Post on 12-Jul-2015
Ben Puhl
July 22, 2010
Background
Empirical Environment and Approach
Content Analysis of Sustainability Reports
Results and Discussion
Conclusion
Compliance vs. Voluntary Reporting
Development of Voluntary Standards around Sustainability
Motivations for Sustainability Reporting
Efficacy of Reporting
CSR and Institutional Theory
Corporate reporting started in U.S. within financial field
Spread to encompass environmental aspects
Mandatory reporting in many countries including the UK, Canada, and Japan
Environmental reporting in U.S. required under Regulation S-K, as well as TRI and EPCRA
Move towards CSR – avenue to place emission data
GRI – standardize reporting for comparison.
Pro Con
Further relationships with stakeholders
Risk reduction
Provide legitimacy and transparency
Develop corporate image
Expensive Market demand may be
weak Higher risk to company
Blackburn, 2007
Mixed◦ Positive relationship between reporting and financial
performance (Stanwick and Stanwick, 2000)
◦ No correlation (New Economics Foundation, 2000)
◦ Only a ploy to deceive stakeholders (Gray, 2001)
◦ Positive correlation between stock price and sustainability index inclusion (Curran and Moran, 2007)
◦ No correlation (Moneva and Ortas, 2008)
Firms offering voluntary environmental reports has increased since the 1990’s (Kolk, 2005)
Growth of CSR is concurrent with growth of rating/ranking schemes (Porter and Kramer, 2006)
Too many schemes for cross-comparison (Brown et al., 2009)
GRI created to provide unification (Willis, 2003)
0
200
400
600
800
1000
1200
1400
1998 2000 2002 2004 2006 2008 2010
Nu
mb
er
of
Rep
ort
s
Year
Number of Sustainability Reports Following GRI Guidelines
“The GRI has achieved a single, global guidance on sustainability reporting that just about everyone now believes in,” (Hussey et al., 2001)
“Global Reporting Initiative is arguably the best known set of guidelines for producing such reports worldwide,” (Brown et al., 2009)
GRI has become the de-facto standard for producing CSR
GRI has attempted to promote Sustainable Development
Hart’s stages of Sustainable Development (1997)◦ Pollution Prevention
◦ Product Stewardship
◦ Clean Tech
GRI, DJSI, and NGR as Legitimacy and Reputational Signals
Sampling Scheme
GRI – standardization and institutionalization provide legitimacy – still lacks comparisons
DJSI and NGR – provide relative standing outwardly to stakeholders via rankings/ratings◦ Favorable position can be a reputational benefit
H1: Firms reporting more sustainability activities are more reputable
H2: Firms reporting more aggressive sustainability activities are more reputable
H3: Firms conforming to legitimate CSR guidelines are more reputable
41 publically available CSR documents analyzed
Hierarchical◦ Fortune 500 companies
◦ Sectors: Electronics, Retail, PetroChemical
◦ DJSI inclusion
◦ Published sustainability report
◦ Matched control group of non-DJSI firms based on descending firm size
Code Book Development
Data Environment for Quantitative Analysis
Content analysis good at finding themes in text (Bowman, 1978)
Grounded Theory (Glaser and Strauss, 1967)◦ Coding based on Hart’s Corporate Greening Stages
Pollution Prevention
Product Stewardship
Clean Technology
NVIVO 8 – transformed qualitative data (text) to quantitative data (coverage statistics)
Coverage statistics aggregated in Excel and exported to SPSS
Also included firm-level and document statistics in SPSS◦ Fortune rank, DJSI inclusion, NGR rank, GRI
use, page length, report year, etc.
General statistics – mean, std. dev.
Binomial Logistic Regression - DJSI
Linear Regression - NGR
Descriptive statistics
Binomial Logistic Regression
Linear Regression
Electronics Retail PetroChemical
Electronics Retail PetroChemical
Attribute n Mean Std. Dev.
Corporate 38 0.007 0.014
Electricity 38 0.027 0.035
Air/Water Emissions 38 0.072 0.082
Solid Waste 38 0.020 0.024
Upstream Sourcing 38 0.016 0.026
Product Design 38 0.014 0.023
Use Impacts 38 0.023 0.038
End-of-Life 38 0.011 0.018
Metrics 38 0.014 0.048
Clean Tech 38 0.009 0.022
Environmental Pages 38 14.618 17.059
NGR Green Score 38 78.236 9.833
DJSI 38 0.474 0.506
Dependent Variable: DJSI Inclusion (Inclusion = 1, Exclusion = 0)
Variable B Wald Sig. Exp (B)
Pollution Prevention
-11.058 2.516 0.113 0.000
Prod. Stew. 3.658 0.398 0.528 39.845
Clean Tech 53.436 2.380 0.123 1.654E+23
Elec. Ind. 0.066 0.004 0.947 1.068
Retail Ind. 0.907 0.527 0.468 2.476
GRI 0.922 1.118 0.290 2.514
Environmental Pages
0.035 1.150 0.284 1.035
Constant -0.710 0.330 0.566 0.492
Model Chi-Square = 13.832 (df = 7, sig. = .054). Model correctly categorizes 68% of companies.
Coefficient Estimations for Newsweek’s Green Rankings
VariableCoefficient
Est.SE Sig.
Constant 67.988 3.537 0.000
Pollution Prevention -24.811 12.971 0.065
Prod. Stew. 15.618 18.592 0.408
Clean Tech 23.924 56.685 0.676
Elec. Ind. 10.854 2.965 0.001
Retail Ind. 7.899 3.735 0.043
Environmental Pages 0.176 0.076 0.028
GRI 4.488 2.679 0.028
Adjusted R Sq. - .519,
Most discussions surround lowest-tier Pollution Prevention
DJSI is a weak measure of reputation
CSR content is related to third-party ranking
Amount of env. info positively related to reputation
Use of GRI guidelines can improve NGR ranking
Mixed results of hypotheses◦ Indicates that reputation and legitimacy are not yet
institutionalized
Future research could expand to more recent CSR and broaden breadth of companies.◦ Provide longitudinal example of changes and make
more robust sample
Testing across different theoretical frameworks
Background
Empirical Environment and Approach
Content Analysis of Sustainability Reports
Results and Discussion
Conclusion
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