CSDF Rate) i.e. CO2 contribution (GHG), Water Consumption (WC), Environmental conservation effort (EE), Logarithm of Total Assets (TA), and Return on Equity (ROE) The data for these variables are extracted from the CSR reports and integrated-annual reports.

20 TOPICS IN THE CORPORATE ENVIRONMENTAL DISCLOSURE FRAMEWORK

Findings

Conclusion