Towards shareholders' value: an analysis of sustainability reports

Abstract

Purpose

Sustainability reports have become a new trend in corporate reporting. The purpose of this paper is to: evaluate the content of sustainability reports published by international companies; define trend changes in reporting; and assess the extent to which sustainability reporting can contribute to shareholder value by evaluating their usefulness for shareholders. In particular, the paper looks for the answers to the following questions: Is information published in reports sufficient for shareholders? How do they evaluate the quality of the published reports? Has the complexity of reports increased in recent years? What important information should sustainability reports also include?

Design/methodology/approach

The study applied the method of expert opinion assessment. The analysis of the documentation covered the reports published by multinational organizations in 2005 and 2010. The assessment was performed by independent experts‐shareholders. Global Reporting Initiative (GRI) standards and methodology served as a point of reference.

Findings

The results point to an evolution in sustainability reports. Considering the reports prepared in 2005 and 2010, improvement in quality can be observed. An in‐depth analysis of those reports showed an increase in attention to detail of reporting in the fundamental spheres, i.e. economic, environmental, and social. The author also highly evaluated clarity and timeliness. However, important gaps were identified in respect of inclusiveness, relevance of information, and neutrality. Shareholders found general usefulness of sustainability reports insufficient.

Originality/value

Previous studies on sustainability reports aimed at evaluating sustainability development programs or directions in the evolution of reports but their usefulness has not been examined. No one previously is believed to have conducted a study of the quality of the reports published by multinational corporations, with their evaluation from the point of view of shareholders. Therefore, this paper provides a new insight into the study of sustainability reporting. Apart from contributing to the debate about shareholder value, the paper confronts current sustainability reports with their earlier versions.

Citation

Leszczynska, A. (2012), "Towards shareholders' value: an analysis of sustainability reports", Industrial Management & Data Systems, Vol. 112 No. 6, pp. 911-928. https://doi.org/10.1108/02635571211238518