Sustainability Reporting on Labor Practices: An Examination in Turkey

Introduction

Globalization and free trade has significantly affected all the economies worldwide. Climate change, environmental problems, rapidly increasing world population, social inequity and poverty, and resource consumption more than the reproduction have raised criticism against the corporations (Ehnert, Harry, & Zink, 2014: 4). Changes in the environment, whether global or local, can no longer be ignored by the organizations due to heavy pressures on them. Especially after the 1990s, corporations have started to be seen as responsible for economic, social and environmental problems in the world (Kolk, 2003; Porter & Kramer, 2011), and the effects of these externalities have raised substantial regulatory and societal pressures on organizations to focus on sustainability (Cohen et al., 2012; Kolk, 2008). Besides, customers are much more conscious and value-driven (Cohen, 2010: 40), and they are willing to pay more for greener products (Akkucuk, 2011).

In line with these forces, sustainability has drawn great interest among organizations and their stakeholders in the last years (Roca & Searcy, 2012). Due to the changes in the perceptions of the environmental forces, organizations have to transform their operations and culture in line with sustainability. While handling these transitions, they need all their stakeholders’ support, especially employees. Thus, labor practices within the organization and employee well-being become very important, if they want to achieve sustainable competitive advantage (Cohen et al., 2012: 1). Besides, HR departments have an essential role to play to turn organizations into sustainable ones. Sustainable HRM literature has risen in an attempt to bridge sustainability and human resources practices (Kramar, 2014).

Organizations that have been targeted due to their negative impacts on the economic, societal and environmental issues, have also been expected to show commitment to their affects (Kolk, 2003). Many organizations have started to show their interests on sustainability issues by publishing corporate sustainability reports. Having realized the interest on sustainability, international bodies have also emerged such as Global Reporting Initiative (GRI) and International Integrated Reporting Council (IIRC) to provide corporate sustainability guidelines and encourage others by showing the best practices in their fields (Sobhani et al., 2009). The aim of this study is to understand what is being reported in sustainability reports, specifically on labor practices. It examines which items, in what extent, are disclosed in sustainability reports with regard to employees. Using GRI guidelines, sustainability reports of Turkish banks were examined.