Leveraging the Web for Corporate Sustainability Disclosure

Leveraging the Web for Corporate Sustainability Disclosure

Viju Raghupathi (Koppelman School of Business, Brooklyn College, City University of New York, Brooklyn, USA) and Wullianallur Raghupathi (Gabelli School of Business, Fordham University, New York, USA)
Copyright: © 2020 |Pages: 35
DOI: 10.4018/IRMJ.2020070102
OnDemand PDF Download:
Available
$37.50
No Current Special Offers
TOTAL SAVINGS: $37.50

Abstract

Public outcry and demand for transparency have transitioned sustainability disclosure and reporting to the top of the corporate agenda. The web is a powerful vehicle for corporate disclosure, but it could be even more effective. By enabling transparency, the web helps foster better stakeholder relationships that favorably influence corporate sustainability. This research develops a comprehensive portfolio of sustainability design and content factors from the extant literature, and then uses it to evaluate the current online disclosure practices of S&P 100 companies. The authors offer a comprehensive empirical assessment of the state of reporting of these companies and identify differences by industry and by sustainability performance using the Newsweek Green Ranking. The results reveal significant differences in design and content of online disclosure/reporting across industries, but not across performance groups. Overall, this paper highlights how most companies use the web routinely but fail to capitalize on the potential to reflect due diligence and transparency.
Article Preview
Top

1. Introduction

Environmental trends, financial crises, accounting and compensation scandals, and general concern about the social or environmental implications of business operations have triggered public demand for corporate accountability and transparency (Goyal et al., 2015). In the face of such pressure, companies are prioritizing sustainable business models, policies, processes, and strategies and embracing sustainable development in the corporate agenda (Velte, 2017). Management is focusing on creating more transparency on corporate impacts and offering support for managing sustainability challenges. Sustainability information is integrated into corporate disclosure, and business strategies are reformulated to result in better social and environmental performance (Adams and Frost, 2006; Velte, 2017).

Corporate sustainability can be defined as encompassing a range of aspects, among them: sustaining and expanding economic growth, shareholder value, prestige, corporate reputation, customer relationships, and the quality of products and services (Szeleky and Knirsch, 2005); demonstrating the inclusion of social and environmental concerns in business operations and interactions with stakeholders (van Marrewijk, 2003); meeting the needs of direct and indirect stakeholders without compromising the ability to meet future needs; and creating long-term shareholder value by embracing opportunities and managing risks from economic, environmental, and social dimensions. Above all, corporate sustainability entails an underlying corporate commitment to sustainable economic development and improvement in the quality of life for employees, the local community and society.

Companies demonstrate their commitment to sustainability by adopting different practices and communicating these to stakeholders in what is referred to as either sustainability disclosure or sustainability reporting (Braam and Peeters, 2018; Goyal et al., 2015). While financial reporting covers the financial aspects of a company’s performance, sustainability reporting covers its non-financial aspects (Evangelinos and Skouloudis, 2014; Sandberg and Holmlund, 2015; De Silva Lokuwaduge and Heenetigala, 2017). The triple bottom line perspective of Elkington (1998) emphasizes three facets in reporting: economic, environmental and social growth. This position suggests companies have a responsibility to not only make financial profits and maintain economic growth, but to also consider their environmental and societal impacts. Companies use sustainability reporting as a vehicle to communicate and fulfill stakeholder expectations for sustainability, achieving this through a variety of means, among them improving transparency, reducing agency cost (Global Reporting Initiative, 2013; Sandberg and Holmland, 2015), reducing information asymmetry between management and other entities (De Silva Lokuwaduge and Heenetigala, 2017), improving corporate reputation in the marketplace, earning stakeholder trust, and gaining social legitimization (Signitzer and Prexl, 2008).

While achieving satisfactory levels of sustainability disclosure or reporting is desirable, it comes with challenges. Unlike financial reporting, which is heavily regulated, sustainability reporting is voluntary, and therefore characterized by a lack of uniformity (Braam and Peeters, 2018; Goyal et al., 2015; Hahn et al., 2015; Searcy and Buslovich, 2014). While guidelines such as United Nations Global Compact, Global Reporting Initiatives 150 14000, 150 26000, Dow Jones Sustainability Index (Global Reporting Initiative, 2013; Goyal et al., 2015) are proposed, adoption remains voluntary. This results in large variations and discrepancies in corporate disclosure practices. Secondly, companies are facing the task of meeting stakeholder information requirements that may be heterogeneous and hard to satisfy (Bhattacharyya and Cummings, 2015). Finally, stakeholder information expectations have expanded to include not just content variety, but also presentation. This forces companies to adopt a parallel focus on the dimensions of coverage, engagement and versatility in reporting (Amran et al., 2015; Morhardt, 2010).

Complete Article List

Search this Journal:
Reset
Open Access Articles
Volume 35: 4 Issues (2022): Forthcoming, Available for Pre-Order
Volume 34: 4 Issues (2021): 3 Released, 1 Forthcoming
Volume 33: 4 Issues (2020)
Volume 32: 4 Issues (2019)
Volume 31: 4 Issues (2018)
Volume 30: 4 Issues (2017)
Volume 29: 4 Issues (2016)
Volume 28: 4 Issues (2015)
Volume 27: 4 Issues (2014)
Volume 26: 4 Issues (2013)
Volume 25: 4 Issues (2012)
Volume 24: 4 Issues (2011)
Volume 23: 4 Issues (2010)
Volume 22: 4 Issues (2009)
Volume 21: 4 Issues (2008)
Volume 20: 4 Issues (2007)
Volume 19: 4 Issues (2006)
Volume 18: 4 Issues (2005)
Volume 17: 4 Issues (2004)
Volume 16: 4 Issues (2003)
Volume 15: 4 Issues (2002)
Volume 14: 4 Issues (2001)
Volume 13: 4 Issues (2000)
Volume 12: 4 Issues (1999)
Volume 11: 4 Issues (1998)
Volume 10: 4 Issues (1997)
Volume 9: 4 Issues (1996)
Volume 8: 4 Issues (1995)
Volume 7: 4 Issues (1994)
Volume 6: 4 Issues (1993)
Volume 5: 4 Issues (1992)
Volume 4: 4 Issues (1991)
Volume 3: 4 Issues (1990)
Volume 2: 4 Issues (1989)
Volume 1: 1 Issue (1988)
View Complete Journal Contents Listing