Rhetoric Versus Real Commitment: Are Sustainability Issues Integrated in Business Model Disclosure? An Analysis of Extractive Industries in the UK

Abstract

Companies are paying more attention to corporate social responsibility (CSR) and social and environmental sustainability issues. However, skeptics question whether CSR is primarily motivated by the need to integrate sustainability issues in a company’s strategic objectives or rather to manage reputation and legitimacy concerns. A company that implemented a real commitment to sustainability in its way of operating should provide users with adequate information, concerning sustainability, in its BM disclosure. Our aim is to define a method capable of assessing whether and how a companies’ commitment to sustainability is reflected in its BM disclosure within the annual report. We present qualitative level scale to classify sustainability disclosure, from the lower level, which is labelled as “Rhetoric” and includes companies whose disclosure is not connected to company business model, to the highest level,“Monitoring”, where sustainability issues are fully integrated in a company’s competitive strategy and are included in its planning and control system. The “Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013” forced UK companies to include a description of their business model in their annual strategic report. Thus, after presenting our methodology, in order to assess sustainability disclosure in a case study we investigated a sample of listed UK companies operating in extractive industries.