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This paper aims to assess the disclosure of the materiality process in the preparation of sustainability reports of state-owned enterprises (SOEs). This paper also explores the effects of regulation mandating that SOEs prepare sustainability reports. In the specific case of port authorities, the study analyses the influence of a sector guideline that determines what should be included and the structure of the report. Another aim of this paper is to delve into SOE's motivations for disclosing information on materiality assessments, using the assumptions of the different theories to explain their reporting practices.

Using a sample of SOEs sustainability reports, a content analysis is undertaken. The methodology involves the analysis of the information disclosed by SOEs in Spain and the development of a materiality disclosure index. This index enables sampled entities to be classified on a scale of 0–5, based on the extent of their disclosures of the materiality determination process. This study also identifies several variables that explain differences in these disclosures.

A low rate of information disclosed about the materiality process can be attributed to the desire of SOEs to create symbolic legitimacy. In a context where the disclosure of sustainability information is mandatory, only few organisations apply the principle of materiality to define the content of their sustainability reports. These results highlight that institutional isomorphism has only had a limited effect on the materiality process.

Limitations associated with the sample size and composition of the sample by sector apply.

This research shows that generally accepted reporting guidelines constitute a reference framework for sustainability reporting but that the principles underpinning these frameworks are not always implemented.

This study extends the literature on the implementation of the principle of materiality and uses disclosure theories to explain the actual reporting by SOEs of their materiality process.

The purpose of this paper is to examine investors’ propensity to litigate when harmful events occur subsequent to accounting choices. Consistent with Culpable Control Theory, the authors find that investors are more likely to pursue litigation against management when managers are perceived to have more financial reporting flexibility, such as when they apply imprecise, principles-based accounting guidance. Investors are more likely to pursue litigation when they find management more responsible for harmful events, and they find management more responsible for those events when they perceive management to have more reporting flexibility. To provide additional insight, the authors investigate how the relationship between reporting flexibility and assessed manager responsibility is mediated by investors’ perceptions of management’s self-interested behavior. The authors consider monetary and non-monetary motivations for litigation against management such as recouping financial losses and punishing management. The results suggest that recouping financial losses is not the sole motivation for litigation. The authors provide evidence that punishing management is an important non-monetary component of the litigation decision. The results contribute to the limited literature on investor litigation decisions and inform the debate surrounding the potential effects of more principles-based accounting standards.

The authors test the hypotheses using an experiment with a 2×1 between-subjects design in which the authors manipulate reporting flexibility at two levels by varying the precision of accounting guidance and measure all other variables of interest. Participants are 82 part-time executive MBA program students at a major public university in the USA. Most participants work full-time (94 percent), own or have owned stocks either directly or through retirement plans (84 percent), indicate general investment knowledge (97 percent), and report high levels of familiarity with corporate financial statements, including balance sheets and income statements (92 percent). Thus, the authors conclude that these executive MBA students are reasonable surrogates for investors.

Consistent with the predictions, perceived management reporting flexibility affects investors’ propensity to pursue litigation against management. The authors find that the assignment of responsibility to management for harmful events such as investor losses, employee job losses, and economic losses suffered by a community mediates the relationship between reporting flexibility and investors’ intention to litigate. The authors also find that the relationship between reporting flexibility and assignment of responsibility to management for harmful events is not direct but instead works through the effect of reporting flexibility on perceived management self-interested behavior. As predicted, assessed management responsibility for the harmful event is positively related to investors’ propensity to litigate against management, and this relation is only partially mediated by investors’ perceptions that the litigation will be successful. This result suggests that the litigation decision is driven at least in part by corporate governance goals such as the desire for retribution or punishment of management. The second experiment provides additional support for the theory that the desire to punish management is an important component of investors’ litigation decisions.

The research makes important contributions to the literature on investor litigation and to the ongoing debate regarding principles- vs rules-based accounting standards. While some archival research addresses the conditions under which securities litigation occurs, little empirical research has directly addressed the investor decision to litigate. The paper provides additional evidence to address the question of why investors litigate. By doing so, the authors add to the debate on the desirability of shifting from more rules-based to more principles-based accounting standards.

The theory tested in this study could be used to design mechanisms to mitigate the differential propensity for investors to litigate under differing accounting regimes. As standard setters discuss a move to more principles-based standards in the USA, some observers have expressed concern that investor litigation will increase. The theory suggests that if the standard-setting body can control perceptions of management reporting flexibility such that investors believe principles-based standards provide no more flexibility than rules-based standards, they can limit an increase in the amount of investor litigation.

The authors contribute to theory by providing evidence regarding why investors desire to pursue litigation against management. The authors find that the assignment of responsibility to management for harmful events mediates the relationship between reporting flexibility and investors’ intention to litigate. The authors also find that the relationship between reporting flexibility and assignment of responsibility to management for harmful events is not direct but instead works through the effect of reporting flexibility on perceived management self-interested behavior. Furthermore, assessed management responsibility for the harmful event is positively related to investors’ propensity to litigate against management, and this relation is only partially mediated by investors’ perceptions that the litigation will be successful. Those findings provide theoretical contributions to the literature.

A sustainability reporting framework must demonstrate that resources are fairly bought and used to support diverse life on earth within habitable ranges. The purpose of this paper is to propose a principle-based sustainability reporting framework that measures, audits and reports based on sustainability outcomes and impacts as part of the corporate reporting framework.

This paper draws on the United Nations Sustainable Development Goals (UN SDGs) and targets for preparing a reporting framework. It uses Gaia Theory and the Theory of Distributive Justice constructs that align with sustainable development principles to delineate a reporting approach.

Frameworks that promote sustainability reporting have increasingly embraced UN SDGs but overly focus on performance promoting inter-firm comparisons. This framework introduces principle-based sustainability reporting where firms demonstrate their chosen contribution to sustainable development using 17 UN SDGs as goal posts.

This conceptual paper presents theoretical constructs that future research can empirically validate to enhance sustainability reporting.

This principle-based sustainability reporting framework is implementable for corporate reporting, where sustainability reporting integrates with the financial and economic intellectual capital reporting frameworks.

This framework highlights the importance of acquiring and using resources to distribute justice and fairness. It is a joint project between firms and stakeholders.

This framework promotes integrated thinking for firms to engage in principle-based sustainability reporting and provides a roadmap for sustainability reporting using the SDG Compass logic model.

This paper aims to understand how the principle of materiality gets implemented in integrated reporting (IR) contexts.

Drawing on an interpretation of materiality as a social construction, this research explores the meaning that practitioners attach to the principle during their implementation of it. Following an existing framework for exploring materiality in corporate reporting, this study investigates the meaning by focusing on who participates in determining IR materiality and to whom the IR is addressed. This analysis benefits from in-depth interviews with persons involved in the preparation of IR for a firm that pioneered this form of reporting.

In IR preparers’ view, the meaning of materiality corresponds with the company strategy: The IR describes strategic priorities and related actions and results. Capital providers are the primary intended addressees of the material information. Although several actors engage in IR preparation, the materiality determination process is governed by a specific “IR hub” in strict collaboration with and dependence on the chief financial officer.

In an IR context, materiality is intimately connected to the function that preparers assign to the report.

This novel research opens the “black box” of the process by which materiality gets defined and then practically implemented in an IR context.

This paper aims to establish the extent to which South African state-owned entities (SOEs), where integrated reporting is a quasi-mandatory reporting requirement, have incorporated the principles of the international integrated reporting framework. These identified South African SOE reporting practices are compared with the ‘integrated reporting’ related disclosures of SOEs in selected countries, where integrated reporting remains voluntary.

This paper deploys a qualitative research approach, to thematically analyse the content of publicly available annual or integrated reports of South Africa SOEs, as the primary country of analysis, with those of their counterparts in five purposively selected countries. The relative scores for the SOEs of each country is calculated using a disclosure index derived from the international integrated reporting framework principles.

The paper found that despite being a quasi-mandatory reporting requirement, not all South African SOEs complied with all the international integrated reporting framework principles. Accepting the assertion that integrated reporting enhances organisational transparency and accountability, the accountability disclosure practices of South African SOEs appear more comprehensive than their counterparts in other countries.

Extant research into integrated reporting has primarily focussed on the profit-seeking private sector, with limited research into its applicability in the public sector. This paper attempts to address this paucity by examining aspects of integrated reporting by South African SOEs, which are then compared to accountability reporting practices in other countries.

By responding to scholarly calls, this study examines the environmental reports of LVMH and Kering. The study extends legitimacy theory to ascertain the credibility of the aforementioned luxury conglomerates' commitment to environmental sustainability.

A corpus-assisted discourse analysis centred upon the Global Reporting Initiative (GRI) guidelines is used to examine the environmental disclosures of LVMH and Kering.

The findings show inconsistencies due to the lack of brand-level reporting and reporting quality falls short of comparable sustainability reporting within each conglomerate and with one another. Selective and unbalanced reporting along with symbolic management undermines the legitimacy of sustainability efforts by LVMH and Kering.

Despite the increased attention paid to sustainable luxury, few studies critically analyse how luxury brands formally report on sustainability.

This paper aims to offer an overview of key aspects of the journey to develop the Global Reporting Initiative (GRI) Framework and Guidelines, focusing on the Materiality construct. It provides a practitioner’s perspective of several issues related to this construct.

This commentary is mainly based on publicly available technical documents, the analysis of papers related to the Materiality construct and a contextual review of the evolution of the main features of the GRI Guidelines and Standards.

This paper discusses the conundrum currently surrounding the Materiality construct and offers some reflections and suggestions about the challenges facing GRI.

Clarification of the Materiality construct could reduce confusion and eventually allow for clear identification and differentiation of the financial and sustainability accounting fields at their interface.

Language creates reality; an opportunity has arisen to bring appropriate and distinctive terminology to the sustainability reporting field, bridging the gap between competing logics.

This viewpoint is timely. It contributes a practitioner’s perspective to the current debate on the development of the Materiality construct.

The integrated reports published by companies vary significantly in quality in spite of them claiming to be compliant with the integrated reporting (IR) Framework issued by the International Integrated Reporting Council (IIRC). The purpose of this paper is to develop and apply a normative benchmark against which compliance with the IR Framework, and the extent to which integrated reports make visible how organisations create value, can be evaluated.

The three pillars of the IR Framework – Capitals, Content Elements and the Guiding Principles – are operationalised by the way of a set of disclosure items that capture the extent to which they manifest within integrated reports. The created disclosure index is applied to analyse reports of five companies that are expected to be superior integrated reporters.

The normative benchmark that was created to operationalise the IR Framework identifies a vast amount of potentially communicable information and various degrees to which information may be disclosed. The integrated reports analysed differ significantly in the extent to which value-creation stories are made visible, despite some of the companies promoting to have actively engaged with IR as participants of the IIRC Pilot Program Business Network. All selected companies performed poorly in comparison to the normative benchmark.

This paper is the first to provide a comprehensive normative benchmark for analysing and evaluating compliance with the IR Framework and the extent to which integrated reports make visible how organisations create value.

This paper aims to investigate the current state of knowledge in key reporting aspects in relation to sustainability reporting in general and to reflect on their relevance to Global Reporting Initiative (GRI) in particular. In doing so, the major gaps in that knowledge are identified, and the paper proceeds to suggest further research avenues.

The authors conduct a review of papers published in leading journals concerning sustainability reporting to analyse the progress in the literature regarding three important reporting topics: materiality, comparability and assurance.

The review conducted in this study shows that there is still work to be done to ensure high-quality and consistent sustainability reporting. Key takeaways from the review of the extant literature are as follows: there is ongoing debate about the nature of sustainability reporting materiality, and single versus double materiality. Clearer guidance and better contextualisation are seen as essential for comparability, and, as GRI suggests, there is an important link to materiality that needs to be considered. Finally, assurance has not been mandatory under the GRI, but the current development at EU level might lead to the GRI principles being incorporated in the primary assurance standards.

In this paper, the authors review and synthesise the previous literature on GRI reporting dealing with three key reporting aspects.

The authors extract some takeaways from the literature on materiality, comparability and assurance that will all be key challenges for GRI in the future.

This paper provides an updated review of the literature on GRI reporting dealing with three key reporting aspects.

The purpose of this research is to analyze the perceptions of stakeholders – more specifically, socially responsible investment (SRI) practitioners – of the quality of sustainability reports using the Global Reporting Initiative (GRI) framework.

This paper is based on 33 semi-structured interviews carried out with different stakeholders and experts (e.g. consultants, fund managers, analysts, consultants) in the field of SRI in Canada.

The perceptions of SRI practitioners shed more light on the elastic and uncertain application of the GRI principles in determining the quality of sustainability reports. Their perceptions tend to support the argument that sustainability reports reflect the impression management strategies used by companies to highlight the positive aspects of their sustainability performance and to obfuscate negative outcomes.

First, undertake empirical research on stakeholders’ perceptions – which have been largely overlooked – of the quality of sustainability reports. Second, shed new light on the impression management strategies used in sustainability reporting. Third, show the reflexivity and the degree of skepticism of practitioners with regard to the reliability of information on sustainability performance.