Voluntary Sustainability Disclosures in Non-Listed Companies: An Exploratory Study on Motives and Practices

Abstract

The aim of this study is to investigate the reasons for the voluntary preparation of a sustainability report and to identify sustainability disclosure practices in the context of non-listed companies. For this purpose, a multiple case study methodology involving five manufacturing Portuguese companies was employed. Data collection consisted of a mixed approach involving interviews with the sustainability report preparers, and content analysis of sustainability reports and company webpages. The results show two main reasons to initiating voluntary sustainability reporting: requirements from specific customers and the parent company, and the need to communicate with stakeholders, in particular customers, the local community, and suppliers. Companies reveal knowledge of sustainability-related concepts and apply frameworks such as GRI Standards and SDG in preparing their sustainability reports. Several departments are involved in preparing the sustainability report (sustainability, quality, environment, human resources, marketing, and/or communication departments), but no company mentioned the financial department. Moreover, on the webpages, sustainability reports and annual reports tend to be presented in separate sections, suggesting that companies still have a way to go in integrating sustainability information with financial information. Overall, the results show that institutional, stakeholder, legitimacy, and signaling theories can provide explanations for the motives and practices adopted by non-listed companies in voluntarily disclosing sustainability information.