Sustainability Reporting Quality of Peruvian Listed Companies and the Impact of Regulatory Requirements of Sustainability Disclosures

Cristian R Loza Adaui

doi:10.3390/su12031135

Abstract

Regulations establishing mandatory sustainability reporting practices are proliferating around the world. The empirical evidence comparing sustainability reporting quality (SRQ) in the context of mandatory and voluntary institutional frameworks does not show consensus. Similarly, this occurs with studies addressing the effects of regulatory shocks on SRQ. Moreover, empirical evidence addressing SRQ in Latin American countries is scarce. To fill this gap, this study aims to explore the consequences of introducing new regulatory requirements for sustainability disclosure on SRQ of Peruvian companies. To reach that goal, 81 sustainability disclosure documents published between 2014 and 2016 by 27 companies included in the S&P/BVL Peru General Index of Lima’s Stock Exchange were analyzed using qualitative content analysis methods and adopting a multidimensional approach for SRQ evaluation. The findings show a constant improvement of SRQ regardless of the introduction of the new regulatory requirements. Furthermore, after the entry into force of new sustainability reporting obligations, the number of companies providing third-party independent assurance of the information contained in their sustainability disclosure documents decreases, suggesting that for the Peruvian case, regulatory requirements tend to discourage companies to invest in the credibility of their sustainability disclosure documents, and promote a symbolic application of sustainability disclosure standards.

Highlights

Corporate social responsibility and corporate sustainability (CSR) have moved from the margins of academic discussion to the middle of media, corporate boards, and political agendas
In the absence of previous empirical evidence on sustainability reporting quality (SRQ) of Peruvian companies, this study adopts an exploratory approach employing qualitative content analysis methods to examine the effects of the introduction of regulatory requirements on sustainability reporting practices
The principal goal of this study was to explore the effects on sustainability reporting quality derived from the introduction of regulatory requirements for publication of sustainability reporting documents applicable to Peruvian listed companies

Summary

Introduction

Corporate social responsibility and corporate sustainability (CSR) have moved from the margins of academic discussion to the middle of media, corporate boards, and political agendas. In Latin America, this trend followed a particular development, partially because of the heterogeneity of the business sector in the different countries of the region, because diverse cultural traditions still influence businesses [1]. Two cultural traditions shaped the praxis of CSR in this country [22,23,24]. The pre-colonial cultures that included the practice of Andean reciprocity, and a religious relationship with nature, still influence many CSR practices related to environmental issues [23,25,26]. The heritage of the Catholic Church, and the role of the Catholic social tradition in shaping civil society and its philanthropic activity, influence business and society relationships [27]

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Conclusion