Disclosure Of Sustainability Information Research Articles

What are the main drivers of SMEs’ production of sustainability reports?

This study aims to deepen our understanding of the theoretical frameworks that underlie SMEs' disclosure of sustainability information. Qualitative empirical research was conducted on SMEs that proactively engage in sustainability reporting. To identify the key drivers, interviews were conducted with a sample of Spanish SMEs, and the reasons for sustainability reporting provided by informants were ranked by frequency. Our findings indicate that stakeholder theory holds a prominent position, closely followed by legitimacy theory and the resource-based view. This ranking reveals a mixture of external and internal drivers, contributing to the existing literature by emphasizing the predominance of management factors over sociological arguments in favor of sustainability reporting in SMEs. Regulators, practitioners, and academics can benefit from these findings to better understand the decision-making processes of SMEs regarding sustainability reporting practices, while accounting for their relationships in the contexts in which they operate.

Assessing sustainable supply chain transparency practices in Taiwan semiconductor industry: A hierarchical interdependence approach.

This study contributes both theoretical and practical perspectives by providing sufficient resolution for detecting sustainable supply chain transparency structures, particularly when transparency has stretched beyond current supply chain operation, which involves various uncertain and complex factors. Sustainable supply chain transparency is established to enhance the disclosure and visibility of sustainability information within and outside the supply chain. However, the complexity and uncertainty of accessing supply chain information make such assessments challenging. This study integrates the balanced scorecard as the theoretical foundation in addition to the technical perspective for a performance model, employing a hybrid of the fuzzy Delphi method, a fuzzy decision-making trial and evaluation laboratory, an analytic network process and Choquet Integral. The analysis aims to identify valid sustainable supply chain transparency attributes, examine causal relationships, assess hierarchical interdependencies, and indicate priority practices for Taiwan's semiconductor industry. The findings reveal six aspects and 20 indicators as a valid hierarchical structure, with causal aspects such as stakeholder efforts, information processing and analytics, and digital capability. The crucial managerial implications that focus on production and logistics processes, government regulation, safety and data security include connectivity and data confidentiality. The prioritizing practices of disclosure, traceability, and visibility are indicated to improve sustainable supply chain transparency in the industry.

The Challenges and Legal Development of Corporate Sustainability Information Disclosure in Taiwan in Light of the Corporate Sustainability Reporting Directive (EU) 2022/2464

The Challenges and Legal Development of Corporate Sustainability Information Disclosure in Taiwan in Light of the Corporate Sustainability Reporting Directive (EU) 2022/2464

Institutional investors' information needs in the context of the sustainable finance disclosure regulation (EU/2019/2088): the implications for companies' sustainability reporting

PurposeThe paper aims to provide companies with a better understanding of the needs of institutional investors to improve the disclosure of sustainability information by companies. The study investigates the changed information needs of institutional investors resulting from the Sustainable Finance Disclosure Regulation (SFDR).Design/methodology/approachThis study uses an internet-based survey instrument amongst institutional investors to gain insights into their needs regarding sustainability information. The authors received 155 responses in total and use descriptive statistics and t-tests to analyse the survey data.FindingsThe results demonstrate that the implementation of the SFDR challenges institutional investors, as it affects their decision process. Additionally, the findings still indicate a lack of available corporate sustainability information, making it even more challenging for institutional investors to make appropriate investment decisions. Respondents suggest that information on climate-related risks is more important than the European Union (EU) Taxonomy metrics for meeting the SFDR requirements.Research limitations/implicationsThe findings are mainly restricted to the opinion of European investors. However, the evidence contributes to the existing literature by investigating institutional investors' information needs in the new regulatory landscape.Practical implicationsAs the study provides insights into institutional investors' needs, reporting companies recognise the relevance of transparently providing sustainability information to be further considered in the investment process of institutional investors despite the regulation. The findings can help regulators develop uniform and global sustainability reporting standards.Originality/valueThis paper is the first to provide evidence on sustainability information requested on the institutional investors' side. The survey gathers primary data from professional investment members unavailable in databases or reports.

Public Disclosure of Sustainability Information from Critical Suppliers and Buyer ESG Risk Exposure (WITHDRAWN)

Public Disclosure of Sustainability Information from Critical Suppliers and Buyer ESG Risk Exposure (WITHDRAWN)

The Effect of Sustainability Information Disclosure on the Cost of Equity Capital: An Empirical Analysis Based on Gartner Top 50 Supply Chain Rankings

While disclosing financial information has been widely proved to reduce the financing cost of a company, the impact of non-financial information, such as sustainability information, disclosing on the financing cost of the company is still in debate. The goal of this paper is to explore the impact of disclosing sustainability-related information on the cost of equity for firms. The paper first introduces the concept of sustainability information disclosure, and then exhibits its benefit through exploring its impact on reducing a firm’s financing cost. It uses the Gartner supply chain top 50 rankings to construct the experiment environment to test for the effect of sustainability information disclosure on the cost of equity capital. The study uses the Gartner top 50 supply chain rankings from 2013 to 2017 to construct the experiment environment, and test for the sustainability information disclosure’s impact on reducing the cost of equity capital. The regressions, which are based on the 350 firm-year sample of the United States and the 604 global firm-year sample, indicate that sustainability information disclosure significantly reduced the cost of equity capital. This paper uses a fixed effect regression method to analyze the impact of sustainability information disclosure. According to the regression result, the sustainability information disclosure variable has a significant negative coefficient. The result is robust under many settings. Thus, the paper finds that sustainability information disclosure significantly diminishes the cost of equity capital, controlling for ESG information disclosure. It also discusses the implications of the findings and future research directions for sustainability information disclosure.

Moving Forward with Tax Sustainability Reporting in the EU – A Quantitative Descriptive Analysis

This article examines the status quo of tax disclosure in the context of sustainability reporting and proposes recommendations for the creation of uniform EU Sustainability Reporting Standards. The analysis is based on the 2020 and 2021 sustainability reports of 112 firms listed in the three largest economies of the European Union: France, Germany and Italy. The authors have developed a multidimensional scoring model – the Tax Transparency Index – that considers both the extent and the manner of presentation of the textual information. The results show that the content coverage falls short of the requirements of the globally most widely applied tax sustainability reporting standard, GRI 207. Furthermore, it shows that tax sustainability reporting appears to be highly fragmented, making it difficult for users to find relevant information. Two implications emerge for the envisaged development of EU Sustainability Reporting Standards. First, a standardization of the materiality assessment and a limitation of the “comply-or-explain” principle with regard to taxes is needed. Second, the authors recommend disclosure of tax sustainability information within a single document and therefore welcome the recent mandate of the EU CSR Directive.

The impact of social vs environmental sustainability information disclosure on consumer choice of delivery time with varying sustainability concerns

PurposeThis paper investigates the impact of sustainability information disclosure on consumers' choice of order-to-delivery lead-time in relation to consumers' sustainability concern.Design/methodology/approachBased on two choice experiments with participants from the Netherlands (n = 348) and the United Kingdom (n = 1,387), the impact of sustainability information disclosure was examined in connection with consumers' concerns for environmental and social sustainability. Information on environmental impact (carbon emission) and social impact (warehouse workers and drivers' well-being) was considered and compared.FindingsDisclosing sustainability impact information significantly increased consumers' preference and choice for longer delivery times, with equivalent effects for environmental and social impact information. Consumers' relevant (environmental or social) sustainability concern as personality traits enhanced effects on preferences, as did priming of environmental concern.Research limitations/implicationsFuture research may consider differences between product categories or e-commerce companies' reputation in sustainability activities.Practical implicationsThe findings provide opportunities for online retailers to influence consumer choice of delivery time, especially through disclosing environmental and/or social sustainability information.Originality/valueThis study fills a gap in the literature on sustainability information disclosure to actively steer consumer choice of delivery time, particularly regarding the effect of social sustainability impact information in comparison to its environmental counterpart.

A Smart Decision Support Framework for Sustainable and Resilient Supplier Selection and Order Allocation in the Pharmaceutical Industry

Supplier selection and order allocation (SS-OA) are two of the most important strategic decisions for supply chain network design and operation. If sustainability and resilience criteria are taken into consideration together and a holistic sustainable and resilient SS-OA is carried out, it may enable the supply chain network to perform better when subjected to disruption scenarios. In this research paper, a novel comprehensive multi-phase, multi-period sustainable, and resilient SS-OA decision support framework has been proposed. This framework integrates fuzzy multi-criteria decision-making (MCDM) techniques with a fuzzy multi-objective mixed integer nonlinear programming (MOMINLP) mathematical model to optimize triple bottom line (TBL) sustainability and resilience criteria simultaneously for a multi-modal, multi-echelon supply chain network. The proposed framework has been implemented using real-time data collected from the pharmaceutical industry. The results show that among the TBL sustainability criteria, product price, past business, innovative capability, and information disclosure rank as the most significant sub-criteria for the DMs in the pharmaceutical industry, while robustness and flexibility are considered the most valued attributes for potential suppliers as far as the resilience criterion is concerned. An assessment of the results has revealed that transfer cost and custom clearance cost together comprise more than two-thirds of the overall cost of the supply chain network. It has also been noted that inland transportation of goods is dominated by rail as the most preferred mode of transport. Transportation by rail is particularly preferred by suppliers located in geographically contiguous countries.

Value Relevance of Environmental Sustainability Information Disclosure

To empirically investigate the value relevance of environmental sustainability information disclosure of listed oil and gas firms in Nigeria, this study made use of Ohlson 1995 Valuation Model and a fifteen (15) year time period beginning from year 2006 to year 2020. Further, the study applied carbon emission information disclosure data as the non-financial information and hypothesized that carbon emission information disclosure is value irrelevant in Nigeria. In this study, ex-post facto and descriptive research design based on a panel data set secondarily sourced from annual financial reports of eight (8) listed oil and gas firms in Nigeria was employed. Robust least square regression analysis technique was employed to test the formulated hypotheses. Results obtained from the descriptive statistics reflects a poor carbon emission reporting situation in Nigeria. The result reveals that on average about 2% of the sampled firms disclosed information relating to carbon emission during the period under study. Specifically, the notion that investors perceive the control of carbon emission as severe cost rather than profit was established. This is due to the outcome from the regression result which suggest that stock market investors reactions towards carbon emission disclosure of oil and gas firms in Nigeria is negative. However, this study recommends that to relieve such negative consequences in the capital market, managers of oil and gas firms in Nigeria must take appropriate action to communicate their commitments and efforts genuinely and adequately around carbon reduction to investors. This study contributes to the growing field of environmental sustainability accounting, particularly from a market that is underdeveloped like Nigeria, by offering empirical evidence relating to the relevant value of carbon emission reporting with practical financial implications that will be most helpful to investors.

Disclosure of Sustainability Information in Banks: The Case of Slovakia and Turkey

The study aimed to determine the extent to which sustainability issues are disclosed by banks operating in Slovakia and Turkey between 2019 and 2021 and whether there is a significant difference in the level of information disclosed within the scope of sustainability between countries and years. To determine the level of disclosure of sustainability information, firstly, content analysis was conducted within the scope of GRI4. Then, a two-way ANOVA test was applied to determine the statistical differences between countries and years in terms of the level of information disclosure. According to the results of the study, the highest level of disclosure for banks in Slovakia and Turkey was for general standards information, while the lowest level of disclosure was for environmental information. In addition, significant differences were determined in terms of reporting across both years and countries. The disclosure score for countries has shown a steady but small increase over the years. In addition, the information disclosure scores of the countries were close to each other, especially for 2019 and 2020, and there were no major differences. This research contributes to the literature by comparatively presenting the level of sustainability reporting of large-scale commercial banks in the banking sector of two countries within the scope of the GRI Financial Services Sector disclosure index.

Chief executive officer ability and corporate environmental sustainability information disclosure

AbstractThis study explores the impact of CEO ability on corporate environmental sustainability information disclosure. We take samples from Chinese A‐share listed companies from 2010 to 2019 and use the ordinary least squares as a baseline regression model to check the relationship between CEO ability and corporate environmental sustainability information disclosure. Our findings are robust to different corporate environmental sustainability information disclosure measures and CEO ability. We found a positive association between CEO ability and corporate environmental sustainability information disclosure; thus, firms with a more able CEO are more likely to disclose more corporate environmental sustainability information. Our results also found a significant negative interaction coefficient between CEO ability and CEO career concerns. As the CEO grows older, his/her ability decreases; therefore, corporate environmental sustainability information disclosure reduces. Furthermore, we document that a female CEO strengthens the relationship between CEO ability and corporate environmental sustainability information disclosure. The study results are important for understanding corporate environmental responsibility development and implementation, particularly in China.

Sustainability and Financial Reporting Quality for Listed Manufacturing Companies in Nigeria: The Legitimacy Theory Perspective

The universal declaration of a healthy and sustainable environment was adopted by the United Nations (UN) Human Rights Council in 2021 as a fundamental human right; The U.S. Security Exchange Commission in March, 2022 and the European Union's directives in 2014 strengthen the need for all reporting entities to include sustainability reports in their annual reports, for the purpose of improving the quality of financial reporting. Our study examined how sustainability reporting affects the quality of financial reporting from the perspective of legitimacy theory, within the manufacturing sectors in Nigeria as a result of their environmental impact amongst other sectors. The published annual reports of 16 listed manufacturing companies, on the Nigerian Stock Exchange Market, were observed between the financial reporting periods of 2011 and 2020. Sustainability indices were proxied using both the Environmental Disclosure index and Social Disclosure index, while the financial reporting quality was measured using the Accrued earnings management, following the Jones (1991) Model. Using a panel regression analysis, the study applied the Variance inflation factor to test for multicollinearity among the predictors and also employed the fixed effect estimator, as suggested by our Hausman test result, in analyzing the observed data. Our findings revealed that environmental disclosures do not impair the quality of their financial reports. Such impracticability could have resulted from the use of strict environmental regulations by the government and its agencies. However, opportunistic managers could use social disclosure information to dilute the quality of financial reporting. We also found that the profitability performance of manufacturing firm is highly susceptible to impairing the quality of financial reports. We suggest that auditors should be provided with a full-fledge understanding of sustainability reporting to unveil managements' practice of earnings management; the financial reporting council should mandatorily impose the disclosure of sustainability information either as a stand-alone report or as part of the annual reports to allow stakeholders to make relevant economic decisions about the firm; and adequate internal control systems should be in place and should be assessed on yearly basis, as firms continue to operate.

Determinants of sustainability information disclosure of local governments in Latin America

This paper analyses the socioeconomic factors that influence the disclosure of sustainability information on 99 local government websites in 2018 in countries that make up the Pacific Alliance (PA) in Latin America, associated with internal and external demands that public entities have for accountability in social and environmental issues. We use as methodology a content analysis of the sustainability information disclosed by local entities on their websites and a regression of Ordinary Least Squares (OLS). This article shows empirical evidence that the size, budget capacity and the economic level of the municipality are factors associated with the sustainability disclosure on websites, due to internal and external factors impacting the decisions and actions taken by the entities related to the sustainability and its disclosure. These results are important for academic and technical discussions in a region with specific characteristics, different from most of the countries studied in previous literature on the subject. Este trabajo analiza los factores socioeconómicos que influyen en la divulgación de información sobre sostenibilidad en 99 sitios web de gobiernos locales en 2018 en países que conforman la Alianza del Pacífico (AP) en América Latina, y que están asociados con demandas internas y externas que tienen las entidades públicas para la rendición de cuentas en materia social y medioambiental. Se realizó un análisis de contenido de la información de sostenibilidad divulgada por las entidades locales en sus sitios web y una regresión de Mínimos Cuadrados Ordinarios (MCO). Este artículo muestra evidencia empírica de que el tamaño, la capacidad presupuestaria y el nivel económico del municipio son factores asociados con la divulgación de sostenibilidad en los sitios web, por factores internos y externos que inciden en las decisiones y acciones que toman las entidades asociadas con la sostenibilidad y su divulgación. Estos resultados son importantes para las discusiones académicas y técnicas en una región con características específicas, diferentes de la mayoría de los países estudiados en la literatura previa sobre el tema.

SDG Adherence of Social Performance Indicators Used by Brazilian Mining, and Oil and Gas Extraction Companies

This study aimed to examine whether the social performance indicators used by mining companies participating in the BM & FBOVESPA Corporate Sustainability Index (indice de sustentabilidade empresarial [ISE]) during 2005–2021 were aligned with United Nations’ Sustainable Development Goals (SDGs). Content analysis was conducted after collecting key information from voluntary sustainability reports presented by the companies. The results uncovered 423 social indicators and revealed repeated discontinuity and large time gaps of as many as 6 years in the disclosure of sustainability information. Among the SDGs investigated, the most discussed were (in order): SDGs 4, 3, 5, 1, 10, and 2. Thus, it is recommended that even though SDGs have been implemented since 2015, the desired social impact can be created only when companies in the mining and extraction sectors make a formal commitment to continuously disseminate sustainability reports and work equitably on SDG goals.

Financially material sustainability reporting and firm performance in New Zealand

PurposeThis paper aims to examine the relationship between sustainability reporting and firm performance in New Zealand, encompassing the materiality concept of sustainability reporting based on the newly available sustainability reporting standards of the Sustainability Accounting Standards Board (SASB). This set of disclosure items published in 2018 is likely to impact on investors’ decision-making and firm performance, as stipulated by the SASB.Design/methodology/approachUsing a sample of 84 New Zealand companies during the period 2017–2019 and an ordinary least squares statistical approach, this research examines whether firms disclosing sustainability reporting and financially material sustainability information have better performance than the ones non-disclosing.FindingsConsistent with the legitimacy and stakeholder theories, a positive relationship between sustainability reporting and performance is observed. This positive association is stronger when the sustainability disclosure is financially material information as defined by the SASB.Originality/valueThe outcome of this study provides evidence of the financial incentives for firms to initiate sustainability reporting, especially including financially material sustainability information as guided by the SASB. It also supports the rationale of the SASB for developing new standards that can be globally applicable, influencing investors’ decisions and firm’s financial performance. The results also have implications for the management of New Zealand firms in considering the disclosure of material sustainability information which is linked to firm performance.

Do ownership structures and governance attributes matter for corporate sustainability reporting? An examination in the Indian context

PurposeBased on the essence of the legitimacy and agency theories, this study empirically investigates the influence of corporate governance attributes and ownership structures on sustainability reporting of companies listed on the National Stock Exchange (NSE), India.Design/methodology/approachThe study is based on panel data regression analysis of sustainability reporting practices of 53 environmentally sensitive companies drawn from NIFTY100 Index at NSE. All data pertaining to sustainability information disclosure, ownership structure and corporate governance characteristics were sourced from sustainability report, business responsibility report, annual report and Centre for Monitoring Indian Economy (CMIE) database for the years 2015–2019.FindingsThe empirical result reveals that sustainability reporting scenario has been consistently improving in India. This study documents that government ownership and frequency of board meetings are the two most important factors significantly influencing the extent of sustainability information disclosure of companies. However, the present study failed to find any significant impact of board size and big4 auditing on sustainability reporting practices. Unexpectedly, a higher number of independent directors does not improve sustainability disclosure of companies in India.Originality/valueThis study is one of the first studies to investigate how the nature of ownership and corporate governance characteristics contribute to or impede sustainability reporting practices of companies in India. This study offers important insights to regulators, practitioners and investors to analyze whether sustainability disclosure of companies is influenced by corporate governance attributes. It also provides a perspective for regulators and corporate strategists to assess the impact of recent corporate governance reforms in India and consider how corporate governance mechanism can be used to improve sustainability reporting practices.

Venture Capital in the Rise of Sustainable Investment

In recent years, the world has witnessed a soaring inflow of capital into sustainable investment. This is particularly so following the devastating COVID-19 pandemic. However, while a growing amount of literature has been deliberating debt financing in sustainable investment, less ink has been spilt on equity financing in this area, and even less scholarship has explored the role of government and law in supporting sustainable venture capital (‘VC’) funds. This paper proposes a dualist approach towards facilitating the development of sustainable VC funds encompassing a contractarian strategy with government support. The contractarian approach includes effective contracting covering the entire VC cycle in sustainable investment. It aims to provide strong incentives for all participants, ranging from investors, entrepreneurs and fund managers, to credit-rating agencies and evaluation firms. In the same vein, this paper seeks to craft a role for regulators that facilitates the simultaneous availability of several factors in a sustainable VC cycle (i.e., fund raising, investment and exit). In the fund-raising stage, governments can play an active role by expanding the source of financing for sustainable VC funds and enacting detailed and targeted legislation. In the VC investment stage, sustainable VC funds should make full use of their strong corporate governance rights and monitoring tasks to ensure that start-ups deliver on their sustainable promises. In the exit stage, a specialised sustainability board is strongly recommended to offer viable exit options, together with greater standardisation and comparability in sustainability information disclosure, and regulatory support for trustworthy sustainable impact rating agencies to sustain investor confidence.

Sustainability Reporting by State Universities in Indonesia: An Examination of Influential Characteristics

The aim of this study was to analyze the characteristics of sustainability information of higher education institutions in Indonesia. The population and research sample were all state universities in Indonesia, as many as 125. The method used was logistic regression analysis. The results showed that 29.6% of state universities in Indonesia had disclosed sustainability information and the remaining 70.4% had not disclosed sustainability information. The logistic regression results show that college size has a significant effect on sustainability information disclosure. The bigger the university, the more likely it is that the university will disclose its sustainability information. On the other hand, age and reputation did not significantly influence the disclosure of sustainability information.

Political connections and firm performance in an emerging market context: the mediating effect of sustainability disclosure

PurposeThis study examines the mediating effect of sustainability disclosure on the relationship between political connections and firm performance from the resource-based view.Design/methodology/approachThe sample of this study was sourced from 888 public companies listed on the Indonesia Stock Exchange (IDX) from 2016 to 2017. Path analysis and Sobel tests were used to determine the mediating effect of sustainability disclosure.FindingsThe results show that political connections have a positive and significant influence on firm performance. Furthermore, sustainability disclosures mediate the relationship between political connections and firm performance.Research limitations/implicationsIn the context of developing countries such as Indonesia, managers can make the existence of parties in politically connected companies as a medium to demonstrate their adherence to external stakeholders through the disclosure of sustainability information.Originality/valueThis study is the first to investigate the mediating effect of sustainability disclosure on the relationship between political connections and firm performance, especially in emerging markets. The parties of the politically connected companies use a social responsibility mechanism as a medium that can sustain their operational sustainability whilst gaining long-term economic benefits.