Determinants of Sustainability Reporting a Review of Results, Trends,

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academic interest as well. Nevertheless, the literature is still limited

in quantity and no major reviews of the latest developments have

been presented so far.

There have been some recent attempts to examine the eld of

sustainability-related reporting. However, they were mainly con-

ducted from a specic focus on accounting (not reporting) issues

(Berthelot et al., 2003; Burritt and Schaltegger, 2010; Deegan and

Soltys, 2007; Lee and Hutchison, 2005; Owen, 2008; Parker,

2005; Spence et al., 2010). These reviews are limited for three

additional reasons: They did not disclose a rigorous method of

literature review (Burritt and Schaltegger, 2010; Lee and Hutchison,

2005; Owen, 2008; Parker, 2005; Spence et al., 2010), they are

restricted to very few (usually accounting) journals or even articles

(Burritt and Schaltegger, 2010; Deegan and Soltys, 2007; Owen,

2008; Parker, 2005) and/or they specically focused on single is-

sues (Berthelot et al., 2003; Deegan and Soltys, 2007; Lee and

Hutchison, 2005). Beyond accounting journals, only two other re-

views could be found. Starting with literature from the 1970s,

Fifka (2013) reviews empirical research on corporate social re-

sponsibility (CSR) reporting and examines whether researchers

from different regions apply different methodological approaches

and therefore come to different results. Fifka (2012) aims at

providing insight into the chronological development and charac-teristics of empirical research on sustainability-related reporting in

the last 40 years. In contrast to the latter two, we will specically

investigate contemporary empirical and conceptual research

starting with the year 1999 when the rst version of the GRI sus-

tainability reporting guidelines was published. By conning to

more recent scientic publications on sustainability reporting

dating from 1999 to 2011, our review is not inuenced by historical

changes in the corporate and societal environment. Instead it

provides an up-to-date portrait of today’s research landscape of

sustainability and CSR reporting. To achieve this, a structured

search for literature was conducted.

We contribute to literature by answering the question “what are

general trends and relations in extant literature?” We specically

distinguish factors which inuence the adoption, the extent, andthe quality of reporting because these proved to be the main

themes in contemporary studies. We identify the few determinants

(most notably company’s size, visibility, and sector-af liation) that

are covered by a signicant amount of studies and show consistent

results which allow clear conclusions. Furthermore, we contribute

by offering detailed insights on (in)consistencies with regard to

other determinants such as protability or indebtedness. Based on

our ndings, we provide a detailed link to theory which is often

missing or only rudimentary existing in extant research

(Hooghiemstra, 2000; Spence et al., 2010). Specically, we discuss

the usability and potential contribution of legitimacy, stakeholder,

signaling, and institutional theory for future research. Finally, we

contribute by introducing a set of potential research themes by

providing an overview over gaps and underexposed themes inextant research especially on the inuence of managerial attitudes

and culture, regulation and governance, and in relation to the

quality of sustainability reporting.

The paper is structured as follows: First, the research method-

ology as well as the basic terminology is described. Then a

descriptive analysis of extant literature is provided considering the

distribution of papers over time, the addressed sustainability di-

mensions, the publication outlets, and the methodological ap-

proaches. To illustrate the current state of knowledge we will then

specically address determinants of sustainability reporting and

discuss the main research ndings. We continueby providing an in-

depth link to theory and by portraying signicant gaps in current

research to illustrate opportunities and challenges for future

research before concluding the paper.

2. Research method

A literature review aims at revealing trends, relations, in-

consistencies, and gaps in the literature in order to organize and

evaluate existing work in a particular eld. Before we turn to the

specic methodological issues we will delineate the basic termi-

nology to establish understanding of the concepts involved (2.1).

For conducting the review we followed the approach suggested by

Fink (2010): In the rst step, we selected our research questions,

databases, as well as search terms (2.2). Secondly, we used practical

screening criteria to include or exclude studies from the review

(2.3). In the third step, we developed and applied methodological

screening criteria in order to analyze a study’s content (2.4). Finally,

we synthesized and assessed our ndings (Sections 3e5).

2.1. Basic terminology

In the following, we will set the stage by picturing a framework

of basic terminology and concepts (see Fig. 1).

The initial starting point for any considerations on sustainability

or CSR reporting lies in the overarching (normative) concepts of

sustainability and CSR. To provide a distinct reference point weadopt the latest denition of CSR by the European Commission

which regards CSR as “the responsibility of enterprises for their

impacts on society . to integrate social, environmental, ethical,

human rights and consumer concerns into their business opera-

tions and core strategy” (European Commission, 2011: 6). Quite

similarly, ISO 26000da worldwide standard for social responsibi-

litydcharacterizes social responsibility as “responsibility of an or-

ganization for the impacts of its decisions and activities on society

and the environment, through transparent and ethical behaviour”(International Organization for Standardization, 2010: 3) while

directly referring to the maximization of the contribution to sus-

tainable development as the “overarching objective for an organi-

zation” (p. 10).2 These characterizations provide direct links to

sustainability thinking. Following the historical characterization of the World Commission on Environment and Development, which

puts intra- and intergenerational justice in the middle of thinking,

Dyllick and Hockerts (2002: 131) dene corporate sustainability as

“meeting the needs of a rm’s direct and indirect stakeholders .,

without compromising its ability to meet the needs of future

stakeholders as well”. To achieve this goal, companies need “to

maintain their economic, social and environmental capital base”(Dyllick and Hockerts, 2002: 132) which directly refers to

Elkington’s (1997) triple-bottom-line (TBL) thinking. Lozano and

Huisingh (2011) present an even more holistic perspective on

sustainability by explicitly including a fourth time-dimension

focusing on “short-, long- and longer-term perspectives.” They

propose that there are dynamic and simultaneous interrelations

within and between the TBL dimensions, not only at certain points

in time but also over time. In sum, all four dimensionsdincluding

the timedinterrelate at equilibrium. As can be seen from these

characterizations, sustainability and CSR gradually converge (Hahn,

2011) and thus this literature review considers sustainability

(reporting) and CSR (reporting) as consistent concepts.

Based on such a normative grounding, the specic corporate

performance in the area of sustainability and CSR is measured by

means of sustainability accounting. Sustainability(-related) ac-

counting comprises those information management and

2 Here again, the different focus on “organizations” in general (as by the Inter-

national Organization for Standardization) and on “companies” in particular (as by

the European Commission) come to the fore. See again Footnote 1 for our

perspective on the interchangeable use of both terms.

R. Hahn, M. Kühnen / Journal of Cleaner Production xxx (2013) 1e17 2

Please cite this article in press as: Hahn, R., Kühnen, M., Determinants of sustainability reporting: a review of results, trends, theory, andopportunities in an expanding eld of research, Journal of Cleaner Production (2013), http://dx.doi.org/10.1016/j.jclepro.2013.07.005


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accounting methods which aim at the creation of high quality data

supporting internal decision-making concerning corporate sus-

tainability. On the basis of reliable accounting data, sustainability-

related reporting then provides and substantiates information

about the status and progress of corporate sustainability towards

internal and external stakeholders through formalized means of

communication (Schaltegger et al., 2006). Although sustainability-related accounting and reporting have received increasing rele-

vance in business and academia, our focus is on the latter since the

disclosure and the internal/external communication of sustain-

ability information directly contribute to a company’s supply of

critical resources from various stakeholders (Herzig and

Schaltegger, 2006; Deegan, 2002). In this respect, sustainability

accounting makes an indirect contribution because it primarily

aims at the internal measurement of organizational sustainability

performance (Lamberton, 2005), thus serving as a foundation of

sustainability reporting.

Current sustainability-related reporting practice is primarily of

voluntary nature so that companies are exible in experimenting

with disclosing information (Chen and Bouvain, 2009). In light of

this discretionary latitude, corporate reporting practice has led toan abundance of labels for recent reports (e.g., Corporate Citizen-

ship Report, Corporate (Social) Responsibility Report, Sustainable

Development Report, Sustainable Value Report, and Sustainability

Report) which also points to the above mentioned similarities of

sustainability and CSR as normative concepts. This is not surprising

given the abundance of efforts to characterizeany of the mentioned

terms (see, e.g., Dahlsrud, 2008) and we acknowledge this ambi-

guity by relying on an extensive keyword search as described

below. There is an increasing trend towards multidimensional

reporting (Kolk, 2010) and recently even integrated reporting

(which integrates sustainability information together with tradi-

tional nancial information in a single report to provide a holistic

picture of value creation over time) (KPMG, 2011; Integrated

Reporting Committee of South Africa, 2011). Nevertheless,

one-dimensional reporting (e.g., Environment Reports, Financial

Reports) still remains existent. However, only those reports

that simultaneously include all three dimensions of sustainability

can truly be regarded as “sustainability reporting” while one-

dimensional reports are merely sustainability-related because

they cover only isolated aspects of sustainability. In this sense, so-

called “sustainability reports” also often exclude important as-pects especially from the economic pillar which are usually dis-

closed in separate annual reports.3

The literature on sustainability reporting mirrors this termino-

logical inconsistency. This might be the case because sustainability

reporting guidelines tend to create compartmentalization among

the dimensions of sustainability while overlooking inter-linkages

(Lozano and Huisingh, 2011; Lozano, 2013). Here again, the rele-

vance of the GRI guidelines as a de facto standard guiding the design

of sustainability reports comes to the fore. The guidelines cover all

the mentioned labels for respective reports and offer a unilateral

standard for non-nancial reporting which can be voluntarily used

by the issuers of the respective reports to achieve certain stan-

dardization in the eld. The GRI as a network of experts from

different stakeholder groups thus aims at providing a “globallyshared framework of concepts, consistent language, and metrics” to

“communicate clearly and openly about sustainability” (GRI, 2011b:

3). However, the GRI has a focus on environmental and social issues

while covering only few and rather general economic indicators

leaving more detailed and pronounced rules for reporting on eco-

nomic issues to existing regulatory frameworks for nancial

reporting (e.g., US GAAP, IFRS).

Sustainability Corporate Social Responsibility

• Triple Bottom Line

• Intra- and Intergenerational Justice

• Inter-linkages among the TBL- and

time-dimensions at equilibrium

(Four-Dimensionality)

(Corporate Responsibility, Corporate

Citizenship)

Accounting related to Sustainability (CSR)

Reporting related to Sustainability (CSR)

in the form of covering

- Integrated reports Three sustainability dimensions(financial, ecological, and social at

equilibrium)

- Specialized sustainability, CSR,

corporate citizenship etc. reportsTwo sustainability dimensions(focus on ecological and social; financial

rather neglected)- Isolated environmental or social

reportsOne sustainability dimension(ecological or social)

N o r m a t i v e

r e f e r e n c e a n d

s t a r t i n g p o i n t

I n t e r n a l

p e r f o r m a n c e

m e a s u r e m e n t

E x t e r n a l

i n f o r m a t i o n

d i s c l o s u r e

Focus of

literature review

holistic

isolated

E x t e n

t o f s u s t a i n a b i l i t y

c o

n s i d e r a t i o n s

=

Fig. 1. Overview and relations of basic concepts and terminology relating to sustainability reporting.

3 For the sake of consistency, we will from now on use the term “sustainability

reporting” when referring to reporting activities that are related to sustainability-

issues since we assume such disclosure to be part of sustainability reporting ac-

tivities even if they do not cover the entire range of sustainability dimensions in a

single report.




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2.2. Selecting research questions, databases, and search terms

Our rst objective was to present an overview of the current

state of research on sustainability reporting. We aimed at

answering the question of what are general trends and relations

and which (in)consistencies in the results can be identied, and we

searched for any major research gaps. After reviewing about one-

third of the literature, we found that a signicant proportion of

studies focused on determinants of sustainability reporting. We

inductively rened our aim to identify what determinants are

examined in the literature and again searched for (in)consistencies

and gaps.

We selected the Web of Knowledge database because of the

extensive coverage of Anglophone peer-reviewed journals from

business, management, and accounting. The database includes all

journals with an impact factor which are (supposedly) the most

important outlets in the eld covering 2474 journals across 50

disciplines (Thomson Reuters, 2012) including business (113 jour-

nals), nance and accounting (85 journals) and management (172

journals). To achieve an even broader coverage of journals we

complemented our search by also using the ScienceDirect database

which covers more than 2500 journals, including 123 related to

business, management and accounting (Elsevier, 2012). In order tocover the research eld exhaustively, an extensive search using the

following keywords was conducted: “Global Reporting Initiative”,

“GRI”, “social report*”, “environment* report*”, “sustainab*

report*”, “CSR report*”, “responsib* report*”, “non-nanc* report*”,

“TBL report*”, “triple* report*”, “integr* report*”. The keywords

were previously identied and discussed by the two researchers.

2.3. Applying practical screening criteria

The time period was set from 1999 to 2011. The starting year

was chosen due to the triggering effect of the introduction of the

GRI guidelines. According to Kolk (2010: 370) “the emergence of

sustainability reports mirrors the development in the

eld of voluntary standard-setting where the multi-stakeholder Global

Reporting Initiative launched its rst sustainability reporting

guidelines in 1999”. Vormedal and Ruud (2009: 209) regardthe GRI

as “the most important driver” inuencing the growth of sustain-

ability reporting. We restricted our search to papers written in

English. We accepted empirical and conceptual publications.

Following the example of other recent literature reviews (e.g.,

Seuring and Müller, 2008; Stechemesser and Guenther, 2012; Kolk

et al., 2013), we excluded book reviews, editorial notes and

comments.

In April 2012,4 the last search was conducted resulting in an

overall body of 265 peer-reviewed articles. Each article was

screened in order to assess whether its content was essentially

relevant with regards to sustainability reporting. To increase reli-

ability of the research, the individual papers were checked by both

researchers. This process resulted in 178 (¼n) papers of essential

relevance included in the following review.

2.4. Applying methodological screening criteria

According to Brewerton and Millward(2001), a literature review

can be methodologically considered as content analysis, which can

be used quantitatively (e.g., to assess descriptive aspects) and

qualitatively (e.g., to evaluate content criteria). Similar, for example,

to Seuring and Müller(2008), we applied the generic process model

by Mayring (2010) containing four steps of a content analysis:

(1) Material collection: The rst step deals with the denition and

delimitation of the material to be collected (see 2.2 and 2.3).

Furthermore, we dene the single article as the unit of analysis.

(2) Descriptive analysis: Assessing formal aspects of the material

serves as the basis of the subsequent theoretical analysis.

Therefore, the bibliographic data of each publication were

recorded. The content of the papers was further assessed with

regard to the descriptive criteria highlighted in Section 3.

(3) Category selection: Structural dimensions are selected, forming

the major topics of the content analysis. We independently

searched the literature for recurring patterns in research. These

patterns were used to inductively identify structural categories

as the major topics of analysis from the material. After

reviewing about one-third of the literature, we found that a

signicant proportion of studies focused on factors deter-

mining the adoption, extent, and (to a lesser extent) quality of

sustainability reporting. Therefore, we inductively rened our

aim to identify what determinants are examined in the litera-

ture. Consequentially, we asked the following questions for the

selection of our structural categories (which were also used tocode the data): Which determinants inuencing the adoption,

extent, and/or quality of sustainability reports are addressed?

What kind of inuence (positive/negative/none) do these de-

terminants exert on the adoption, extent, and/or quality of

sustainability reports? Additionally, we searched for further

topcis, (in)consistencies, and gaps in the literature.

(4) Material evaluation: In the nal step, the whole material is

scrutinized according to the structural categories allowing the

identication of relevant themes and interpretation of ndings.

The underlying approach thus was a hermeneutic and iterative

process including multiple interplays of critically reecting the

data, searching for research patterns, and questioning and

rening the categories for reviewing the literature.

The synthesis of our ndings as nal step of a systematic liter-

ature review process (Fink, 2010) is presented in the following

chapters.

2.5. Limitations and rigor of the research process

The research process and the related qualitative methodology

are not without limitations. According to Saunders et al. (2012)

objectivity can be achieved by avoiding (conscious) bias and sub-

jective selection during the research process. To ensure objectivity,

we adhered to a systematic and structured process as illustrated

above. A limitation can be seen in the selection of databases.

However, relying on two major databases should ensure a broad

range of articles. Conning the search process to Anglophone ar-ticlescan also be regarded as limitation. Nevertheless, English is the

dominant language used in management and accounting research

so that it is unlikely that we missed major ndings due to language

issues. Furthermore, while we argue that a period of 13 years is a

substantial basis from which we draw our conclusions, we

acknowledge that studies have been published before 1999, the

starting year for our review.

Validity can be considered as the extent to which a research

method accurately measures what it intends to measure (Saunders

et al., 2012). We aimed for validity by following the specic

guidelines of Fink (2010) because they have already been used to

conduct literature reviews by various researchers (e.g., Seuring and

Müller, 2008; Stechemesser and Guenther, 2012). Therefore, we

deemed these guidelines suitable and valid for conducting a

4 This date was chosen to include all relevant papers from 2011 that might have

been added with a certain time lag to the databases.




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literature review. Furthermore, selecting the Web of Knowledge

database particularly contributes to validity due to its extensive

coverage of high-impact peer-reviewed journals because concen-

trating on peer-reviewed articles is deemed benecial with regards

to validity (Podsakoff et al., 2005).

Reliability is achieved if a research method repeatedly (consis-

tently) generates the same results on other occasions or if other

researchers draw the same conclusions from the raw data

(Saunders et al., 2012). We addressed reliability by including two

researchers in the analysis. While this is admittedly a minimum

requirement, an inclusion of further researchers was deemed un-

realistic due to the time consuming process.

Generalizability describes the extent to which research ndings

can be transferred to settings other than the original research

setting (Saunders et al., 2012). Although we aimed for generaliz-

ability of our ndings by applying an extensive keyword search

using two major databases thus covering the eld exhaustively, we

do not claim that our ndings can be generalized beyond the

reviewed literature body.

3. Descriptive analysis

108 articles were published in journals related to business ethics

or social, environmental, and sustainability topics; 35 by journals

from the accounting and nance discipline; another 35 in journals

from the area of general business and management or in other

specialty journals. Only seven journals published ve or more ar-

ticles (Journal of Business Ethics (28), Corporate Social Re-

sponsibility and Environmental Management (18), Journal of

Cleaner Production (12), Business Strategy and the Environment

(9), Critical Perspectives on Accounting (9), Australian Accounting

Review (5), Environmental Management (5)). Overall, the distri-

bution reects the broad acceptance of sustainability reporting

across journals covering a variety of topics.

3.1. Distribution over time and sustainability dimensions

Fig. 2 illustrates the distribution of publications according to

sustainability dimensions.5 The number of papers increased

continuously over the years. Interestingly, despite the existence of

social and environmental reporting in the 1970/80s (e.g., Fifka,

2012; Kolk, 2010), the growth of sustainability reporting in the

new millennium seems to have invigorated the entire eld of

research. Three signicant increases of publications (in 2003, 2008

and 2011) follow respective updates of the GRI guidelines (G2-

version in 2002, G3-version in 2006 and G3.1-version in early

2011).

Five categories were used to classify the papers. Only twelve

papers (w7%), summarized in the category “social”, explicitly

address reporting on social aspects (i.e., human resources, labor

practices, occupational health and safety, child labor, human rights,community impacts, customer safety). The “environmental” cate-

gory encompasses 50 papers (w28%) that address reporting on

environmental issues (i.e., climate change, greenhouse gas emis-

sions, environmental management practices). Apart from some

uctuations, the number of articles focusing on the environmental

dimension stagnates since 2007. In contrast, the number of papers

addressing double bottom line issues (DBL, i.e., integrating social

and environmental aspects) in sustainability-related reporting has

increasedcontinuously.In sum, we counted 64 DBL oriented papers

(w36%). From a conceptual perspective, however, all papers that

either cover only one dimension of sustainability (environmental or

social) or that study DBL aspects in sustainability-related reporting

technically fall short of a holistic view on sustainability reporting

since they exclude the economic pillar.

The articles that deal with truly integrated sustainability

reporting (including

nancial aspects) were marked as“

TBL ”

(triplebottom line). Taking into account that such integrated reporting is

still in its infancy (KPMG, 2011), it is remarkable that many re-

searchers claim to address reporting from a TBL perspective. A

closer look reveals that most of them actually use the term “TBL ”merely as a “buzzword”. Only four papers (w2%) truly address as-

pects of integrated TBL reporting (Adams and Simnett, 2011;

Azapagic, 2004; Lewis, 2011; Lozano and Huisingh, 2011). Others,

however, focus heavily on environmental and social issues instead

of addressing integrated reporting or inter-linkages between all

three dimensions of sustainability (e.g., Archel et al., 2008;

Husillos-Carqués et al., 2011; Kent and Monem, 2008; Skouloudis

et al., 2009). Consequentially we categorized them as DBL. One

reason for a largely missing TBL orientation in both practice and

research might be that sustainability reporting guidelines such as

the GRI guidelines still tend to address the economic, environ-

mental, and social dimensions of sustainability in isolation from

each other, thus creating compartmentalization and disregarding

synergies and inter-linkages among the dimensions (Lozano and

Huisingh, 2011; Lozano, 2013). The remaining 48 papers (w27%)

discuss further “other” issues such as assurance and stakeholder

engagement in relation to sustainability reporting so that they do

not specically relate to any sustainability dimension.

3.2. Distribution according to research methods

The methodologies applied by the reviewed papers are depicted

in Fig. 3. They can be divided into non-empirical6 and empirical

approaches. Empirical studies consist of document analyses, in-

terviews, surveys, models, and experimental studies.

Non-empirical papers account for approximately 27% of the

relevant literature. From the empirical studies, only document

analyses show a signicant increase over time (w58% of the overall

literature body). The rest of the studies include interview tech-

niques (w6%), surveys (w4%), estimation models (w4%), and

experimental designs (w1%). The dominance of document analyses

implies a neglect of more exploratory and conrmatory

Fig. 2. Distribution of literature over time and sustainability dimensions.

5 The economic dimension was not separately examined since we assumed it to

be covered in research on

nancial reporting.

6 Of the non-empirical papers only one classies as a literature review (Spence

et al. (2010)). All others are conceptual papers. The review articles mentioned in

the introduction were not identied by our search since they were not covered by

our keywords (i.e., not referring to reporting but rather to accounting), in two cases

date from after 2011, or were not included in the databases.




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approaches, such as interviews, surveys, and experimental studies

and warrants a closer look. The number of document analyses

increased considerably over the years. This goes along with the rise

in published sustainability reports (GRI, 2011a) providing easy ac-

cess to an abundance of data, which explains the popularity of this

research method from a practical perspective. Fig. 4 provides an

overview of investigated media in document analyses. Theincreasing usage of stand-alone sustainability reports is consistent

with ndings by Kolk (2010) stating that, while in 1999 no report

could be referred to as a sustainability report (but rather as isolated

social or environmental report), it is now the dominant form of

sustainability-related reporting. However, annual reports still

belong to the most widely-analyzed media. This may be due to the

increasing integration of environmental and social aspects into

annual nancial reports since the mid-1990s and the ongoing

establishment of integrated reporting (Daub, 2007). Furthermore,

annual reports can be considered relatively standardized and

institutionalized (Hanson and White, 2003), thus facilitating

research. Websites are increasingly addressed which reects a

growing popularity of this reporting format (Holder-Webb et al.,

2009). Codes of conduct and press releases used as complemen-

tary sources of information in some studies can be considered to be

of minor importance for researchers.

4. Findings on determinants of sustainability reporting 7

Research on the variables affecting the adoption of sustainability

reporting mainly deals with the decision or likelihood to engage in

reporting. Research on the extent of reporting generally addresses

the volume or amount of reporting (i.e., the quantity of disclosed

information based on keyword-, sentence- or page-counts in order

to identify major themes discussed in sustainability-related re-

ports). Research on the determinants of the quality investigates, for

example, the provision of information ranging from rather narra-

tive and descriptive disclosure (i.e., “soft”

information which is noteasily veriable such as strategy claims) to specic, quantiable,

and monetary data (i.e., “hard facts” and objective data such as

quantitative performance indicators) and thus asks for the kind of

information being conveyed.

4.1. Internal determinants of sustainability reporting

The following paragraph illustrates ndings on internal de-

terminants of sustainability reporting. This encompasses issues of

corporate size and nancial performance (4.1.1), social and envi-

ronmental performance (4.1.2), and ownership structure (4.1.3).

4.1.1. Corporate size and nancial performance

Table 1 gives an overview of the most frequently investigateddeterminants in terms of corporate size and nancial performance.

Corporate size (measured by total assets, turnover, sales, number of

employees, or market capitalization) can be considered to have a

positive effect on the adoption and extent of sustainability

reporting, assuming that larger companies cause greater impacts,

become more visible, and therefore face greater stakeholder scru-

tiny and pressure (e.g., Fortanier et al., 2011; Gallo and Jones

Christensen, 2011). Furthermore, small companies might have

higher marginal costs of disclosure (e.g., Haddock, 2005). Empirical

results widely support this thinking. When turning to a company’s

nancial performance, research frequently assumes protability

(measured by market returns, return on assets, or return on equity)

to increase the ability and exibility of a company to bear the costs

of sustainability reporting and/or to cope with the consequences of disclosing potentially damaging information (e.g., Cormier and

Magnan, 2003; Haniffa and Cooke, 2005; Kent and Monem,

2008). Empirical results, however, are rather mixed. A high level

of indebtedness, leverage, or gearing can be assumed to decrease

the ability andexibility of a company to bear the costs of reporting

and/or face the consequences of disclosing potentially damaging

information (e.g., Cormier and Magnan, 2003; Stanny and Ely,

2008). However, Haniffa and Cooke (2005) also argue that sus-

tainability reporting might be used to legitimize corporate activ-

ities toward creditors and shareholders, thus providing incentives

to engage in reporting. Empirical research on this determinant

provides contradictory results.

Four other variables are also used as proxies for nancial per-

formance. However, they received far less academic attention. Re-sults are ambiguous for all.

First, a higher market-to-book value (or Tobin’s q) could imply a

higher level of information asymmetry between a company and its

investors regarding intangible assets, and future growth prospects

may foster reporting activities in order to help investors to predict

future incomes, thereby reducing capital costs. Only Prado-Lorenzo

et al. (2009b) indicate a positive association between a company’s

market-to-book value and the extent of reporting. Others deny a

signicant relation to its adoption (Stanny and Ely, 2008), extent

(Clarkson et al., 2011), and quality (Clarkson et al., 2008, 2011).

Second, high capital intensity could also be considered to

coincide with more extensive sustainability reporting, assuming

companies want to signal the newness of assets and technologies

and related reductions of environmental impacts such as

Fig. 4. Types of media analyzed by document analysis. A single paper may analyze

multiple types of media. Therefore, the numbers might be higher than the number of

empirical papers in each year. Separate reports include social or environmental reports.

Fig. 3. Distribution according to research methods.

7 Some papers specically focus on environmental reporting. Most, however,

analyze a more extensive sustainability reporting. Due to our overarching focus on

sustainability reporting, we will report on both aspects together.




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Table 1

Overview of most frequently examined internal determinants of sustainability reporting.a

Determinant Dependent

variable

Authors Conclusion

Corporate size Adoption Brammer and Pavelin, 2006 (þ)

Gallo and Jones Christensen, 2011 (þ)

Haddock, 2005 (þ)Haddock and Fraser, 2008 (þ)

Kent and Monem, 2008 (þ)

Stanny and Ely, 2008 (þ)

Nikolaeva and Bicho, 2011 (o)

Positive inuence widely acknowledged

Extent Amran and Haniffa, 2011 (þ)

Clarkson et al., 2008 (þ)


Cormier et al., 2004 (þ)

Cormier and Magnan, 2003 (þ)


Da Silva Monteiro and Aibar-Guzmán, 2010 (þ)

Fortanier et al., 2011 (þ)

Gallo and Jones Christensen, 2011 (þ)

Gamerschlag et al., 2011 (þ)

Groves et al., 2011 (þ)

Haniffa and Cooke, 2005 (þ)

Holder-Webb et al., 2009 (þ)

Parsa and Kouhy, 2008 (þ)

Prado-Lorenzo et al., 2009b (þ)

Sotorrío and Sánchez, 2010 (þ)

Tagesson et al., 2009 (þ)

Papaspyropoulos et al., 2010 (o)

Prado-Lorenzo et al., 2009a ()

Positive inuence widely acknowledged

Quality Brammer and Pavelin, 2006 (þ)



García-Sánchez, 2008 (þ)

Morhardt Emil, 2010 (þ)

Vormedal and Ruud, 2009 (o)

Positive inuence acknowledged

Financial

performance

Protability Adoption Brammer and Pavelin, 2006 (o)

Kent and Monem, 2008 (o)

Stanny and Ely, 2008 (o)

No signicant inuence found but

research still scarce

Extent Cormier and Magnan, 2003 (þ)


Haniffa and Cooke, 2005 (þ)Sotorrío and Sánchez, 2010 (þ)

Tagesson et al., 2009 (þ)

Clarkson et al., 2008 (o)


Cormier et al., 2004 (o)

Da Silva Monteiro and Aibar-Guzmán, 2010 (o)

García-Sánchez, 2008 (o)

Prado-Lorenzo et al., 2009a (o)

Fortanier et al., 2011 (mixed)

Gamerschlag et al., 2011 (mixed)

Prado-Lorenzo et al., 2009b ()

Negative correlation seems to be unlikely;

inconclusive results do not allow for a

more pointed conclusion

Quality Brammer and Pavelin, 2006 (o)



Prado-Lorenzo et al., 2009a (o)

No signicant inuence found but research

still scarce

Indebtedness,

leverage, orgearing

Adoption Prado-Lorenzo et al., 2009a (þ)

Brammer and Pavelin, 2006 (

)Kent and Monem, 2008 (o)

Stanny and Ely, 2008 (o)

Indifferent results; research still scarce

Extent Clarkson et al., 2008 (þ)

Parsa and Kouhy, 2008 (þ)

Cormier and Magnan, 2003 ()

Cormier and Magnan, 2004 ()

Sotorrío and Sánchez, 2010 ()


Cormier et al., 2004 (o)

Haniffa and Cooke, 2005 (o)

Prado-Lorenzo et al., 2009b (o)

Indifferent results

Quality Clarkson et al., 2008 (þ)

Brammer and Pavelin, 2006 ()


Indifferent results; research still scarce

a (þ) ¼ positive inuence of determinant on dependent variable. (o) ¼ no signicant inuence, () ¼ negative inuence, (mixed) ¼mixed results on different sub-aspects.




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greenhouse gas emissions. Only few empirical papers investigate

this relation providing mixed results. Stanny and Ely (2008) deny a

signicant effect on the adoption of reporting, while Clarkson et al.

(2008) and Clarkson et al. (2011) point to a positive inuence on

the extent and quality of reporting. Fortanier et al. (2011) nd no

signicant effect on the level of sustainability reporting.

Third, reporting may be positively inuenced by nancing ac-

tivities on the capital market. Companies trying to raise capital

may consider sustainability reporting as a means to reduce infor-

mation asymmetry between a company and its investors, thereby

also lowering costs of capital. Cormier and Magnan (2003) and

Clarkson et al. (2008) nd a positive effect on the extent or quality

specically of environmental reporting, whereas Clarkson et al.

(2011) and Cormier and Magnan (2004) indicate no signicant

inuence.

Fourth, Cormier and Magnan (2004) argue that a higher sys-

tematic risk (beta or stock price volatility) as a consequence of an

unstable economic performance decreases the ability of a company

to bear the costs of reporting, and therefore predict a negative ef-

fect on the level of reporting. Cormier et al. (2004), Cormier and

Magnan (2003, 2004) generally conrm this while Clarkson et al.

(2008) and Clarkson et al. (2011) nd no signicant inuence on

the extent and quality of reporting.

4.1.2. Social and environmental performance

Comparably little attention has been paid to the inuence of

social and environmental performance which is usually measured

by the number of nes for environmental transgressions, by actual

pollution discharge data, or by assuming that sustainability per-

formance is mirrored by certain indices such as the Dow Jones

Sustainability Index. On the one hand, companies may want to

signal good performance, implying a positive effect on reporting.

Alternatively, companies with a weaker performance may face

greater stakeholder pressure, thus they may be more actively

engaged in reporting to mitigate legitimacy threats which implies

a negative relation between performance and sustainability

reporting. Research results are again inconsistent. Some studiesnd a positive effect of performance on the adoption (Belal and

Cooper, 2011; Nikolaeva and Bicho, 2011) or extent of reporting

activities (Clarkson et al., 2008), whereas others (Clarkson et al.,

2011; Brammer and Pavelin, 2006) indicate that worse perfor-

mance leads to a higher extent of reporting. The latter study by

Brammer and Pavelin (2006), however, simultaneously nds no

signicant effect on the adoption of reporting and Prado-Lorenzo

et al. (2009b) do not nd a signicant effect on the extent . In

sum, research points to a signicant but ambiguous effect of social

and environmental performance on reporting activities. All papers

pay more attention to environmental rather than social perfor-

mance which may be due to dif culties in assessing social

performance.

Finally, the age of a company’s assets is also used as a variable

related to sustainability (especially environmental) performance.

Assuming that stakeholders might link older xed assets (e.g.,

plants and equipment) with a higher environmental pollution

level, a company with young assets has the incentive to report

proactively. Again, empirical evidence offers mixed results. Stanny

and Ely (2008) indicate a negative association between asset age

and the decision to disclose environmental information, whereas

Clarkson et al. (2008) and Cormier and Magnan (2004) nd a

positive relation to the extent of environmental reporting. Three

other studies do not nd a signicant relation (Clarkson et al.,

2011; Cormier et al., 2004; Cormier and Magnan, 2003). Only

two papers examine the effect on the quality of environmental

reporting, revealing similarly inconsistent results (Clarkson et al.,

2008, 2011).

4.1.3. Ownership structure

Some limited research endeavors address several ownership

variables such as a company’s listing on the stock market, gov-

ernment ownership, concentrated or dispersed ownership, and

foreign ownership.

Publicly listed companies can be considered to be more actively

engaged in reporting in order to comply with certain regulations,

adopt good practice by competitors, and/or cope with stakeholder

pressure. Haddock (2005) nds that a company’s listing on the

stock market is associated with a higher adoption of reporting

practices. Furthermore, listed companies disclose a higher level of

sustainability-related information (Da Silva Monteiro and Aibar-

Guzmán, 2010; Gamerschlag et al., 2011; Haniffa and Cooke,

2005). Moreover, Amran and Haniffa (2011), Gallo and Jones

Christensen (2011), and Tagesson et al. (2009) indicate that state-

owned companies and/or government shareholding is associated

with a higher extent of sustainability reporting assuming that the

respective organizations are subject to more stringent reporting

requirements and scrutiny, or because they are supposed to set a

good example. Due to the limited number of studies, one cannot

draw denite conclusions on the inuence of a company’s listing on

the stock market or on the inuence of state ownership.

Concentrated ownershipd

often assumed if an investorowns more than 20% of the outstanding voting sharesdcan be

considered to impede sustainability reporting since dominant

shareholders are supposed to already have access to relevant in-

formation. In contrast, a dispersed ownership structure increases

the need to reduce information asymmetry. Brammer and Pavelin

(2006) indicate that the adoption and quality of reporting is

negatively inuenced by a concentrated ownership structure.

Cormier and Magnan (2003), Cormier and Magnan (2004), and

Gamerschlag et al. (2011) nd the same for the extent of reporting

activities. Others, however, nd no signicant correlation (Stanny

and Ely, 2008 for the adoption, and Ertuna and Tukel, 2010;

Tagesson et al., 2009 for the extent) while only one study (Prado-

Lorenzo et al., 2009a) states a positive inuence on the adoption

of the GRI guidelines.Finally, foreign shareholders might have dif culties obtaining

relevant information from alternative information sources, which

induces the need to reduce information asymmetry in case of

foreign ownership. Three studies indicate a positive inuence of

foreign ownership on the level of sustainability reporting (Cormier

and Magnan, 2003, 2004; Haniffa and Cooke, 2005), whereas two

others show no signicant effect (Da Silva Monteiro and Aibar-

Guzmán, 2010; Ertuna and Tukel, 2010).

4.2. External determinants of sustainability reporting

Research on the external determinants of sustainability

reporting mainly covers aspects of corporate visibility (4.2.1) or

sector af liation, country-of-origin, and legal requirements (4.2.2).

4.2.1. Corporate visibility

Literature uses media exposure, the supply chain position, and

brand-related aspects as proxies for corporate visibility. When

looking at media exposure (for example measured by the number

of news articles related to a company), companies may start sus-

tainability reporting or increase the depths of their disclosure in

order to mitigate reputational risks of bad press and exploit

possible benets of good press. Literature on this determinant is

summarized in Table 2.

Apart from media exposure, direct interaction with consumers

may lead to high corporate visibility (Groves et al., 2011) sothat the

supply chain position can also be considered a determinant of

sustainability reporting. Business-to-consumer companies are




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10/17

reporting. However, we can cautiously note that research tends to

conrm a positive effect of capital intensity, a company’s listing on

the stock market, government ownership, and foreign ownership

on sustainability reporting. On the other hand, a company’s sys-

tematic risk and concentrated ownership structure seem to impede

sustainability reporting. Furthermore, research tends to deny a

signicant effect of a company’s market-to-book value, nancing

activities on the capital market, and age of xed assets. Finally,

researchers provide rather inconsistent and ambiguous ndings

regarding protability and indebtedness.

5. Discussion of theoretical implications and research gaps

In the following, we provide a link to theory by proposing an

outline of a potential theoretical framework (5.1) before presenting

a set of possible future research streams on underrepresented areas

in extant research (5.2).

5.1. Linking results to legitimacy, stakeholder, signaling, and

institutional theory

At the beginning of the reviewed period, Hooghiemstra (2000)

argued that research on sustainability reporting is characterizedby diverse and inconsistent ndings due to a lack of a compre-

hensive theoretical reference point. More recently, Spence et al.

(2010) found that researchers describe stakeholder theory as the

dominant and most useful theory in explaining sustainability

reporting practice. However, they also explicitly point to the fact

that most studies refer to stakeholders in general, without explicitly

referring to stakeholder theory (or other theories). Our review

conrms this observation. The majority of literature does not refer

to any theory at all, while those studies adoptingdor at least

consideringda theory show indeed a preoccupation with stake-

holder theory (e.g., Belal and Roberts, 2010; Parsa and Kouhy, 2008;

Reynolds and Yuthas, 2008), legitimacy theory (e.g., Criado-

Jiménez et al., 2008; De Villiers and Van Staden, 2006; Haniffa

and Cooke, 2005), and to a certain extent also institutional theory(e.g., Chen and Bouvain, 2009; Fortanier et al., 2011; Rahaman et al.,

2004). Furthermore, these studies mostly refer to isolated theo-

retical reference points instead of more holistically embracing

different theoretical explanations with regard to sustainability

reporting. In the following, we propose a combination of different

theories to explain the ndings discussed above.

According to legitimacy theory, a company needs to have

legitimacy in the sense of a social “license to operate” (Deegan,

2002) to access the necessary resources to successfully conduct

business. Legitimacy theory suggests that no organization has an

inherent right to existbut that any business operation is subject to a

greater acceptance granted by society. Such legitimacy, however, is

potentially threatened if society perceives that a company is not

operating in an acceptable way. Accordingly, legitimation strategiesaim at securing legitimacy as a valuable resource itself (e.g.,

Dowling and Pfeffer, 1975; Ashforth and Gibbs, 1990; Suchman,

1995).

Furthermore, the acceptability of a company in society is

directly linked to stakeholder thinking which argues “that organi-

zations should be managed in the interest of all their constituents,

not only in the interest of shareholders.” (Laplume et al., 2008:

1153) In this sense, stakeholder theory suggests that businesses

have to take into account different perspectives and expectations of

a wide group of constituents having an interest in corporate ac-

tivities (Buchholz and Rosenthal, 2005; Laplume et al., 2008).

Freeman (1984) argues that managers need to recognize shifts in

the environment among internal and external stakeholders. The

recent trend to embrace sustainability issues in society can be

regarded as such a trend and Marshall et al. (2010: 478) even see a

“paradigm shift . that . incorporates a sustainability mandate,

refuting clearly the old thinking of limitless resources, unbounded

growth, and technologically derived solutions.” Other than tradi-

tional nancial reporting, which largely caters to shareholder’s

information needs, sustainability reporting (supposedly) offers

valuable information to a broader audience and thus helps to cater

to their information needs by offering explanations of how a

company answers to the societal call for sustainable business

conduct. It can be assumed that large numbers of (powerful)

stakeholders directly increase the need for these companies to

positively explain their business conduct. In this context, the

disclosure of sustainability-related information can be regarded as

an instrument to shape the perceived legitimacy of the company

(Campbell et al., 2003) which, in turn, builds the bridge to signaling

theory.

Signaling theory suggests that in situations of asymmetric dis-

tribution of information, one party tries to credibly convey infor-

mation about itself to a second party (Spence, 1973; Connelly et al.,

2010). The sustainability performance of a company can be regar-

ded as such asymmetric information since it is dif cult, for

example, for parties outside the company to gain credible infor-

mation on these aspects. Companies might want to reduce thisinformation asymmetry by proactively reporting on their

sustainability-related activities to ensure legitimacy. However,

whether or not the addressee perceives the given information as

plausible and trustworthy greatly inuences the potential effect

such signaling efforts have. In sum, a greater exposure to a large

number of (potentially powerful) stakeholders (and media

coverage) could inuence a company’s need to actively secure its

legitimacy by signaling sustainability efforts in respective reports.

As outlined above, the positive inuence of corporate size on the

adoption, extent, and quality of sustainability reporting is widely

acknowledged in previous research supporting the idea that

especially large companies which are exposed to a diverse set of

stakeholders feel the need to engage in signaling activities such as

sustainability reporting to secure their legitimacy in society. Simi-larly, the positive inuence of media exposure on the adoption and

extent of reporting is also often mentioned (albeit with a much

smaller focus in extant research) which directly points to the need

to engage in signaling. This exposure can also be assumed to be

positively related to corporate size as well as other factors (such as

sector-af liation) so that the cause-effect relationship between

media exposure and corporate size on the one hand and the three

mentioned theoretical anchors on the other hand remains some-

what ambiguous. Nevertheless, all three theories can indeed help

explaining the proliferation of sustainability reporting in the last

decade.

Less clarity, however, exists for aspects of institutional theory

which suggests that corporate activities do not necessarily follow a

business rationale but instead answer to the institutionalized ex-pectations of the environment (Meyer and Rowan, 1977). If this

would be the case for sustainability reporting, the adoption, extent,

and quality of sustainability reporting would gradually align due to

institutional isomorphisms (DiMaggio and Powell, 1983) instead of

being subject to other external determinants. Research so far,

however, produced mixed results on these aspects (compare, e.g.,

Chen and Bouvain, 2009 with Fortanier et al., 2011).

5.2. Underrepresented streams of researchd possible avenues for

future research

Beyond the focus on determinants of sustainability reporting

there seem to be some major shortcomings when turning to other

topics of potential interest. In the following we will highlight such




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gaps in literature by especially discussing issues of regulation and

governance (5.2.1) as well as reporting quality and stakeholder

perception (5.2.2). These aspects can at the same time be regarded

as a possible roadmap for future research.

As a general remarkwe noticed that there isa strong focus in the

reviewed literature on large and multinational enterprises. Merely

eleven papers address small and medium-sized enterprises and

only three of them (Borga et al., 2009; Fassin, 2008; Parsa and

Kouhy, 2008) do so exclusively. Similarly, only few papers even

partially address sustainability reporting by non-prot organiza-

tions such as public authorities and NGOs (Dumay et al., 2010;

Guthrie and Farneti, 2008; Johansen, 2010; Lozano, 2006; Mussari

and Monfardini, 2010; Rahaman et al., 2004).

5.2.1. Research regarding regulation and governance

As discussed above, the inuence of country-of-origin and of

different regulatory regimes is sparsely examined. Some papers,

however, conceptually explore whether sustainability reporting

may contribute to empowering stakeholders and discuss a (po-

tential) shift of governance to civil society. Hess (2007) and Hess

(2008), for example, argue that voluntary initiatives (such as the

GRI) alone are insuf cient in achieving corporate accountability

because reporting is driven by strategic considerations (also Laufer,2003). Similarly, Dubbink et al. (2008) note an insuf ciency of self-

governance by companies due to a low level of transparency,

incomplete and irrelevant information for stakeholders, and a lack

of comparability of sustainability reports. Consequentially, the au-

thors emphasize the need for a basic legal framework in order to

promote a level of sophistication comparable with mandatory

nancial reporting systems. Hess and Dunfee (2007) suggest a

mandatory sustainability reporting system based on the GRI

guidelines to overcome the issue of strategic disclosure. Levy et al.

(2010), however, criticize the GRI guidelines for being too generic,

lacking detailed quantiable measures, and thus not satisfying the

informational needs of stakeholders. Therefore, they question the

contribution of the GRI for shifting corporate governance to civil

society. Some scholars also raise objections to mandatory sustain-ability reporting in general due to corporate opposition and a lack

of enforcement mechanisms (e.g., Brown et al., 2009b; Levy et al.,

2010). Considering that developing “a more or less smooth sys-

tem” (Dubbink et al., 2008: 402) of mandatory nancial reporting

has taken a considerable amount of time, one should take into

account that regulation on sustainability reporting is still at an early

stage of development (Hess and Dunfee, 2007). An example of

rather progressive regulation can be found in South Africa where

companies at the Johannesburg stock exchange are required to

publish an integrated TBL report, or explain omission (Adams

and Simnett, 2011; Integrated Reporting Committee of South

Africa, 2011). Moreover, the European Commission recently inten-

sied its endeavors to introduce mandatory sustainability-

related disclosure (European Commission, 2013). Such new de-

velopments warrant future research.

When turning to internal aspects of corporate governance, we

identied another research gap. Certain governance structures, for

example audit committees, sustainable development committees

or the presence (or absence) of non-executive or independent di-

rectors on the board might inuence reporting. Such structures

could signal the intention to be transparent, accountable, and

committed to sustainability (e.g., Haniffa and Cooke, 2005; Kent

and Monem, 2008). From our sample, only Ertuna and Tukel

(2010) and Kent and Monem (2008) discuss the mentioned com-

mittees with mixed results, whereas the inuence of non-executivedirectors is examined by Brammer and Pavelin (2006), Ertuna and

Tukel (2010), Haniffa and Cooke (2005), and Prado-Lorenzo et al.

(2009a). This leaves room for further investigations. Finally, only

two papers (Chen and Bouvain, 2009; Fortanier et al., 2011)

investigate whether adherence to global standards such as the GRI,

the UN Global Compact, ISO 14001 or others may increase the

comparability of sustainability reports by overcoming otherwise

existent variations in reporting practice.

Table 4 provides a brief overview of possible future research

streams regarding regulation and governance and posits related

research questions.

5.2.2. Research regarding reporting quality and stakeholder

perceptionFew studies specically examine reporting quality which is a

central issue for providing a true and fair view of a company ’s

Table 4

Overview of research gaps on regulation and governance.

General topic Exemplary research questions Initial research links Remarks and possible anchors

Voluntary vs. mandatory

reporting

Does legal pressure increase comparability

and/or quality of reporting? Can global

standards and soft law overcome the

drawbacks of voluntary disclosure?

E.g., Brown et al., 2009b;

Chen and Bouvain, 2009;

Dubbink et al., 2008;

Fortanier et al., 2011;

Hess, 2007; Hess, 2008;

Hess and Dunfee, 2007;

Laufer, 2003; Levy

et al., 2010

Institutional theory, e.g., normative isomorphism

through standard-setters, mimetic isomorphism

through industry trends, coercive isomorphism;

decoupling theory

Can sustainability reporting better be

explained by institutional pressure

than by legitimacy aspects?

E.g., despite the absence of legitimacy threats or

stakeholder demands, sustainability reporting

might be adopted/improved due to mimetic/

coercive pressuresGovernance issues at

company and country

level

Is the (non)disclosure of sustainability

information inuenced by the self-

interest of managers (or directors,

owners etc.) and/or by internal

governance structures?

E.g., Brammer and

Pavelin, 2006; Ertuna

and Tukel, 2010;

Fonseca, 2010; Haniffa

and Cooke, 2005; Kent

and Monem, 2008;

Prado-Lorenzo

et al., 2009a

Agency theory; discussion of benets and drawbacks

of sustainability reporting for directors, governance

entities etc.; absence of certain governance structures

(e.g., sustainability councils) might imply

sustainability reporting to be decoupled from actual

operations

Are there differences in sustainability

reporting due to differing governance

structures and stakeholder regimes,

e.g., in the US (explicit CSR) vs. Europe

(implicit CSR)?

Explicit/implicit CSR; differences in regulatory regimes

and/or stakeholder governance; potential differences

in reporting due to differences in stakeholder

engagement

Does sustainability reporting (practice

and guidelines) improve stakeholder

accountability and does stakeholder

integration improve credibility and

accountability?

Habermas’ theory of communicative action;

accountability theory




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sustainability performance. Although sustainability-related

reporting is not simply about concealing negative activities and

issues, several scholars note that voluntary disclosure allows

companies to use sustainability reporting as an impression man-

agement tool to improve a company’s reputation (e.g., Castelló and

Lozano, 2011; Coupland, 2006; Hanson and White, 2003;

Hooghiemstra, 2000; Ihlen, 2009; La Cour and Kromann, 2011;

Livesey and Kearins, 2002). In line with this, Holder-Webb et al.

(2009) note that most of the information voluntarily disclosed in

sustainability reports sheds a positive light on the respective com-

pany. Consequentially, many reports are criticized for their self-

laudatory, selective, and strategic character (e.g., Archel et al.,

2008; Criado-Jiménez et al., 2008). According to the GRI guide-

lines, the quality of sustainability reporting and the materiality of a

certain aspect to be reported depend on a balanced reection of

both positive and negative aspects of a company’s performance

(GRI, 2011b). Against this background it is striking that only a single

paper in the literature at hand (Criado-Jiménez et al., 2008) in-

vestigates the disclosure of negative incidents. To ll this gap,

future research could apply content analysis on sustainability re-

ports in order to examine differences in the disclosure of negative

incidents (see recently, Hahn and Lülfs, 2013). Furthermore, re-

searchers might engage in more exploratory and conrmatorymethods such as interviews, surveys, or experimental studies (see

recently, Reimsbach and Hahn, 2013) in order to explore stake-

holder’s perceptions of negative disclosure and its impact on

corporate reputation, legitimacy, share price, reporting quality, and

so on.

To enhance the reporting quality, Laufer (2003) emphasizes the

necessity of independent assurance and appropriate stakeholder

engagement. Both aspects have only recently received increasing

scholarly attention. This is not surprising since assurance on sus-

tainability reporting is a relatively new eld for professionals and

scholars (Smith et al., 2011; KPMG, 2011). A few papers conceptu-

ally or empirically discuss operational dif culties of assurance on

sustainability reporting (Dando and Swift, 2003; O’Dwyer, 2011;

Wallage, 2000). Furthermore, Park and Brorson (2005) examinethe typical process, drivers, and obstacles of such assurance

whereas Simnett et al. (2009), Chen and Bouvain (2009), and Kolk

and Perego (2010) identify factors determining the demand for

assurance. Only two studies analyze the contribution of assurance

to the perception of the respective reports using experimental

designs. Both nd that perceived credibility increases when a

sustainability report is assured and when assurance is provided by

professional accountants (Hodge et al., 2009; Pugrath et al., 2011).

With regard to the quality of assurance (thus indirectly to the

quality of reporting), Smith et al. (2011) conceptually discuss how

managerial inuence on the assurance process might impede

credibility and accountability. Additionally, Fonseca (2010) and

Manetti and Becatti (2009) evaluate assurance statements and note

problems stemming from a low level of stakeholder involvement.

Thomson and Bebbington (2005: 517) explicitly underline that “the

quality of reporting . is intimately linked to the quality of stake-

holder engagement”. It is noticeable that there are only isolated

endeavors addressing this issue. From a conceptual perspective,

Reynolds and Yuthas (2008) conclude that current reporting and

accountability standards enhance transparency but fall short of

engaging stakeholders in discourse, whereas Hess (2008) criticizes

corporations for limiting stakeholder engagement to a mere man-

agement of legitimacy risks. Empirical research also indicates that

companies hardly ever involve stakeholders in decision making onthe content of reports (Manetti, 2011; Perrini, 2006), which might

compromise the materiality and relevance of disclosed informa-

tion. One reason might be that businesses are simply not aware of

how to deal with certain stakeholders (e.g., Onkila, 2011), so

Habisch et al. (2011) identify a gap between literature and practice

about the importance of stakeholder dialogs with regard to sus-

tainability reporting.

Research on stakeholder pressure and legitimacy aspects as

determinants of sustainability reporting is remarkably scarce. In an

early conceptual study, Lewis and Unerman (1999) propose that

varying moral values result in different legitimation strategies and

correspondingly in different reporting patterns in order to fulll

distinctive stakeholder expectations. In line with this, Buhr (2002)

and Husillos-Carqués et al. (2011) infer from interview data thatreporting is initiated following insuf cient communication with

Table 5

Overview of research gaps on reporting quality and stakeholder perception.

General topic Exemplary research questions Initial research links Remarks and possible anchors

Reporting quality Does the quality of sustainability reporting

inuence different aspects of competitive

advantage?

Archel et al., 2008; Clarkson et al., 2011;

Criado-Jiménez et al., 2008; Hahn and Lülfs, 2013;

Laufer, 2003; and other studies mentioned

in Tables 1e3

Resource-based view; socio-political

theories (stakeholder/legitimacy);

voluntary disclosure theory

Does sustainability reporting convey a

true and fair view of corporate

sustainability performance?

Signaling theory; legitimacy theory

Stakeholder engagement

and perception

Does the reporting of negative aspects

inuence stakeholder perception? Do

stakeholders perceive sustainabilityreporting as a proper indicator for a

company’s reliability and predictability?

Criado-Jiménez et al., 2008; Habisch et al.,

2011; Hess, 2008; Manetti, 2011; Onkila,

2011; Perrini, 2006; Reimsbach and Hahn, 2013;Reynolds and Yuthas, 2008; Thomson and

Bebbington, 2005

Signaling theory; legitimacy theory;

resource-based view; stakeholder theory

Does integrated reporting change the

uptake of information by certain

stakeholders (e.g., investors)?

Information processing theory;

proximity compatibility principle

Is sustainability reporting oriented

towards the informational needs of

certain stakeholders (e.g., investors)?

Does stakeholder engagement inuence

reporting patterns (and quality)?

Resource dependence theory;

stakeholder theory

External assurance Does assurance inuence (perceived)

reporting quality?

Laufer, 2003; Smith et al., 2011; Dando and

Swift, 2003; O’Dwyer, 2011; Wallage, 2000;

Parker, 2005; Simnett et al., 2009; Chen and

Bouvain, 2009; Kolk and Perego, 2010;

Hodge et al., 2009; Pugrath et al., 2011;

Fonseca, 2010;

Agency theory; transaction cost

theory; signaling theory

Does assurance inuence information

asymmetries and/or transaction costs?




13/17

stakeholders and a resulting legitimacy crisis or corporate scandals.

Golob and Bartlett (2007) nd in a study covering Australia and

Slovenia that the content of sustainability reporting is inuenced

either by shareholder or stakeholder traditions. Furthermore,

Sinclair-Desgagné and Gozlan (2003) estimate in one of the few

models in our review that stakeholder pressure can inuence the

quality of information (see also the conceptual paper of Utama,

2011). Despite consistently arguing for a positive association be-

tween stakeholder pressure and sustainability reporting, there is a

signicant lack of empirical research. Interestingly, the few existing

studies applied methods which were otherwise rather scarce.

Closely linked to these issues is the question of stakeholder

perception of sustainability reporting. The limited number of

studies (Belal and Roberts, 2010; De Villiers and Van Staden, 2011;

Johansen, 2010) impedes a proper evaluation of the contribution of

sustainability reporting to corporate accountability. When looking

at investors as a specic stakeholder group, Dhaliwal et al. (2011)

argue for the importance of sustainability reporting in reducing

information asymmetry between managers and investors to in-

crease rm value and decrease cost of capital. The few empirical

papers on this aspect consistently conrm this assumption

(Cormier and Magnan, 2007; Dhaliwal et al., 2011; Moneva and

Cuellar, 2009; Schadewitz and Niskala, 2010). Willis (2003)conceptually illustrates the benets of the GRI for socially respon-

sible investments by contributing to comparability between com-

panies and facilitating comprehension of past performance and

future prospects. Van den Brink and Van der Woerd(2004) evaluate

the GRI guidelines on their applicability for benchmarking pur-

poses of rating agencies. In contrast, two other papers discuss

limitations of sustainability reporting towards socially responsible

investments with regard to the already mentioned strategic, se-

lective, and self-laudatory nature of such reports (Fayers, 1999;

Laufer, 2003).

Table 5 provides a brief overview of possible future research

streams regarding reporting quality and stakeholder perception

and posits related research questions.

6. Conclusions

This paper provided a review of literature on contemporary

sustainability reporting from 1999 to 2011 and contributed to

literature by giving a broad overview of the results on the (internal

and external) determinants of sustainability reporting. Already the

descriptive analysis revealed noteworthy aspects. First, current

literature often still seems far from considering truly complete

sustainability reporting on all three dimensions of sustainability.

While we noticed a shift in focus from isolated social or environ-

mental reports to a sustainability focus on the DBL or recently even

on the TBL, the latter is still in its infancy so that there are plenty of

opportunities for future research studying true sustainability

reporting beyond compartmentalization and isolated approaches.Future studies might, for example, look into the content and quality

of integrated reports in order to evaluate whether they contribute

to a more concise and balanced understanding of corporate per-

formance compared to stand-alone sustainability reports. Second,

we noted a strong growth in empirical research (especially docu-

ment analysis) which coincides with the growth in published sus-

tainability reports. Our discussion of ndings, inconsistencies, and

gaps in the 178 articles mainly focused on internal and external

determinants of sustainability reporting and their impact on the

adoption, extent, and quality of reporting since we noted a distinct

research focus on these issues.

Although researchers analyze the effects of a multitude of de-

terminants, only few variables (most notably company’s size,

visibility, and sector-af

liation) receive suf

cient attention and

are associated with consistent results to draw clear conclusions.

Research on most determinants tends to come to inconsistent

ndings. A closer look at the journals reveals that these incon-

sistent ndings do not seem to be inuenced by different man-

agement disciplines but are spread across different journal

segments (i.e., accounting-related journals, sustainability-related

journals, journals from other disciplines, or general management

journals). One can recognize a lack of research on certain de-

terminants such as managerial attitudes and culture. Furthermore,

the quality of sustainability reporting has been largely neglected.

This is not surprising because, other than the extent of reports or

the time of adoption, reporting quality in itself is already dif cult

to evaluate and thus to study. Nevertheless, it is important to turn

to such more sophisticated issues to allow for meaningful con-

clusions, for example, regarding a true and fair view in sustain-

ability reporting. When looking at the quality of sustainability

reporting in connection to another so far scarcely explored area,

namely stakeholder perceptions, research might investigate

whether the trend towards integrated reporting actually satises

stakeholders’ informational needs and contributes to their

empowerment. This would also imply a shift from the dominance

of content analysis of published documents towards more

exploratory and conrmatory methodological approaches such asinterviews, surveys, and experimental studies. Overall, the above

mentioned gaps suggest that there are signicant opportunities

for future researchers to contribute to the eld of sustainability

reporting. This literature review helps to pave the way for up-

coming studies by also discussing potential theoretical anchors

(especially legitimacy, stakeholder, signaling, and institutional

theory) which are so far often missing or only rudimentary

existing in extant research.8

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Determinants of Sustainability Reporting a Review of Results, Trends,

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