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Sustainability reporting:
               Trends and trajectories


                     Prof.dr. Ans Kolk

16 June 2010   ...
Sustainability reporting trends

    Development over time
      1970s: social reporting
      1980s: decline
      1990s:...
What we know – and what not…

    We know things about trends, but usually based on lists of largest
    companies (nation...
Reasons for reporting

  Enhanced ability to track progress against specific targets
  Facilitates implementation of susta...
Reasons for not reporting

  Doubt about the advantages to the organisation
  Competitors are not publishing reports
  Cus...
Panel of 213 large firms: trends in a decade

    Significant increase in reporting: from 39% in 1999 to 69%
    Clear gro...
Sector dynamics, considering firm patterns

    In global industries with relatively small number of large firms,
    comp...
Some conclusions

    Different dynamics in the various sectors, in some reporting more or
    less established, incidenta...
Some recent publications

    Kolk, A. (2008). Sustainability, accountability and corporate
    governance: Exploring mult...
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GRI Conference - 27 May - Kolk- Sustainability Reporting Panel

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Transcript of "GRI Conference - 27 May - Kolk- Sustainability Reporting Panel"

  1. 1. Sustainability reporting: Trends and trajectories Prof.dr. Ans Kolk 16 June 2010 1
  2. 2. Sustainability reporting trends Development over time 1970s: social reporting 1980s: decline 1990s: environmental reporting 2000 onwards: broadening towards reporting on sustainability and corporate social responsibility/citizenship/sustainable development Formats have become more diverse (also in annual reports, web- based) Topics have evolved, e.g. increasing attention to corporate governance, climate change (also separate carbon disclosure) More standardisation though still variety Verification has taken off 16 June 2010 Dit is de titel van deze presentatie · 2
  3. 3. What we know – and what not… We know things about trends, but usually based on lists of largest companies (nationally or globally) composition changes over time, different sets We know things about drivers but based on cross-sectional research no insight in dynamics (‘deterministic responses to pressures’) Hence, no insight into patterns at the level of the firm, and its strategies over time How companies respond to others, for example those that are perceived to be leaders (‘simply imitating others’) Therefore, this research examined reporting by a panel of Global 250 firms (n=213), over a period of a decade considered in their sector- specific settings to explore dynamics 16 June 2010 Dit is de titel van deze presentatie · 3
  4. 4. Reasons for reporting Enhanced ability to track progress against specific targets Facilitates implementation of sustainability strategy Greater awareness of sustainability issues throughout the organization Better conveyance of corporate message internally and externally Improved all-round credibility from great transparency Ability to communicate efforts and standards Licence to operate and campaign Reputational benefits, cost savings identification, increased efficiency, enhanced business opportunities & staff morale Hence, consideration of stakeholder pressure (legitimacy/impression management), weighing costs and benefits, larger firms more likely to report, as do those from ‘sensitive’ sectors (pollution, peer pressure) 16 June 2010 Dit is de titel van deze presentatie · 4
  5. 5. Reasons for not reporting Doubt about the advantages to the organisation Competitors are not publishing reports Customers (and public) not interested; will not increase sales Firm already has a good reputation on sustainability Many other ways of communicating about sustainability Too expensive Difficult to gather consistent data from all operations and select correct indicators Could damage reputation of the firm, have legal implications or wake up ‘sleeping dogs’ Recent study showed that ‘competition’ and ‘implementation’ scored highest (reputational aspects were considered least important) 16 June 2010 Dit is de titel van deze presentatie · 5
  6. 6. Panel of 213 large firms: trends in a decade Significant increase in reporting: from 39% in 1999 to 69% Clear growth of verification: from 9% in 1999 to 38% No sustainability reports in 1999, mostly environmental (and health and safety), this has completely changed Most polluting traditionally most active; European and Japanese firms report more than average, US and South Korean firms less Reporting trajectories at the firm-level: Consistent reporters (32%): leaders, early in having reports verified Late adopters (16%): Japanese firms overrepresented Laggards (19%): banks/insurance overrepresented, and French Consistent non-reporters (24%): hardly European firms, more US Inconsistent reporters (8%): never had reports verified, many US 16 June 2010 Dit is de titel van deze presentatie · 6
  7. 7. Sector dynamics, considering firm patterns In global industries with relatively small number of large firms, competitors closely watch one another, and ‘follow the leader’ Reporting common in automotive, but verification not until recently In oil & gas, reporting and verification is rather common; the latter particularly for European firms in the beginning Utilities are less internationalised, but reporting common by 2002, verification not (again except for Europan firms) Chemicals and pharmaceuticals very early, already before 1998; verification by European firms, not by US firms In electronics/computers, reporting is prevalent, late adopters from Asia In banking, reporting took off relatively late (large number of late adopters), some NL/UK banks adopted verification later than reporting 16 June 2010 Dit is de titel van deze presentatie · 7
  8. 8. Some conclusions Different dynamics in the various sectors, in some reporting more or less established, incidentally before 1998, in other more emergent still Influence of country of origin: many sectors show one or more European frontrunners, particularly when it comes to adopting verification at relatively early stage In some sectors US firms follow later, but almost never verify reports Noteworthy is that one quarter consistently did not report, so disadvantages even for those highly visible firms, with peers already being active in reporting Implementation and complexity may play a role Fear of litigation, competitive sensitivity ‘Cycle’ of rising expectations 16 June 2010 Dit is de titel van deze presentatie · 8
  9. 9. Some recent publications Kolk, A. (2008). Sustainability, accountability and corporate governance: Exploring multinationals reporting practices. Business Strategy and the Environment, 17(1), 1-15. Kolk, A. (2010). Trajectories of sustainability reporting by MNCs. Journal of World Business, 45(4), forthcoming. Kolk, A., Levy, D. & Pinkse, J. (2008). Corporate responses in an emerging climate regime: The institutionalization and commensuration of carbon disclosure. European Accounting Review, 17(4), 719-745. Kolk, A. & Perego, P. (2010). Determinants of the adoption of sustainability assurance statements: An international investigation. Business Strategy and the Environment, 19(3), 182-198. Kolk, A. & Pinkse, J. (2010). The integration of corporate governance in corporate social responsibility disclosures. Corporate Social Responsibility and Environmental Management, 17(1), 15-26. 16 June 2010 Dit is de titel van deze presentatie · 9
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