Social And Environmental Reporting Research Articles

Motivations for social and environmental reporting in Spanish SMEs: An inductive content analysis

AbstractThis study aims to add to the knowledge on the motivations driving SMEs in Spain to engage in voluntary social and environmental reporting (SER). We apply inductive content analysis to information sourced from interviews with SME owner‐managers, complemented with CEO letters. While the paper confirms that there are several co‐existing motivations for SER in SMEs, inconsistencies are identified between the information disclosed in the two aforementioned sources. Overall, stakeholder engagement seems to be the most important motivation for reporting. Contrary to what the literature to date has shown about the relevance of SME owner‐managers' personal values when it comes to disclosing social and environmental information, our findings suggest that individual beliefs and values are not the main factor driving SER. Results also show industry and firm size are determinants of motivations for SER. The study thus contributes to the literature on this underexplored topic by providing insights into the motivations for SER in SMEs. An understanding of these motivations is pivotal to help policymakers focus their efforts on implementing appropriate institutional reforms in this emerging field.

Reporting controversial issues in controversial industries

PurposeThis article explores how companies in multiple controversial industries report their controversial issues. For the first time, the authors use a new conceptualization of controversial industries, focused on harm and solutions, to investigate the reports of 28 companies in seven controversial industries: Agricultural Chemicals, Alcohol, Armaments, Coal, Gambling, Oil and Tobacco.Design/methodology/approachThe authors thematically analyzed company reports to determine if companies in controversial industries discuss their controversial issues in their reporting, if and how they communicate the harm caused by their products or services, and what solutions they provide.FindingsFrom this study data the authors introduce a new legitimacy reporting method in the controversial industries literature: the solutions companies offer for the harm caused by their products and services. The authors find three solution reporting methods: no solution, misleading solution and less-harmful solution. The authors also develop a new typology of reporting strategies used by companies in controversial industries based on how they report their key controversial issue and the harm caused by their products or services, and the solutions they offer. The authors identify seven reporting strategies: Ignore, Deny, Decoy, Dazzle, Distort, Deflect and Adapt.Research limitations/implicationsFurther research can test the typology and identify strategies used by companies in different institutional or regulatory settings, across different controversial industries or in larger populations.Practical implicationsInvestors, consumers, managers, activists and other stakeholders of controversial companies can use this typology to identify the strategies that companies use to report controversial issues. They can assess if reports admit to the controversial issue and the harm caused by a company's products and services and if they provide solutions to that harm.Originality/valueThis paper develops a new typology of reporting strategies by companies in controversial industries and adds to the theory and discourse on social and environmental reporting (SER) as well as the literature on controversial industries.

Corporate social and environmental reporting in the mining sector: seeking pragmatic and moral forms of legitimacy?

PurposeThe study examines the social and environmental responsibility indicators disclosed by three International Council on Mining and Metals (ICMM) corporate mining members in their social and environmental reporting (SER) from 2006 to 2014. To achieve this aim, the author limits the data two years before (i.e. from 2006 to 2007) and six years after (i.e. from 2009 to 2014) the implementation of the Sustainable Development Framework in the mining sector in 2008.Design/methodology/approachUsing the techniques of content analysis and interpretive textual analysis, this study examines 27 social and environmental responsibility reports published between 2006 and 2014 by three ICMM corporate mining members. The study develops a disclosure index based on the earlier work of Hackston and Milne (1996), together with other disclosure items suggested in the extant literature and considered appropriate for this work. The disclosure index for this study comprised six disclosure categories (“employee”, “environment”, “community involvement”, “energy”, “governance” and “general”). In each of the six disclosure categories, only 10 disclosure items were chosen and that results in 60 disclosure items.FindingsA total of 830 out of a maximum of 1,620 social and environmental responsibility indicators, representing 51% (168 employees, 151 environmental, 145 community involvement, 128 energy, 127 governance and 111 general) were identified and examined in company SER. The study showed that the sample companies relied on multiple strategies for managing pragmatic legitimacy and moral legitimacy via disclosures. Such practices raise questions regarding company-specific disclosure policies and their possible links to the quality/quantity of their disclosures. The findings suggest that managers of mining companies may opt for “cherry-picking” and/or capitalise on events for reporting purposes as well as refocus on company-specific issues of priority in their disclosures. While such practices may appear appropriate and/or timely to meet stakeholders’ needs and interests, they may work against the development of comprehensive reports due to the multiple strategies adopted to manage pragmatic and moral legitimacy.Research limitations/implicationsA limitation of this research is that the author relied on self-reported corporate disclosures, as opposed to verifying the activities associated with the claims by the sample mining companies.Practical implicationsThe findings from this research will help future social and environmental accounting researchers to operationalise Suchman’s typology of legitimacy in other contexts.Social implicationsWith growing large-scale mining activity, potential social and environmental footprints are obviously far from being socially acceptable. Powerful and legitimacy-conferring stakeholders are likely to disapprove such mining activity and reconsider their support, which may threaten the survival of the mining company and also create a legitimacy threat for the whole mining industry.Originality/valueThis study innovates by focusing on Suchman’s (1995) typology of legitimacy framework to interpret SER in an industry characterised by potential social and environmental footprints – the mining industry.

Adopting and adapting sustainability accounting: fit and faith in a family business

PurposeThe purpose of this paper is to provide a theoretically informed analysis of the evolution of environmental management accounting (EMA) and social and environmental reporting (SER), and the accompanying development of a sustainability programme, in a large family-owned, unlisted corporation.Design/methodology/approachA longitudinal case study based on semi-structured interviews and documentary data was conducted. The main periods of fieldwork were carried out in 2007 and between 2010 and 2012. Sustainability reports were collected until 2019 when SER appeared to cease. The case analysis draws on the concepts of organisational identity (OI) and internal legitimacy (IL) to examine the decision-making and actions of a range of key organisational actors as they engage with EMA and SER.FindingsThe study demonstrates that a gap between an organisation’s identity claims (“who we are”) and its enacted identity (“what we do”) can enable the adoption of constitutive, performative and representational EMA and SER. It illuminates the nature of the role of key actors and organisational dynamics, in the form of OI and IL, in adapting these practices. It also demonstrates that, in giving meaning to the concept of sustainability, organisational actors can draw on their organisation’s identity and construct the comprehensibility of an organisational sustainability programme.Research limitations/implicationsMore empirical work is needed to examine the applicability of OI and IL to other settings. It would also be beneficial to examine the potential for OI work to allow organisations to change and reinvent themselves in response to the evermore pressing environmental crisis and the role, if any, of EMA in this process.Originality/valueThe study enriches our understanding of why and how EMA and SER evolve by demonstrating that paying attention to OI and IL can provide further insight into the decision-making and actions of organisational members as they recognise, evaluate, support and cease these practices.

Q methodology to conduct a critical study in accounting: A Q study on accountants’ perspectives of social and environmental reporting

Critical accounting scholars have long lamented the hegemony of a business case rationale in accounting and its impact on the representation of interests other than those of shareholders. However, relatively little prior research has considered the perspectives of the accountant, and what little there is raises concerns about their capacity to engage with ideological diversity and complexity. Q methodology (QM) is a research method that can help critical researchers explore individuals’ perspectives around politically contentious issues by identifying a plurality of perspectives, as well as surfacing the political frontiers between them. To demonstrate this utility, I present a Q methodological study (Q study) of accountants’ perspectives of social and environmental reporting (SER). Theoretically positioned from within critical dialogic accounting, the Q study includes 33 participants – practitioners, academics and students – from Aotearoa New Zealand. QM provides a means for identifying, articulating and analysing, in this case three divergent Factors, or shared perspectives, of SER. Further analysis demonstrates how QM can identify ‘seeds of hope’ and open ‘spaces of possibility’ that lead me to recharacterise accountants’ capacity to engage in SER.

Social and environmental reporting, sustainable development and institutional voids: Evidence from a developing country

AbstractThis study adopts the concept of institutional voids to examine the perceptions of managers and policymakers in developing markets with respect to the actual barriers that hinder social and environmental reporting (SER) towards sustainable development. The study uses in‐depth semi‐structured interviews with managers and decision‐makers and policymakers of the main oil and gas companies in weak institutional settings (Libya). The findings suggest that the absence of environment general authority's role, the absence of a clear legal requirement that refers to SER, the shortage of knowledge and awareness, the lack of motivation from the government, fear of change, and the absence of civil society organisations are perceived as the major barriers that hinder the development of SER. These findings contribute to the literature on institutional voids and sustainable development by providing evidence on SER barriers in the context of a developing country. Therefore, it could be useful to corporate regulators and policymakers to mitigate institutional voids to develop a more focussed SER agenda, when considering regulations for the disclosure and sustainable development.

The past is never dead: the role of imprints in shaping social and environmental reporting in a post-communist context

PurposeMobilizing a theoretical framework combining institutional logics and “imprinting” lenses, this paper provides an in-depth contextualized analysis of how historical imprints affect social and environmental reporting (SER) practices in Romania, a post-communist country in Eastern Europe.Design/methodology/approachThe authors conduct a qualitative field study with a diverse dataset including regulations, publicly available reports and interviews with multiple actors involved in the SER field in Romania. The authors follow a reflexive approach in constructing the narratives by mobilizing their personal experience and understanding of the field to analyze the rich empirical material.FindingsThe authors identify a blend of logics that combine local and Western conceptualizations of business responsibilities and explain how the transition from a communist ideology to the free market economy affected SER practices in Romania. The authors also highlight four major imprints and document their longitudinal development, evidencing three main patterns: persistence, transformation and decay. The authors find that the deep connections that form between logics and imprints explain the cohabitation of logics rather than their straight replacement.Originality/valueThe paper contributes by evidencing the role of imprints' dynamics in the institutionalization of SER logics. The authors claim that the persistence (decay) of imprints from a former regime such as communism hinders (facilitates) the institutionalization of Western SER logics. Transformation instead has more uncertain effects. The pattern that an imprint takes hinges upon its usefulness for business interests.

Social and Environmental Reporting, Sustainable Development and Institutional Voids: Evidence from a Developing Country

This study adopts the concept of institutional voids to examine the perceptions of managers and policymakers in developing markets with respect to the actual barriers that hinder social and environmental reporting (SER) towards sustainable development. The study uses in-depth semi-structured interviews with managers and decision-makers and policymakers of the main oil and gas companies in weak institutional settings (Libya). The findings suggest that the absence of environment general authority’s role, the absence of a clear legal requirement that refers to SER, the shortage of knowledge and awareness, the lack of motivation from the government, fear of change, and the absence of civil society organisations are perceived as the major barriers that hinder the development of SER. These findings contribute to the literature on institutional voids and sustainable development by providing evidence on SER barriers in the context of a developing country. Therefore, it could be useful to corporate regulators and policymakers to mitigate institutional voids to develop a more focussed SER agenda, when considering regulations for the disclosure and sustainable development.

Examining the dynamics of SER evolution: an institutional understanding

PurposeThe purpose of this paper is to provide a theoretically informed analysis of social and environmental reporting (SER) evolution, i.e. how and why the SER evolved over time in a cooperative bank in Italy.Design/methodology/approachThe paper is based on a qualitative fieldwork case study conducted from 2011 to 2015. Information and data were collected through several methods including: interviews with managers involved in the SER’s process; analysis of the SER-related documents; analysis of the website; and observations in the field. The analysis of the empirical evidence draws on the institutional logic (IL) perspective, which provides theoretical insights to interpret the role of the contrasting institutional forces in the evolution of SER.FindingsThe empirical analysis unveils three different stages in the evolution of SER: the “birth” whereby a new form of social reporting was initiated; the “development” through which SER was implemented to become a formal component of the organizational management; and the “de-structuring” when the SER was gradually de-composed. This gradual de-structuring, as well as the initiation and implementation processes, was influenced by different institutionally infused rationalities and logics. These institutionally infused rationalities and logics, along with the specific organizational and contextual events, provided the resources, and created the space and opportunity, for the SER-related changes to occur.Originality/valueThe analysis offers theoretical insights to understand “how” (i.e. processes) and “why” (i.e. the conditions under which) SER gradually evolved, i.e. emerged, was constructed and developed during the phases of implementation and post-implementation. Furthermore, it is shown that SER is multifunctional in nature and unveils how and why these multiple functions change over time. Finally, the analysis provides a theoretical contribution by illuminating the role that different and contrasting ILs play in driving the adoption of organizational practices.

Empathy, closeness, and distance in non-profit accountability

PurposeDrawing on the phenomenological concepts of “empathy” and “communal emotions” developed by Edith Stein (1917, 1922), the purpose of this paper is to discuss the co-existence both of the legitimacy and accountability perspectives in voluntarily delivered social and environmental reporting (SER), based on different “levels of empathy” towards different stakeholders.Design/methodology/approachThe paper adopts an interpretive research design, drawn from Stein’s concept of empathy by using a mixed-method approach. A manual content analysis was performed on 393 cooperative banks’ (CB) social and environmental reports from 2005 to 2013 in Italy, and 14 semi-structured interviews.FindingsThe results show that CBs voluntarily disclose information in different ways to different stakeholders. According to Stein, the phenomenological concept of empathy, and its understanding within institutions, allows us to interpret these multiple perspectives within a single social and environmental report. Therefore, when the process of acquiring knowledge in the CB–stakeholder relationship is complete and mentalised (level 3, re-enactive empathy), the SER holds high informative power, consistent with the accountability perspective; on the contrary, when this process is peripheral and perceptional (level 1, basic empathy), the SER tends to provide more self-assessment information, attempting to portray the bank in a positive light, which is consistent with the legitimacy perspective.Originality/valueThe concept of empathy introduced in this paper can assist in interpreting the interactions between an organisation and different stakeholders within the same social and environmental report. Moreover, the approach adopted in this paper considers different stakeholders simultaneously, thus responding to previous concerns regarding the lack of focus on multiple stakeholders.

Machiavellianism, stakeholder orientation, and support for sustainability reporting

This study investigates the relations among Machiavellianism, the stakeholder orientation, and Italian managers' support for corporate social and environmental reporting (SER). These relationships have not previously been investigated among a sample of experienced managers but have important implications. As anticipated, Machiavellianism had a strong negative association with the support for SER. Machiavellianism was also negatively related to the stakeholder orientation, which in turn was positively correlated with the support for SER. Support for the stakeholder orientation partially mediated the association between Machiavellianism and SER. The findings advance our understanding of the motivations for sustainability reporting by documenting that managers' fundamental personality traits and economic ideologies are closely associated and are important determinants of normative support for social and environmental disclosures. We further suggest that the results support the case for mandated compliance‐with‐standard sustainability reports coupled with a requirement that such reports be independently audited.

Factors determining social and environmental reporting by Indian textile and apparel firms: a test of legitimacy theory

Purpose– The purpose of this research is to investigate the factors determining the social and environmental reporting (SER) of Indian textile and apparel (TA) firms.Design/methodology/approach– The 2010 annual reports of a sample of top 100 Indian TA firms listed on the Bombay Stock Exchange were examined to assess the extent of SER. SER was assessed based on the Global Reporting Initiative index applicable to the TA industry. Multiple regression analysis was conducted to investigate the determinants of SER.Findings– This study reports a low extent of SER in the annual reports of Indian listed TA firms, with a mean disclosure of 14 per cent. On average, firms reported more extensive environmental information, with a mean disclosure of 18.4 per cent, compared to social information, with a mean disclosure of 10.7 per cent. Most firms reported social information relating to “labour practices and decent work”, while the reporting of information relating to “human rights” was sparse. Overall, the SER patterns provide support for legitimacy theory. Consistent with legitimacy theory expectations, corporate size, brand development and audit committee size are significant factors determining the variation in SER. No significant relationship was found between board independence, level of ownership and SER.Originality/value– There is no existing study specifically on SER by TA firms in India. In fact, there is surprisingly little research on SER in the Indian context in general. Given the dearth in research on corporate social reporting in the Indian context, the study extends prior literature on corporate SER by concentrating on SER of TA firms in an emerging economy. The theoretical contribution of this study is the testing of legitimacy theory in the context of an emerging economy. This study contributes towards practice by delineating the relationship between governance structure and SER, particularly with regard to issues such as child labour. These findings have implications for the future development of reporting standards and regulations in regard to corporate governance in India. The dearth of social reporting by Indian TA firms has implications for foreign purchasers of branded products, as international companies have been implicated in sub-optimal social or environmental practices or incidents.

An exploratory analysis of managerial perceptions of social and environmental reporting in China

Purpose – This paper aims to determine the perceptions of managers in China with respect to the pressures for, and the purposes of, social and environmental reporting (SER) in the Chinese context. Design/methodology/approach – The authors interviewed 14 managers from nine different state-owned enterprises, all headquartered in Beijing. Interviews were conducted during 2009, the height of the period of growth in standalone corporate social responsibility (CSR) reporting in China. The authors assess the perceptions of the managers from a neo-institutional perspective. Findings – The findings indicate that, similar to reporting in more Western economies, managers perceive that a variety of coercive, normative and mimetic pressures interplay to influence SER in the Chinese context. The managers perceive peer institutions as exerting the greatest pressures for reporting and, surprisingly, indicate that the government, rather than exerting coercive pressures for SER, instead is seen as playing a facilitating role. The findings also reveal that the managers almost uniformly see the purpose of the reporting as a tool of image enhancement, particularly with respect to the general public. However, in contrast to studies of organizational response to institutional change in other settings, the authors find little non-conformity. Research limitations/implications – The findings suggest neo-institutional arguments for CSR reporting appear to hold, even in China’s socialist market economy. Practical implications – The finding that managers see CSR reporting as being largely about image enhancement may help to explain the low quality of disclosure documented in other studies. Social implications – Improving CSR disclosure in China would appear to require more mandated pressure from, particularly, governmental powers. Originality/value – This is the first study to explore via in-depth interviews the perceptions of managers in China to the evolving practice of standalone CSR reporting.

Content analysis in social and environmental reporting research: trends and challenges

Purpose– The purpose of this paper is to review the use of content analysis in social and environmental reporting (SER) research. It explores how the relevant literature has evolved over time and particularly how recent developments have affected the validity and reliability challenges that researchers face when executing the method.Design/methodology/approach– The paper combines a quasi-systematic review of the literature employing content analysis (examining a sample of 251 studies published over the last 40 years in a wide array of journals with interest in the field), with a largely interpretive meta-analysis, using an index, considering the research questions asked and frameworks used as well as the specific content analysis decisions.Findings– A number of issues of concern in the use of the method are identified, mainly over comparability and reliability of coding schemes. Potential explanations are developed and methodological refinements that could enhance the usefulness of content analysis methods in SER research are subsequently proposed.Research limitations/implications– It should be acknowledged that, as 251 SER studies have been reviewed, there is always the possibility that some unique studies that could have contributed in the discussion have been ignored.Practical implications– By reviewing the use of the method in a comprehensive sample of 251 SER studies published over the last 40 years in a wide array of journals with interest in the field, the paper also offers a guide for researchers (particularly in the SER field) wishing to employ content analysis in the future.Originality/value– The paper contributes to the literature by offering a critical and comprehensive review of the method’s theoretical underpinnings and application in SER research, and by describing changing patterns in content analysis, in order to help build a more secure foundation for future work.

Changing Social and Environmental Reporting Systems

Based on a case study of a large multinational group, this paper addresses the way in which social and environmental reporting (SER) systems were changed and the consequences and controversies associated with this change. Drawing on Power’s work on the processes by which things are made auditable via underlying systems, we focus on how and why a specific programme with auditability as its ultimate aim changed the basis on which the external social and environmental report was prepared. Our analysis demonstrates that the perceived alignment with the financial report preparation and the explicit pursuit of auditability legitimized SER and paved the way for data systems to be changed. The programme borrowed authority from financial accounting technologies not only to make a system change but also to push SER internally, as we suggest that an intraorganizational group used the programme to ensure the existence and organizational status of SER. However, we also illustrate some of the practical challenges associated with this change, which include issues related to internal control and the establishment of organizational boundaries.

The adoption of the materiality concept in social and environmental reporting assurance: A field study approach

This study investigates the logics or values that shape the social and environmental reporting (SER) and SER assurance (SERA) process. The influence of logics is observed through a study of the conceptualisation and operationalisation of the materiality concept by accounting and non-accounting assurors and their assurance statements. We gathered qualitative data from interviews with both accounting and non-accounting assurors. We analysed the interplay between old and new logics that are shaping materiality as a reporting concept in SER. SER is a rich field in which to study the dynamics of change because it is a voluntary, unregulated, qualitative reporting arena. It has a broad, stakeholder audience, where accounting and non-accounting organisations are in competition. There are three key findings. First, the introduction of a new, stakeholder logic has significantly changed the meaning and role of materiality. Second, a more versatile, performative, social understanding of materiality was portrayed by assurors, with a forward-looking rather than a historic focus. Third, competing logics have encouraged different beliefs about materiality, and practices, to develop. This influenced the way assurors theorised the concept and interpreted outcomes. A patchwork of localised understandings of materiality is developing. Policy implications both in SERA and also in financial audit are explored.

Social and environmental reporting in Belgium: ‘Pour vivre heureux, vivons cachés’

This paper investigates how different social and environmental reporting (SER) practices arise in the context of the emerging sustainability logic. Based on interview evidence gathered in 14 Belgian listed companies with various SER practices, ranging from non-disclosure to substantive reporting, we observe that the degree of development of symbolic and material insensitivity to the prevailing profit-maximizing logic determines the format of the SER practice. More specifically, we find that the presence of either symbolic or material resistance to the emerging sustainability logic can explain the complete absence of SER.

Legislations and Other Factors Associated with Non-Financial Disclosure: A Cross-Country Study

This paper investigates corporate social and environmental reporting (SER) practices within an Australian and Indian context. SER disclosure has the potential to increase organisational competitiveness and profitability and thereby share price. The study investigates the SER practices of Australian and Indian organisations across five industries. Using 35 GRI based social and environmental indicators; the study evaluates disclosure information presented in annual reports. Results indicate that with lower number of legislations, SER by Indian organisations is lower in quantity than Australian organisations. Regression analysis is used to empirically examine the other determinants of SER practices. The results indicate that total disclosure is significantly higher only for large organisations, particularly within the mining and chemical industries. The study also found a significant difference in the extent of total disclosure between Australia and India.

The institutionalization of social and environmental reporting: An Italian narrative

This paper focuses on social and environmental reporting (SER) and investigates, through prolonged fieldwork with an Italian multinational company, the dynamics through which SER, from its first introduction, has modified and developed to become institutionalized. The empirical data has been interpreted through the lens of institutional theories to provide a narrative of a three-step process which has brought about the institutionalization of SER, namely: (i) the construction of a common meaning system around the concept of social and environmental responsibility; (ii) practicalisation involving the emergence of rules and routines; and (iii) reinforcement through the implementation of intra-organizational managerial procedures and structures. The paper highlights that SER, as a result of a recursive and progressive process, has become an established and taken for granted actuality within the case study organization.

Factors Associated with the Social and Environmental Reporting of Australian Companies

Purpose: The objective of this study is twofold. Firstly, to examine the extent of social and environmental reporting in Australia, selected Global Reporting Initiative (GRI, 2002) social and environmental reporting guidelines were used to determine the extent; secondly, to analyse the association between firm characteristics and Levels of Social and Environmental reporting (SER), regression analysis was used to test the hypotheses. Design/methodology/approach: This study investigated SER practices of 47 small and large Australian companies drawn from five industries. Using seventeen social and eighteen environmental disclosure indicators, the study evaluates disclosure information presented in annual reports. Regression analysis was used to empirically examine the determinants of SER. Findings: The results indicated that the extent of SER by Australian Companies was fairly low and the extent of total disclosure was significantly higher for large organisations in the Industrial Transport industry. Companies with negative return on total assets reported significantly higher social information. The extent of total disclosure was unrelated to an organisation’s age and external auditor size. Originality/value: The study provided a detailed analysis of the SER from the developing economy perspective using GRI social and environmental performance indicators. Research limitations/implications: The study was limited by the use of selected GRI social and environmental indicators. Practical and Social implications: The paper argues for greater social and environmental accounting researcher engagement with SEA practice. The study showed the gap and challenge still lies ahead in improving the quantity and quality of SEA from a developed economy perspective.