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Reporting

Sustainable reporting has gained prominence due to increased stakeholder demand for transparency. Research shows disclosure of non-financial information can influence stakeholder perceptions. The amount of sustainability information disclosed by companies has increased as they recognize the commercial benefits and understand stakeholder implications. Key theories like stakeholder, institutional, signaling and legitimacy theory explain why organizations engage in sustainability reporting to inform stakeholders on social, environmental and economic impacts.

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7 views

Reporting

Sustainable reporting has gained prominence due to increased stakeholder demand for transparency. Research shows disclosure of non-financial information can influence stakeholder perceptions. The amount of sustainability information disclosed by companies has increased as they recognize the commercial benefits and understand stakeholder implications. Key theories like stakeholder, institutional, signaling and legitimacy theory explain why organizations engage in sustainability reporting to inform stakeholders on social, environmental and economic impacts.

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kimkimberly
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© © All Rights Reserved
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SUSTAINABLE

REPORTING
Session 1
OVERVIEW
• Over the last two decades, Sustainability Reporting has gained prominence
worldwide because of increased stakeholder demand for greater
transparency.
• Also, substansial increase in number of research devoted to social and
environmental accounting topic.
• Many research found that the disclosure of non-financial information is part
of the dialogue between a company and its stakeholders, often providing
evidence that can influence the perceptions off the stakeholders.
…cont’d
• There is an increase in the level and scope of stakeholder engagement
carried out by companies and other organizations in the perspective of their
reporting mechanisms (Belluci and Manetti,2018), which is not accidental.
• Crowther (2012) traces an archaeology of corporate reporting showing that
oever time, the amount of information provided-first to shareholders, then
to potential investor and then to other stakeholders-has gradually increased
over the last century as firms recognized the benefit of providing wider
disclosure.
…cont’d
• The amount od disclosure regarding corporate social responsibility (CSR)
activity has been increasing rapidly over the last decade, as firms have
recognize the commercial benefits of increased transparency.
• Therefore, the amount of information on sustainability will also increase not
only as firms gain a clearer understanding of its implications but also as they
understand the benefits of greater disclosure.
BACKGROUND THEORY
STAKEHOLDER THEORY - INSTITUTIONAL THEORY -SIGNALLING
THEORY - LEGITIMACY THEORY - SOCIOECONOMIC THEORY
Those theory capable of :
• explaining the decision of private, public, and third-sector organizations to engage
in sustainability reporting.
• Includes deciding whether or not to voluntarily report on sustainability issues, the
format and content of the report, whether or not to have the report independently
assured, determining the assurance provider, and the scope and level of assurance.
MOTIVATION
• Social and environmental accounting includes both financial and non-financial
information and data. It is oriented toward a broad range of organizational
stakeholders to inform them of how the organization affects them and how they
contribute to the organization’s sustainability.
• Social and environmental accounting expand the range of criteria, values, and
indicators that are considered when measuring performance. It looks at the
organization in relation to its general and competitive environment (its
social,economic,natural, and juridical context), since the audience that is interested
in their performance is broader and may differ from that of corporations.
…cont’d
• the rise of an information-based economy has intensified the importance of non-
financial indicators among both management and stakeholders.
• Some academic studies claim that the inclusion of non-financial indicators in a
company’s performance-measuring system contributes to an organization’s strategic
alignment and has a profound impact on organizational effectiveness.
• In addition, non-financial indicators are necessary to understand past performance
and future potential and to make well-informed investment decisions, because they
shed light on critical aspects of a business that cannot be represented by financial
measures, such as human capital, relational capital, and organizational capital.
Source
• Bini, Laura and Bellucci, Marco, 2020, Integrated Sustainability Reporting:
Linking Environmental and Social Information to Value Creation
Processes,Springer

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