The Role of Micro-Level Organizational Variables in Sustainability Reporting

Abstract

We investigate quality of sustainability reporting by developing a multi-level research design which incorporates variables that are proxies for general contextual factors, broad-based corporate characteristics, and micro-organizational level characteristics. Previous research has found that general contextual factors and broad-based corporate characteristics are important motivators of sustainability reporting. Although some attention has been given to micro-level organizational characteristics in sustainability performance research, little research has investigated their role in regard to reporting. We selected two micro-level characteristics within the organization that represent control at the highest level of governance, the board of directors, and control that should flow throughout all levels of the organization, the existence of an environmental management system (ISO 14001). ur findings support the validity of the multi-level model. Using a sample of companies that are required to report greenhouse gas emissions to a government agency as our sample, we found that including external influences, corporate characteristics, and micro-level organizational characteristics in our model adds to the explanatory power of our equation. All three levels motivate higher quality voluntary, sustainability reports. Given that there likely will be increased reporting of GHG emissions reductions, along with reporting of general sustainability information, throughout many countries of the world, these findings offer a contribution. As well, this research provides valuable information to the International Integrated Reporting Committee (IIRC) as to how organizational structure and control can support quality reporting.