Annual Sustainability Reports Research Articles

Better poison is the cure? Critically examining fossil fuel companies, climate change framing, and corporate sustainability reports

The way fossil fuel companies frame climate change in their annual sustainability reports shines light how the fossil fuel industry is addressing pressure from stockholders, investors, and the public to become less environmentally harmful. Through a qualitative frame analysis and critical discourse analysis of fossil fuel company sustainability reports, four major frames emerged: (1) techno-optimism, or, the belief that innovative technologies and fuels, without social change, can help solve the issue of climate change; (2) necessitarianism, or, the notion that the fossil fuel industry provides a necessary service; (3) compliance, or, adherence to established regulations and standards; and (4) countermeasures, or, strategies that indirectly counteract harms done. Two frames central to discourses surrounding fossil fuels and climate change are notably absent: (5) potential environmental and societal risks of fossil fuels (risk minimization) and (6) potential future scenarios that are significantly different from the growing economy powered by increased energy output (possibility blindness). Together, the frames are a subtle form of climate change denialism that acknowledges climate change as a problem without diagnosing the root cause of the problem (ideological denial), conceals environmentally harmful actions with the rhetoric of environmental friendliness (greenwashing), and justifies the status quo as necessary (reification).

Samarco’s scandal: a perspective of organizational spirituality and corporate social responsibility

PurposeSociety is asking for a humanized business strategy. In this paradigm-shifting, the first change is in companies’ discourses. This paper aims to analyze an organization’s discourse involved in a scandal (environmental crime) from the perspective of corporate social responsibility and organizational spirituality.Design/methodology/approachThis study conducted an interpretive qualitative study using discourse analysis encompassing Samarco, a joint venture between Vale S.A. and BHP Billiton. The collapse of the Fundão dam in Mariana, Minas Gerais, Brazil, caused the spillage of approximately 56 million cubic meters of iron ore and silica tailings, among other particles affecting 41 cities and three indigenous reserves degrading 240.88 hectares of Atlantic Forest, until reaching the Atlantic Ocean. This paper analyzed the company website and all public documents available, both before and after the crime, Code of Conduct (2014), Annual Sustainability Report (2014) and Actions Report (2016), Biennial Report (2015–2016 and 2018–2019) and the Transaction and Conduct Adjustment Term (2016). This study chose the data considering the series of judicial processes in course, environmental crime’s delicacy, and its consequences for Samarco employees, stakeholders, affected communities and families.FindingsThe spiritual elements underlined in organizational discourses are different from the corporate practice in their everyday interactions with their stakeholders. As a result, the organizations’ identity seems problematic. The company has failed to provide an environment that encourages spirituality.Originality/valueThis is the first article to analyze a company’s discourse involved in a scandal through the lenses of corporate social responsibility and organizational spirituality. It contributes to the research concerning irresponsible management and the rhetorical use of spirituality in management.

Pengaruh Koneksi Politik Dan Media Exposure Terhadap Pengungkapan Tanggung Jawab Sosial

This study aims to examine and analyze the influence of political connections and media exposure on disclosure of Corporate Social Responsibility (CSR). This research is a quantitative study using secondary data from annual reports and sustainability reports of 195 High Profile companies listed on the Indonesia Stock Exchange (IDX) in 2018-2019. This study uses the dependent variable in the form of CSR disclosure measured by the analytical method adopted from the research of Sembiring (2005). The independent variables in the form of political connections and media exposure are measured using dummy variables. The data analysis technique used is multiple linear regression analysis with SPSS software. The results of this study indicate that there is an influence of political connections and media exposure on disclosure of Corporate Social Responsibility (CSR).

Examining the effect of diversification, corporate governance and intellectual capital on sustainability performance

This study aims to examine and analyze the effect of diversification, corporate governance and intellectual capital on sustainability performance, either directly or indirectly, by involving financial performance as a mediating variable. This study uses secondary data on Islamic Commercial Banks in Indonesia which are registered with the Financial Services Authority from 2011 - 2018, with a sample size of 10 Islamic banks that meet the criteria using the purposive sampling method so that 80 observations are obtained. Data is obtained from annual reports, sustainability reports, and reports on the implementation of good corporate governance. The data analysis technique used SEM-PLS with the help of WarpPLS 7.0 software. The results of the study provide empirical evidence that both the quality and quantity of corporate governance, intellectual capital and financial performance have a positive effect on sustainability performance.

Online Sustainability Reporting and Firm Performance: Lessons Learned from Text Mining

As a corporate social responsibility (CSR) initiative, firms are increasingly disclosing sustainability indicators on online platforms to attract stakeholders’ interests. It is vital to understand what indicators reflect more on a firm’s performance and valuations. This study focuses on deriving value-oriented business intelligence from the voluntary disclosure of sustainability reports. The analysis in this study involves a three-stage approach: (1) Latent Dirichlet allocation (LDA) based topic modeling algorithm to identify and summarize typical contents expressed in various documents, (2) firm’s sustainability maturity modeled as a function of its strategic intent using a latent Markov model (LMM) to estimate the statistical significance and the extent of their relationships, and (3) empirical analysis using random effect linear and non-linear probit models to explore the impact of antecedents and firm performance consequences of three strategic intents. This study highlights using an advanced business analytics approach, specifically with latent Dirichlet allocation (LDA) topic modeling, to codify intangible knowledge embedded in annual sustainability reports to infer a firm’s strategic intent behind voluntary disclosure. In addition, this study aims to analyze the influence of the firm’s sustainability strategic intent on its financial performance. A secondary panel dataset consisting of information on 680 firms in 3 years was constructed by matching the text mined data with information from other sources. Results indicate that, on the one hand, while external stakeholder engagement is the primary motivation behind voluntary disclosure of sustainability reporting, firms are starting to engage internal stakeholders through workforce practices. On the other hand, internal employee-oriented intent has more influence on firm performance than external customer-oriented intent. This study demonstrates a toolset to index firms’ sustainability indicators and evaluates firms’ sustainability practice as an intangible asset and its impact on firms’ financial performance.

Determinants of environment, social and governance disclosures by top Malaysian companies

Using the resource-based view theory (RBVT) as the underlying theory, this study has aimed to determine the extent of environmental, social, and governance (ESG) disclosures and specifically, to identify the factors that influence the extent of ESG disclosures by Malaysian companies. An index which is known as the modified environmental, social, and governance index (MESGi) was developed to measure the extent of ESG disclosures in the annual reports and sustainability reports of the 67 top Malaysian public-listed companies for the year 2015. The study used hierarchical regression to analyse the relationships between firm internal factors and ESG disclosures. The findings indicated that the extent of ESG disclosures by Malaysian companies was low. The results found that the ISO certification and research and development expenditure had moderate significant relationships with the extent of ESG disclosures by Malaysian companies. The government and policy makers may consider enhancing the existing regulations by requiring the listed companies to provide more ESG disclosures to the stakeholders. It is hoped that the MESGi is able to assist the Malaysian Government to have a more comprehensive and standardised guideline in disclosing ESG information by Malaysian companies.

Governing sustainable finance: insights from Indonesia

ABSTRACT Transforming financial systems has been considered a promising avenue to ensure financial flows consistent with low carbon and climate resilient development. An important first step to do so has often been the development of sustainable finance roadmaps. Drawing on key stakeholder interviews in Indonesia in 2019–2020, this article examines how Indonesia’s sustainable finance roadmap has unfolded on the ground and investigates key challenges to its effective implementation. The study finds that there has been high procedural compliance by financial institutions through developing sustainable finance action plans and submitting annual sustainability reports to the financial regulator. However, there is considerable variation and inconsistency in interpreting what constitutes a ‘green’ project among financial institutions, enabling some financial institutions to engage in little more than tokenism. With the limited regulatory oversight currently provided, it is difficult to see how financial institutions might be incentivised to do more or how tangible sustainability outcomes can be achieved. This article proposes potential means of overcoming some of the blockages in implementing the roadmap, which include greater intervention to incentivise climate finance by Indonesia’s central bank. Key policy insights Indonesia’s sustainable finance roadmap is well underway in which most financial institutions have been compliant to sustainable finance regulations. However, with limited substantive regulatory oversight it is difficult to see tangible sustainable outcomes; Sustainable finance regulations and regulatory oversight needs to be improved through enhanced disclosure standards and risk management processes and incentives for compliance; Greater intervention by Indonesia’s central bank is needed to fast-track sustainable finance by stipulating green macro prudential regulations that incentivise or direct resources away from carbon intensive sector.

A systematic review of corporate carbon accounting and disclosure practices: Charting the path to carbon neutrality

The study examined the theoretical motivation for carbon disclosure and its adequacy for deliberate responsible action. Generally, there is an increase in corporate carbon disclosures in the business sector. Organizations are mostly disclosing their carbon emissions through annual reports, integrated reports, or stand-alone sustainability reports for different reasons and motives. However, the study infers that the quality and adequacy of the current disclosures are debatable due to a lack of consistency and technical details. The causal reason may be due to the inherently voluntary nature of the corporate carbon disclosure. The study finds that there is less research on carbon accounting and disclosures in developing countries especially, in Africa. There is a need for organizations to streamline the application and approaches to carbon accounting. The study suggests the necessity for government regulators and standard setters in accounting to provide a framework that will guide carbon disclosure practices.

The Effects of Financial and Environmental Performances on Firm Value with Environmental Disclosure as an Intervening Variable

This study aims to analyze the effects of financial performance and environmental performance to firm value with environmental disclosure as an intervening variable. Financial performance which measured by Ratio On Sales (ROS) and environmental performance which measured by PROPER ranking act as independent variables and firm value which measured by stock price acts as dependent variable also environmental disclosure which measured by GRI Standards as an intervening variable. This study uses secondary data and selects the sample used purposive sampling method. The samples consist of non financial companies listed in the Indonesia Stock Exchange (IDX), participated in the PROPER (Program Penilaian Peringkat Kinerja Perusahaan / Performance Rating Assestment Program on Environment Management) and published both annual report and sustainability report for 2017-2018. Partial Least Squares technique is chosen for the study statistic analysis. Results from this research show that financial performance has a negative impact on environmental disclosure, environmental performance has a significant positive impact on environmental disclosure and environmental disclosure does not affect the firm value. Next, the environmental disclosure is not able to intervene the effects of financial performance and environmental performance on firm value. The implications of this research are prove that the environmental aspects of information disclosed by the company have not been an important assessment for investors in viewing the performance of a company and also suggest investors to consider the company's environmental disclosure in making investment decisions because it contain an important aspect of corporate sustainability.

A Study on the Impact of Corporate Social Responsibility on Financial Performance of Companies in India

The main aim of this study is to investigate the impact of corporate social responsibility (CSR) on the financial performance of selected companies listed in the BSE, formerly known as the Bombay Stock Exchange in India. This study is purely based upon the secondary data collected from companies’ annual reports and sustainability reports for last three years ranging from 2016–2017 to 2018–2019. The results indicate that the involvement in socially responsible initiatives has a significantly positive effect on the financial performance of the firms. These findings provide insights to the management to assimilate firm’s CSR initiatives with its strategic business policies and, thus, to renovate the business philosophy from a traditional profit-oriented approach to a socially responsible approach.

A commentary on animal welfare in the US meat and poultry industry

The welfare of farm animals continues to generate vociferous and passionate debate. For many people, their closest, though indirect, contact with animal welfare is through the food they buy, and then, eat, and though animal welfare seems removed from the social practice of buying and eating animal products, it is very much a public issue. This short commentary paper looks to shine some light on animal welfare by reviewing, and reflecting on, how some of the leading meat and poultry producing companies in the US address animal welfare in their annual sustainability reports. The paper reveals that while most of the leading meat and chicken producing companies within the US emphasised their strategic commitment to animal welfare, their commitments are contested, and there are issues about how these commitments are evidenced.

Gender, Komisaris Independen, Ukuran Dewan, Komite Audit, dan Pengungkapan Tanggung Jawab Sosial Perusahaan

This research aims to determine the effect of gender, independent commissioners, board size and audit committee on corporate social responsibility disclosure index. Sample used are companies listed on the Global Reporting Index database and listed on the Indonesia Stock Exchange for period 2013-2018, as many as 340 company-years. The sources of the data were taken from annual reports and sustainability reports. This research uses a quantitative approach and data analysis technique used is multiple linear regression analysis. The results shows that the size of the board and audit committee have a positive effect on corporate social responsibility disclosures. Independent commissioners have a negatif effect on corporate social responsibility disclosure, and no evidence of the effect of gender on corporate social responsibility disclosure.
 Keywords: Corporate Social Responsibility Disclosure; Gender; Independent Commissioners; Board Size; Audit Committee.

Moving Businesses toward Sustainable Development Goals (SDGs): Evidence from an Italian “Benefit-For-Nature” Corporation

Abstract Sustainable development goals (SDGs) are the most relevant and recent attempt to integrate sustainable development ambitions and environmental concerns in a policy framework. Recently, few studies have been conducted to investigate the gap between sustainability reporting and the SDGs, initiating a new stream of research (Lozano 2015; Rosati and Faria 2019). However, the role of accounting systems as a support for moving toward goals and targets outlined by the SDGs has been poorly deepened in not-traditional profit-oriented businesses. Among these, there are cooperatives: jointly owned benefit corporations. The peculiarity of cooperatives lays in the collective governance and the fact that profits are re-invested in the cooperative or in local projects and activities rather than being distributed to the shareholders. The present study intends to fill this gap by answering the following research question: can a cooperative, given its peculiar nature, contribute to sustainability? To do so, the annual sustainability reports of the largest Italian cooperative have been analyzed under the lens of SDGs. The results show that cooperatives can actively contribute to sustainability, especially on the local level. In fact, they have proved to be important players in transposing the SDGs from the national level to the local level, constituting an important link between the international community and the local one.

Environmental and Social Accounting Practices, and Financial Performance of Cement Companies: Empirical Evidence from Nigeria

Engaging in environmental and social activities and disclosing same in the annual financial or sustainability report by business entities has been controversial for over three decades among stakeholders across different industries. Therefore, the objective in the research was to test the empirical nexus of social investment cost (SIC) and environmental protection cost (EPC) in relation to financial performance of quoted cement companies in Nigeria. Financial performance was further denominated into sales turnover (ST) and market value of firms (MVF) to respectively develop two hypotheses in their alternative forms. While the researchers adopted ex poste facto research design, secondary data were obtained from relevant annual financial reports and database of the Nigerian stock exchange for 2009-2017. Descriptive statistics were utilized for data presentation before estimating the test result by adopting multivariate regression model. However, the test result for H1 indicated significant P-value and F-value at 5% level of significance. In addition to accepting H1, positive Coefficients by SIC, EPC, and control variable (total assets-TA) demonstrated a strong adjusted R-square of 65.2483% association with ST, although, the coefficient for intercept was negative. Similarly, the test result for H2 also indicated significant P-value and F-value at 5% level of significance. In addition to accepting H2, positive coefficients of intercept, EPC, and the control variable, market capitalization (MCAP) of cement companies in Nigeria cumulatively contributed a weak adjusted R-square of 25.213% to MVF. However, the coefficient for SIC was negative. Besides observing low level and inconsistent environmental and social accounting practices (ESAP) among cement companies in Nigeria, the researchers concluded that such insignificant level of ESAP by such companies influenced their financial performance. Hence, the researchers recommended cement companies to adopt ethical approach towards expanding investment in ESAP. Keyword s: Environmental and Social Accounting Practices, Corporate Social Responsibility Disclosures, Sustainability Reporting, Financial Performance, Accounting Measure of Financial Performance, Capital Market measure of Financial Performance DOI: 10.7176/EJBM/12-20-07 Publication date: July 31 st 2020

Impact of policy initiatives and collaborative synergy on sustainability and business growth of Indian SMEs

Purpose The influence of sustainability practices, especially those related to the environment and society in driving business growth is evident from the annual sustainability reports of big corporations. Also, there has been a plethora of research relating sustainability performance to the financial performance of these companies. However, in the case of small and medium-sized enterprises, a very limited research study has been done so far considering the societal and environmental aspects of their business operations. Small and medium enterprises (SMEs), especially those in the emerging economy have grossly neglected their responsibilities and obligations towards the environment and society. SMEs are considered as growth engines for any nation. However, literature has shown that a large percentage of SMEs across the world fail within a few years of their incorporation. This paper aims to verify the relationship between sustainability performance and business growth for SMEs in the developing economy. Design/methodology/approach In the paper, the authors have tried to develop a model taking a sample of 200 SMEs from Indian leather and chemical sectors and find out how the factors like collaborative synergy and government policy initiatives impact the sustainability performance of small and medium firms and how in turn, their improved sustainability performance helps them to drive sustainable business growth. Data were mainly collected through primary survey and also from the company websites. Findings Empirical results of the study reveal that both policy initiatives and collaborative synergy positively influence the firm’s sustainability performance and, in turn, the company’s business growth is positively impacted by their enhanced sustainability performance. Company size was found to have a moderating effect on this relationship. Originality/value There are theoretical and conceptual papers elaborating on the importance of adoption of sustainability practices in SME business operations but no empirical study has been conducted to mathematically relate the factors of sustainability and business growth. The authors have tried to build a model relating the factors of sustainability improvement with those of the business growth of the firm and also verified the influence of control variables like company size on the proposed relationship.

Analysis of contents of annual sustainability reports of industrial companies participating in the sustainability index of the Brazilian Stock Exchange

The objective of this article is to analyze the content of environmental disclosure of industrial companies participating in the Corporate Sustainability Index (ISE) of the Brazilian Stock Exchange (B3) from 2009 to 2016, based on the Stakeholders’ Theory perspective. We adopt a descriptive approach, with qualitative and quantitative analysis of secondary data that we analyze by means of content analysis and statistical techniques. The data collection took place from the institutional site of each organization to obtain the Annual Sustainability Reports. The reports went through text analysis, which resulted in an inventory of words related to the concept of sustainability. The results indicate that the analyzed companies have similarities with regard to the content disclosed in the Annual Sustainability Reports. Such similarities occur in spite of the fact that companies operate in different industrial segments (petrochemical, food, wood, pulp and paper products and personal use products) and probably come from a homogeneous perception of the segments interested in the information, which would be in reduced number. Although the surveyed companies operate in different segments, they are subject to similar pressures by stakeholders and that imposes an apparent homogeneity to their reports.

Corporate Social Responsibility and Firm’s Performance: Empirical Evidence from Pakistan

The objective of the study is to examine the impact of CSR activities by the organization on their financial performance. This study employs a quantitative and deductive approach. This research has been carried out with the secondary data which has been taken from the CSR reports of the Overseas Investors Chamber of Commerce and Industry (OICCI) and the annual reports of the listed companies of Pakistan Stock Exchange. In addition to that, the annual reports or sustainability reports of some companies have also been used to collect information about their CSR performance. The sample panel of this study consists of 55 companies having available data for at least a period of 3 years (2014-2016), hence consisting the data of 165 firm years. Random effect linear regression has been run for the two dependent variables for the measure of financial performance. The results indicated that CSR activities in education, community development, health, and infrastructure have a significant impact on organizational performance. The implications and recommendations were also made from the results.

Identifying the effective taxonomies of airline green operations strategy

PurposeThe purpose of this paper is to explore the effective taxonomies of airline green operations strategy.Design/methodology/approachTo this end, a sample of 23 airlines from five regions (North America, South America, Europe, Asia and the Middle East) was surveyed. The annual sustainability reports of the surveyed airlines for the period 2013‒2016 were retrieved from the Global Reporting Initiatives website. K-means clustering analysis was used to generate taxonomic clusters of airline green operations strategy. A special data analysis technique, called rank analysis, was also adopted to identify the significant green actions and develop indicative models.FindingsThis study revealed that three effective taxonomies were adopted by airlines: a low-effect strategic pattern, a low-to-moderate effect strategic pattern and a high-effect strategic pattern. A different combination of green operation actions characterized each strategic pattern.Originality/valueThe research contribution of taxonomies of green operations strategy has so far been limited, country focused and concentrated on the manufacturing sector. This study reported the taxonomies and performed an in-depth analysis of the categories of effective actions taken to promote green performance. Moreover, this study developed indicative models for the relationship between categories of action and green performance for each strategic pattern, an action that has seldom been reported by previous studies of green operations strategies for airlines.

NDIS Green Paper 3: Proxies for Risk - A First Line of Defence

The National Performance Benchmarking Project undertaken by Not-for-profits UWA personnel produced three annual sustainability reports analyzing service providers working in the Australian Disability Services Sector, each published in 2016, 2017 and 2019. This work also contributed to the National Disability Services Annual State of the Sector Reports.3 The data collected, and which continues to be collected, does not assist analysists in identifying prospective causes of service breakdown. However, the findings in these reports highlighted a number of areas which can be indicators of vulnerability in the context of the roll out of the NDIS — this document discusses these indicators and we have referred to them as “Proxies for Risk”. We consider them to be the first line of defense in the context of avoiding a breakdown in sustainability of service delivery as the NDIS rolls out and experimentation leads to learnings. The purpose of this Green Paper is to examine the proxies for risk identified out of the project and to provide a short-form analysis of the extent to which these proxies suggest that potential risks are being faced by service users in the NDIS. We also suggest that these proxies should be reviewed bi-annually or annually.

Sustainability is the New Safety

Editor’s Note: The oil and gas industry is under public scrutiny like never before on a host of health, safety, and environmental issues. These concerns are already affecting how companies operate and interact with the public. This series is intended to shed light on how the industry is actively confronting these challenges or how it should address them going forward. I recently completed my season as SPE Distinguished Lecturer on the topic of managing nontechnical risks, or, in other words, managing business delivery in alignment with the broader interests of the societies in which we operate. It was a distinct privilege that took me to 18 countries and 30 engagements with oil and gas professionals around the world. Among my many takeaways, three stand out: Everywhere, independent of geography, culture, or political situation, the oil and gas industry is facing ever more regulatory scrutiny, higher expectations for responsible business conduct, and an increasingly vocal population. Many in my audiences saw this as a bigger challenge than technical and commercial ones. There is no universal and proven approach to effective management of societal expectations and relationships. Companies large and small are experimenting their way forward, with as many successes as failures. Nobody can guarantee success up front. There is no common terminology. Sustainability, sustainable development, corporate social responsibility, social license, societal or nontechnical risk management are all used in this universe and, by and large, have the same goal, i.e., developing and maintaining long-term, mutually beneficial relationships with societies in which we operate thanks to responsible social and environmental performance. I am not too worried what it is called as long as it yields the desired results. In this article I will be using both the terms “sustainability” and “societal relationships.” Implementing Sustainability is Tough Most companies realize that a glossy annual sustainability report or a charity program directed from headquarters is no longer enough. Society expects deeds and not words. A real contribution to sustainability needs to be expressed in the way we design, construct, and operate; in other words, it needs to be fully integrated in the way we do business. However, as the spectrum of the 17 UN Sustainable Development Goals shows, sustainability covers a broad array of topics, from respecting human rights, delivery of clean and affordable energy, supporting climate action, to protecting the environment and supporting communities. Every discipline and department in the company, from drilling site to corporate office, has a stake in the contribution to sustainability.