Abstract
The financial services sector, particularly with respect to today’s banking industry, is aiming to make a digital transition. Sustainable reporting is a holistic new reporting approach in banking and has only become partially mandatory for the sector. Thus, this paper makes a contribution to the current analysis approach and further development of the German Sustainability Code as well as associated legal approaches. It concerns the assessment of mandatory sustainable reporting in the light of constantly changing market conditions and stricter legal requirements for stakeholder data responsibility. In specific, it focuses on a digital evolving business environment and is intended to provide an insight into the perception of the topic of digitalization in the banking sector. The assessment is based on the structure of the German Sustainability Code. Based on 113 bank reports, a multiple regression analysis of 1410 codings of the keyword ‘digital’ is carried out. The results show that banks partly and not fully address digital issues in their reporting. It transpires that the emphasis is on seven criteria, while social elements are totally ignored. The paper shows a structural inequality within sustainable bank reporting with regard to digitalization. It also shows that issues are not adequately addressed and covered in legal reporting standards and that the provision of information to stakeholders on specific issues is largely undefined.
Highlights
In recent years, sustainable reporting has expanded
It was directed to uncover whether all DNK standards are adequately taken into account within each report in order to illustrate the extent to which banks are currently addressing the issue of digitalization
As the banking market is changing and new business models and technologies are transforming the current market and disrupting existing business models, addressing the issue of digitalization is essential for stakeholders to keep them fully informed about the evolution and current situation
Summary
Sustainable reporting has expanded (on a voluntary basis). Many companies nowadays formulate annual sustainability reports, and there is a wide array of standards that determine content and validity. Sustainability reporting approaches can be seen as synonymous with other non-financial reporting terms, such as corporate social responsibility or triple bottom line reporting. Sustainable aspects are rarely based on financial information alone They consist of ‘an assessment of risks and opportunities using information on a wide variety of immediate and future issues’ (Global Reporting Initiative 2019). It ensures that companies consider important issues within their general responsibility. This reporting approach enables them to transfer information on risks and opportunities in the context of sustainability to the public. An overall increased transparency leads to a better understanding of business relationships, responsibility, and decision making, which helps to maintain and build trust in companies
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