Sustainability reporting by companies: reasons and financial benefits

Abstract

Sustainable development is one of the most promising concepts for the future of the society. Companies are an important participant in numerous social processes, and their sustainability is integral to the sustainability of the society. During the last three decades the number of companies preparing sustainability reports has increased. A lot of stakeholders and regulators pay already attention to this type of reporting. At the same time, there is а growing scientific interest in this field. Even though in recent years the number of regulatory acts that mandate certain companies to disclose environmental and social information has increased, the sustainability reporting is still mostly voluntary. This article attempts at summarizing and analyzing the causes that motivate companies to prepare a sustainability report, by reviewing existing literature and completed studies. A total of 14 main reasons have been found. Some of them are external, others are internal to the companies. The reasons may be economic, mainly related to the willingness of companies to improve the competitiveness of the company, but also non-economic, related to the value system of a top member of management or an owner, and the willingness to do good. All the reasons have been subsequently analyzed through the lens of the companies’ competitiveness.