Annual Sustainability Reports Research Articles

A compass for sustainability? Semiconductors, rare earths and CSR: the case of onsemi

AbstractSemiconductors are a rampant ICT sector utilized in everyday life for electronic devices. This industry provides plentiful income to multinational corporations (MNCs) but has been put in the spotlight for its tremendous social, ecological, and political impact. The figures become dramatic in sub-Saharan Africa and developing countries, which have abundant resources but poor working conditions and abrupt environmental degradation. In this interplay, rare earths have become leading assets for companies and governments and are highly debated for their controversial nature; thereby, corporate social responsibility (CSR) and environmental practices turn pivotal. This work aims to connect the bountiful industrial sector of semiconductors with rare earths governance and CSR. To this end, this inquiry critically scrutinizes these three assets, analyzing the case study of onsemi as a business case and launching selected strategic and policy perspectives. This paper reviews these three concepts and conducts a content analysis on onsemi CSR Report and Annual Sustainability Report. The literature review emphasizes the increasing importance of these three topics within the mineral economics and sustainability research. The company analyzed produced cogent reports but supplementary information is needed to better understand its results within the semiconductors and extractive industry. This may help determining key achievements and areas for improvements in the private sector for REE sustainability, CSR and environment, social and governance (ESG) results and disclosure. The availability and governance of rare earths will determine decisive sustainability directions of utmost priority for geopolitical equilibria. The undertaken corporate and institutional strategies will lean toward dramatically diverse scenarios.

ZAKAT DISCLOSURE INDEX BY ISLAMIC BANKS AND DEVELOPMENT FINANCIAL INSTITUTIONS IN MALAYSIA

Paying zakat and disclosing it transparently to stakeholders is one of the ways to demonstrate the Islamic ethical value and accountability of Islamic finance institutions (IFIs). Nevertheless, comprehensive zakat information disclosure practices by Islamic banks (IBs) and Development Financial Institutions (DFIs) have received less attention. Therefore, this study was conducted to develop a comprehensive Zakat Disclosure Index (ZDI) for IBs and DFIs and measure the ZDI level of these institutions. Content analysis was performed through financial statements, annual reports, annual integrated reports and annual sustainability reports for four consecutive financial years from 2016 to 2019. The entire population of 16 IBs and 6 DFIs was selected. The ZDI was developed with two categories based on the liability of paying zakat. The scoring was divided into three groups: (i) mandatory financial information versus voluntary financial information versus mandatory non-financial information versus voluntary non-financial information; (ii) mandatory versus voluntary; and (iii) financial versus non-financial. The result showed that the overall disclosure level was at 60 percent, where mandatory disclosure was at 43 percent and voluntary disclosure was at 17 percent, while for financial and non-financial information, the scores were not much different at 25 percent to 33 percent. The study’s implication lies in establishing astandardised zakat index, enhancing comparability among reporting entities. Furthermore, the study holds importance for regulators as it aids in assessing the sufficiency of existing regulations and guidelines. It can guide regulatory actions to uphold the principles of maqasid shariah in reporting practices.

Green Banking for Environmental Management: A Sustainable Paradigm Shift

Abstract This study aims to determine the extent to which bankss (banks) in Indonesia implement green economy policies based on current regulations and how bank has played a role in implementing it in its banking activities. The urgency of this research is based on the worsening environmental conditions caused by climate change and extreme global warming. Financial Services Authority Regulation (FSAR) Number 51/POJK.03 of 2017 is deemed a rule that only regulates the course of green economy policies in financial institutions and has not specifically regulated green banking. This study employed qualitative methods with normative data collection using secondary data. This research’s results revealed that the banking activities carried out by Banks have complied with the applicable rules, as evidenced by the annual sustainability report. Nevertheless, the report issued by Banks has not been fully included in the financial reports requested by the FSA, thus it is a separate report from the financial reports required by the FSA and the report called sustainability report. It is considered that the green banking and SDG policies have not been implemented optimally since they are only in the form of an appeal, and there are no sanctions for violators. Therefore, they only have insignificant effect on environmental improvement.

The influence of financial performance and governance on non-financial performance disclosures

Research aims: This research aims to examine the influence of financial performance and corporate governance on non-financial performance, i.e., the disclosure of the sustainability report (SR).Design/Methodology/Approach: This research used a sample of 35 industrial companies listed on the IDX during 2017-2022 and prepared annual reports (AR) and SR. The total observation data was 210 companies. The data analysis technique employed multiple regression and hypothesis testing using the t-test, with a significance of 5%.Research findings: The research results demonstrated that governance, including the independent board of commissioners and audit committee, exerted a positive effect on SR disclosure. However, the board of directors, institutional share ownership, public share ownership, and ROA did not affect SR disclosure.Theoretical contribution/ Originality: Theoretically, this research contributes to the fact that the agency theory approach can be used to determine SR disclosure.Practitioner/Policy implication: By optimizing independent boards of commissioners and audit committees, companies can help companies supervise managers, thereby increasing SR disclosure.Research limitation/Implication: This research was limited to examining governance on the board of directors, independent board of commissioners, audit committee, and institutional and public share ownership. The authors have not tested other governance, such as managerial ownership and remuneration committees, so numerous additional factors remain that can impact SR disclosure.

Mechanisms similar to Payment for Environmental Services (PES) to promote socio-environmental development: An analysis based on the case of Alpargatas S/A

The objective of this work is to analyze the mechanisms of actions inspired by the approach of Payments for Environmental Services (PES) as a promotion for socio-environmental development by the private sector based on a case study of Alpargatas S/A. The research was carried out in the bibliographic and documentary modality. The document analysis of the data was for the years 2021 and 2022, when the company began to publish the Annual Sustainability Report as a transparency and governance strategy. For documental analysis of the management instruments, it was carried out in search of evidence of mechanisms similar to those of PES. Thus, under the lens of analysis from the social perspective, the company acts in the promotion of education, inclusion and income generation, considered by the organization as structural aspects of society. Under the lens of environmental analysis, it invests in the use of resources through reverse logistics, and in suppliers that are in accordance with the socio-environmental criteria of Alpargatas S/A, in the greenhouse gas emissions (GHGs), and energy reduction. The company's challenges consist of carbon retention or capture, seeking to offset emissions through the process of reverse logistics, carbon neutrality and carbon offsetting from reforestation in the Amazon. As far as water sources are concerned, there is no surface water abstraction. There is no water withdrawal in an area of water stress.

Racing With a Purpose: Sustainability in Formula E

This study examined the seasonal sustainability reporting of Formula E for its content, variation, and linearity. Formula E was chosen since it was built as a sustainable sport enterprise rather than one which integrated sustainability into existing operations and for the accessibility of its annual sustainability reports. Using an exploratory approach for content and variation, and the Green Waves of sport sustainability for linearity, eight seasons of sustainability reports from Formula E were collected and examined via content analysis. Findings revealed the major content areas for Formula E concerned event management, car design, and community engagement with these initiatives classified as internal or external efforts. Reports were inconsistent in their structure, language, scope, and focus. The Green Waves suggest that while some efforts progress, others may regress according to strategy or the initiative’s life cycle. Formula E is progressing overall in their sustainability efforts, but exemplifies the lack of an end point to sustainability efforts. It is suggested that better coordination could yield higher strategic success and recognition.

Extending corporate sustainability reporting indicators to projects’ sustainability

Measuring the sustainability performance of an organisation is a rather complex task. This study aims at analysing a broad number of performance indicators related to the economic, environmental, and social pillars of the Triple Bottom Line (TBL) framework and evaluates their applicability toward the development of a sustainable performance measurement system (SPMS) of projects. To this purpose, an analysis of the annual sustainability reports of the listed EURO STOXX Sustainability 40 companies was conducted, identifying the sustainability indicators incorporated in each individual report, and classifying them according to the three pillars of the TBL framework. The analysis of the reports yielded 67 economic indicators, 109 environmental, 130 social, and 38 additional ones, mainly combining the latter two categories, giving 344 unique indicators in total. The proposed system, based on empirical evidence, recommends that selected indicators for an SPMS for projects should relate to predefined subcategories. These are costs, efficiency, and shareholder return for the economic dimension; emissions, energy, paper, resource consumption, waste, and water for the environmental dimension; diversity & equality, ethical behaviour, external commitment, health & safety, training & development, and working conditions for the social dimension.

The Disclosure of Zakat by Islamic Banks (IBs) and Development Financial Institutions (DFIs) in Malaysia

As an Islamic finance institution, the transparent disclosure of zakat payment to stakeholders is one of the ways in which the organization demonstrates Islamic ethical value and accountability through business transaction. The effective, translucent, and timely reporting to the stakeholders (i.e., the public, regulators, investors, and others) is critical to the economic decision-making process as well as equitable distribution of resources to the society. Despite the various variations in zakat disclosure, less attention is given to the disclosure practices on zakat information by Islamic banks (IBs) and Development Financial Institutions (DFIs). Therefore, this study aims to examine firstly, the zakat disclosure requirements by regulations and then the zakat disclosure for all IBs and DFIs in Malaysia. This study adopted content analysis on the financial statement, annual report, annual integrated report, and annual sustainability report for the 2019 financial year. The whole population of 16 IBs and six DFIs were selected. This study found inconsistency in zakat disclosure of the different banks and other zakat-related practical issues in the descriptive analysis. The inconsistency varies from the method, rates, policy, and terminology used. Additionally, further embellishment on the non-financial information of zakat is also vital to demonstrate accountability to the general public.

An energy company's journey toward standardized sustainability reporting: addressing governance challenges

PurposeThis paper aims to provide a comprehensive examination of corporate sustainability reporting strategies, focusing on the rationale for adopting the Global Reporting Initiative (GRI) Standards, the challenges to be faced and the implications that can arise for accounting professionals, managers, policymakers and scholars alike.Design/methodology/approachThe single case study approach was followed. Qualitative content analysis and thematic analysis were used for an in-depth, contextual examination of Enel Green Power's sustainability reporting practices and the adoption of the GRI Standards. The documents analyzed include annual sustainability reports, integrated reports and press releases over the period ranging from 2018 to 2022.FindingsThe GRI Standards' adaptability, modular structure and emphasis on stakeholder involvement emerged as stimulating factors for Enel Green Power. GRI Standards allowed the company to benchmark its sustainability performance against competitors and identify areas for improvement. The company faced challenges during the implementation of the GRI Standards concerning data collection and management across global operations, stakeholder identification and engagement and alignment of sustainability reporting with corporate strategy. The company addressed these challenges by investing in robust data management systems, maintaining active communication with stakeholders and embedding sustainability into its corporate culture.Research limitations/implicationsThis research contributes to the academic literature on sustainability reporting and accounting, offers valuable insights for managers and professionals and informs policymakers about the potential benefits and challenges associated with the adoption of GRI Standards. The paper highlights the importance of aligning organizational strategies with global sustainability frameworks and fostering a culture of transparency and stakeholder engagement.Originality/valueThis work offers a novel contribution to the scholarly discourse on sustainability reporting standardization, shedding light on the governance challenges to be faced and providing potential solutions.

A race to net zero-early lessons from healthcare's decarbonization marathon.

Climate change poses a threat to healthcare systems; at the same time, healthcare systems contribute to a worsening climate. Climate-induced disasters are predicted to increase both the demand for healthcare services while also posing a threat to the integrity of healthcare systems' infrastructures and supply chains. Many healthcare organizations have taken initiatives to prepare for such disasters through implementing carbon emission-reduction practices and infrastructure reinforcement, through globally recognized frameworks and strategies known as Scopes 1, 2, and 3, and decarbonization. We explored the efforts of these early adopters to understand how they are thinking about and addressing climate change's impacts on healthcare. Through a process of reviewing the peer-reviewed literature, publicly available published documents, annual sustainability reports, conference presentations, and participation in a national decarbonization collaborative, we (1) provide a diverse set of examples showcasing the variety of ways healthcare systems are responding; (2) identify a set of emergent key themes to implementing decarbonization practices, such as the role of an organizational culture of iterative improvement and building systems of cross-organizational collaboration; and (3) synthesize the identifiable set of driving factors for long-term sustainability of these decarbonization efforts.

A Study on Key Issues by Major Industries through Criticality Assessment: From the GRI Perspective

In the past, companies focused on growth-oriented, or "shareholder capitalism" management, with the aim of maximizing profits, but through the 4th Industrial Revolution and the COVID-19 era, they are shifting to "stakeholder capitalism" that recognizes the protection and safety of human resources as a top priority. Companies select key issues through the interest and business impact of various stakeholders, which is called criticality evaluation. The importance evaluation in the annual sustainability report can be seen as a management strategy to increase corporate competitiveness by prioritizing key issues. This study selected the construction industry, transportation and warehouse industry, and manufacturing industry as representative industries, and extracted key issues in the criticality evaluation of 134 sustainability reports from five companies. Key keywords were selected from the GRI perspective through the extracted issues, and frequency analysis and weight analysis by industry were conducted. In the construction industry, "customers" of product responsibility and "eco-friendly" of the environment were high in frequency analysis. In the transportation and warehouse industries, the frequency of "Employment" of labor and "social" of society was high. In the manufacturing industry, "products" of product responsibility and "partner company" of society showed high frequency. As a result of the weight analysis, the environment was the highest in all three industries, with the construction industry having the highest "economy," the transportation warehouse industry having the highest "society," and the manufacturing industry having the highest "product." Through this, it was confirmed that the characteristics of each industry and the analysis results were consistent. Through this study, it will be basic academic and practical data by recognizing the importance of criticality evaluation in terms of corporate management strategies, identifying key issues of various stakeholders and business impact, and comparing them by industry.

The Impact of Corporate Social Responsibility and Environmental Performance to Improve Return on Asset in Manufacturing Company

In Indonesia there are so many companies in manufacturing sector that do not process hazardous toxic waste (B3) properly, so that environmental pollution continues to occur. The Ministry of Industry and the Ministry of Environment and Forestry are targeting to reduce waste by up to 70%, and create a green industry. To support this target, the Ministry of Industry introduced a circular economy with 5 main principles, namely, reduce, reuse, recycle, recovery, and repair. These 5 principles already exist in the CSR (Corporate Social Responsibility) indicator which has been standardized by the GRI (Global Reporting Initiative) created by the GSSB (Global Sustainability Standards Board), so companies are obliged to apply them. This CSR will be shown in the company's annual Sustainability Report. There is an additional program to support environmental responsibility, namely PROPER (Company Performance Rating Program in Environmental Management). PROPER as an indicator that must be carried out by companies to manage production waste. Creating a green industry and a green environment will have a positive impact on the company, by increasing profitability. Company profitability can be measured by ROA, so that investors can see how the company manages assets to generate profit even though it incurs high costs to manage waste. The purpose of this study is to measure how significant the influence of CSR and environmental performance is on the profitability of manufacturing sector companies listed on the Indonesia Stock Exchange for the 2021 period.

Building a Green Industry Based on the Sustainable Development Goals (SDGs) Reports of State-Owned Banks

To achieve the Sustainable Development Goals (SDGs) in Indonesia, effort needs to be made by state-owned banks. This study aims to determine the extent to which stateowned banks can support the SDG based on disclosed state-owned banks’ annual sustainability reports. The research aims to identify, within the reports, 17 indicators of Sustainable Development Goals (SDGs) between 2018 and 2021. The study’s results show that state-owned banks have expressed support for the Sustainable Development Goals even though the 17 indicators have not been fully met.
 Keywords: Banking, Sustainable Development Goals (SDGs), Green Banking

A multi‐perspective exploration of the environmental website disclosure in global manufacturing

AbstractIn this work, more than 340 of the largest manufacturing companies from China, Europe, Japan, and the United States are analysed to measure the extent of their environmental website disclosure from multiple perspectives, to explore determining factors of disclosure and to investigate whether disclosure correlates to scores of environmental performance ratings. The study data set included more than 80 website observation items, data about downloadable annual sustainability reports, financial performance data and the environmental scores in the CDP Rating and the Refinitiv ESG Scores. Descriptive statistical analyses and correlation analyses were performed for the entire sample and for the regional subsets of the sample. One of the major results is that all regions show low levels of website disclosure. However, some variation in the extent of disclosure was found. The lowest level of disclosure was found for Chinese websites. Higher levels were observed for the companies from Europe, Japan and the United States. The analysis of the reports revealed that only one‐third of the sample companies from China but more than half of the companies from Europe, Japan and the United States supply recent reports. It was also found that integrated reports are less used in the United States, particularly when compared with companies from Europe and Japan. Insights also suggest that there is a weak to moderate correlation between one of the disclosure scores used and the Refinitiv ESG Scores. Further correlation analyses did not provide indications that company age and financial performance are to be considered determining factors of environmental website disclosure.

Creating shared value (CSV) and mutually beneficial relationships to address societal issues and develop corporate competitive advantage: A case study of Yuhan-Kimberly and an aging population

Through creating shared value (CSV) initiatives, companies have attempted to contribute to solving social problems that the public sector cannot address alone, such as migration, health, climate change, and job losses due to automation. Companies are also using CSV as business opportunities to develop their competitiveness. Only a few studies, however, have examined how organizations can develop and implement CSV programs, and the outcomes of those programs. We conducted a case study on how a multinational company, Yuhan-Kimberly, a joint venture of Kimberly-Clark and Yuhan, developed and implemented its CSV program, and created win-win, mutually beneficial impacts, in response to an increasingly aging society in Korea. South Korea is the world’s most rapidly aging society with the highest poverty and suicide rates among older adults. Yuhan-Kimberly’s CSV initiative includes fostering small-sized senior care businesses, creating jobs for older adults, changing the negative perception of older adults, and ultimately creating a market ecosystem for the older adult care industry. We used triangulation through company documents, including annual sustainability reports (N = 10), news reports (N = 623), company-conducted survey results (N = 80), and in-depth interviews (N = 14) with employees and members of other organizations and publics. The results reveal how the company developed and implemented a CSV program to cultivate mutually beneficial relationships and shared value for the company, older adults, other organizations, and society. The results indicate that CSV programs can be powerful relationship cultivation strategies to create mutual benefits both for society, by providing sustainable and feasible solutions, and for organizations, by enhancing their competitive advantages.

Analyzing and Visualizing Text Information in Corporate Sustainability Reports Using Natural Language Processing Methods

Sustainability is a major contemporary issue that affects everyone. Many companies now produce an annual sustainability report, mainly intended for their stakeholders and the public, enumerating their goals and degrees of achievement regarding sustainable development. Although sustainability reports are an important resource to understand a company’s sustainability strategies and practices, the difficulty of extracting key information from dozens or hundreds of pages with sustainability and business jargon has highlighted the need for metrics to effectively measure the content of such reports. Accordingly, many researchers have attempted to analyze the concepts and messages from sustainability reports using various natural language processing (NLP) methods. In this study, we propose a novel approach that overcomes the shortcomings of previous studies. Using the sentence similarity method and sentiment analysis, the study clearly shows thematic practices and trends, as well as a significant difference in the balance of positive and negative information in the reports across companies. The results of sentiment analysis prove that the new approach of this study is very useful. It confirms that companies actively use the sustainability report to improve their positive image when they experience a crisis. It confirms that companies actively use the sustainability report to improve their positive image when they experience a crisis. The inferences gained from this method will not only help companies produce better reports that can be utilized effectively, but also provide researchers with ideas for further research. In the concluding section, we summarize the implications of our approach and discuss limitations and future research areas.

Identifying the Best Practices in Hotel Green Supply Chain Management Strategy: A Global Study

ABSTRACT The aim of this study is to identify the best practices in hotel green supply chain management strategy by analyzing the practices of hotels from several regions. To this end, a comprehensive framework was developed to plug the gap in the literature. This framework was examined by studying a convenient and purposive sample of 47 hotels. Only top rated 4- and 5-star hotels were targeted. Data were collected from the GRI database by retrieving annual sustainability reports over the period 2017–2019. The best practices reported by this study were related to internal green process design, green quality management and internal commitment, green procurement of water/energy, and green customers’ relationship management. This is one of the rare studies that reports best practices at a global level by using a comprehensive framework developed for the purpose.

Socio environmental responsibility practices and organizational performance in public companies

Purpose: Analyze the relationship between socio-environmental responsibility practices in the economic and financial performance of companies listed in [B3].
 Methodology: Social and environmental information found in the annual sustainability reports published in accordance with the GRI 4 (Global Reporting Initiative) standard were used. For economic performance, the metrics EBITDA and ROA were considered, while for financial performance, market-to-book and Tobin's Q were used, collected on the Economática® platform. Binomial logistic regression was used to evaluate 220 observations corresponding to the period from 2014 to 2018.
 Results: It was not possible to verify the relationship between the disclosure of socio-environmental practices on economic performance, measured by the companies' accounting result variables. However, it suggests that there is a negative influence of the disclosure of information on socio-environmental practices on the financial performance measured by market variables.
 Study Contributions: Despite the demands made by the set of stakeholders on companies for the practice of socioenvironmental actions, the market does not favorably recognize the organizational effort. The results point to indications that investors may consider organizational investments in socioenvironmental practices as undesirable.

Sustainability in public organizations: a study in the Sustenta Paraná Network

Purpose - Evaluate the actions aimed at sustainability in the public sector from their stages of maturity in the context of institutions participating in the Sustenta Paraná Network. Methodology – We analyzed data collected through semi-structured interviews with managers responsible for creating and implementing sustainability projects in three public agencies participating in the Sustenta Paraná Network. Analyses also included information available on the official websites of the organizations, as well as documents from alignment meetings between institutions participating in the Rede Sustenta Paraná. The content analysis technique employed the software ATLAS.ti. Findings - The organizations demonstrated similarities, such as that internal motivation comes from management and those responsible for sustainability. All the organizations presented the need for extensive work to raise employee awareness. Besides that, were confirmed that the changes of public sector makes suppliers need to adapt, demonstrating their influence on their chain and market. However, they also presented significant differences, and each organization is at a distinct stage in the model studied. Originality - The contribution of this study is to expand and allow a better understanding of public organizations. Furthermore, two theoretical frameworks, typically used in the analysis of private organizations, were employed simultaneously. We suggest that public organizations systematize their sustainability information to make it available both to the internal and external public, such as an annual sustainability report with results achieved and ambitions.

Green Intellectual Capital on Value Relevance in Indonesia’s Manufacturing Companies

Objective - Corporate concern for the environment is an important stakeholder demand. A company is obliged to preserve the environment with various investments, one of which is green intellectual capital to maintain the sustainability of the company, especially for companies that carry out their business activities in countries that are in conditions of high pollution such as Indonesia. The importance of green intellectual capital investment information for stakeholders can be seen from the value relevance of the information. This study aims to examine and analyze the effect of investment in green intellectual capital, which consists of the following dimensions: human, structural, and relation to value relevance. Methodology/Technique – This study will explain the causal relationship between the independent and the dependent variables through hypothesis testing based on the theory that has been formulated with data that obtained and tested through quantitative panel data testing. Findings - The results of a survey of 515 samples of data from a population of 183 manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2015-2019 found that green intellectual capital with its three dimensions had a significant positive effect on value relevance. This study also proves that green structural intellectual capital has influenced more on value relevance than human and relation intellectual capital. Novelty - The measurement of variables is green intellectual capital and value relevance in this study develops previous research with related government conditions and regulations in Indonesia. Green intellectual capital investment is measured by using content analysis from disclosures in annual reports and sustainability reports, and value relevance is measured by the Olhson model with beta correction by the stock market in Indonesia. Type of Paper: Empirical. JEL Classification: G32, O34 Keywords: Green Intellectual Capital; Value relevance; Human Capital; Structural Capital, Relational Capital