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1 – 10 of over 46000Simone Pizzi, Fabio Caputo and Elbano de Nuccio
This study aims to contribute to the emerging debate about materiality with novel insights about the signaling effects related to the disclosure of environmental, social and…
Abstract
Purpose
This study aims to contribute to the emerging debate about materiality with novel insights about the signaling effects related to the disclosure of environmental, social and governance (ESG) information using the guidelines released by the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB).
Design/methodology/approach
An empirical assessment using panel data analysis was built to evaluate the relationship between sustainability reporting standards and analysts’ forecast accuracy.
Findings
The analysis revealed that the proliferation of sustainability reports prepared on mandatory or voluntary basis mitigated the signaling effects related to the disclosure of ESG information by companies. Furthermore, the additional analysis conducted considering sustainability reporting quality and ESG performance revealed the existence of mixed effects on analysts’ forecasts accuracy. Therefore, the insights highlighted the need to consider a cautionary approach in evaluating the contribution of ESG data to financial evaluations.
Practical implications
The practical implications consist of identifying criticisms related to disclosing ESG information by listed companies. In detail, the analysis underlines the need to enhance reporting standards’ interoperability to support the development of more accurate analysis by investors and financial experts.
Social implications
The analysis reveals increasing attention investors pay to socially responsible initiatives, confirming that financial markets consider sustainability reporting as a strategic driver to engage with stakeholders and investors.
Originality/value
This research represents one of the first attempts to explore differences between GRI and SASB using an empirical approach.
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Over the last several decades, the question of the import of firms’ social and environmental responsibilities has taken center stage. While once companies’ obligations to…
Abstract
Over the last several decades, the question of the import of firms’ social and environmental responsibilities has taken center stage. While once companies’ obligations to stakeholders and to sustainability were framed as normative issues, these criteria are taking on instrumental worth. Most recently, advocates of Responsible Investment have suggested that firms’ environmental, social, and governance (ESG) performance possesses critical implications for companies’ creation and capture of long-term economic value. Employing textual analysis, this chapter analyzes the accounting, rating, and reporting standards that have been developed by which companies are expected to measure, communicate, and be evaluated for their ESG performance. Drawing from literature on organizational imprinting, this chapter finds significant differences across these standards, in terms of the determination of materiality and firms’ desired stakeholder relations. The divergence present in the meaning and measure of Responsible Investment across these standards possesses important strategic implications for managers in this field who must consider the implications of each guideline for internal and external purposes.
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Mohammad A.A. Zaid and Ayman Issa
Motivated by the growing and urgent demands for a unified set of internationally accepted, and high-quality environmental, social and governance (hereafter ESG) disclosure…
Abstract
Purpose
Motivated by the growing and urgent demands for a unified set of internationally accepted, and high-quality environmental, social and governance (hereafter ESG) disclosure standards, this exploratory study aims to propose a roadmap for setting out the proper technical groundwork for global ESG disclosure standards.
Design/methodology/approach
An exploratory study is conducted to gain initial understanding and insights into establishing a worldwide set of standards for reporting on sustainability, as this topic has not been extensively studied. This study examines the viewpoints of various stakeholders, including sustainability practitioners, academics and organizations focused on ESG issues, to generate knowledge that is more solid than knowledge produced when one group of stakeholders work alone.
Findings
The results revealed that there is an ongoing and incompatible debate regarding several conceptual and practical challenges for setting a unified set of ESG disclosure standards.
Practical implications
The study results provide multidimensional insights for regulatory parties and standard-setters to develop a high-quality package of global ESG reporting standards. This, in turn, enables different groups of stakeholders to understand the firm’s impact on the environment, society and economy.
Originality/value
Research into this timely and relevant global issue is considered an appealing area of study and deserves significant attention. Thereby, working on this topic merits remarkable attention. Furthermore, this exploratory article provides valuable and informative suggestions for creating a unified and high-quality set of internationally accepted sustainability reporting standards.
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Mercedes Luque-Vílchez, Michela Cordazzo, Gunnar Rimmel and Carol A. Tilt
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…
Abstract
Purpose
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.
Design/methodology/approach
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.
Findings
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.
Practical implications
In this paper, the authors review and synthesise the previous literature on GRI reporting dealing with three key reporting aspects.
Social implications
The authors extract some takeaways from the literature on materiality, comparability and assurance that will all be key challenges for GRI in the future.
Originality/value
This paper provides an updated review of the literature on GRI reporting dealing with three key reporting aspects.
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Irshad Ali, Peni T. Fukofuka and Anil K. Narayan
The aim of this paper is to provide critical reflections on the role of standard setters and the endeavours of various organisations to provide sustainability reporting standards.
Abstract
Purpose
The aim of this paper is to provide critical reflections on the role of standard setters and the endeavours of various organisations to provide sustainability reporting standards.
Design/methodology/approach
The authors’ critical reflections are informed by the literature and websites of IASB, International Sustainability Standards Board (ISSB), global reporting initiative (GRI) and other relevant organisations. The authors use Bourdieu’s concept of field to support their analysis and critique.
Findings
The authors highlight how a disrupted standard-setting field will be a distraction from efforts to address real sustainability issues and concerns. Determining the “legitimate” sustainability reporting standards is likely to be an outcome of struggles between occupants in the sustainability standard-setting field. Accordingly, the shape of legitimate standards will be defined by those with power. The concern is the priority and the motive underpinning the endeavours of those with power. The authors propose that it is important for both the ISSB and GRI to serve the interest of a broad range of actors, including those who are not likely to have a say in sustainability reporting standard setting.
Practical implications
This paper contributes to sustainability reporting practice by putting forward a case for strengthening current sustainability reporting practices with appropriate changes to overcome some of the criticisms of the GRI.
Social implications
The authors highlight that there is a much broader group of stakeholders who require sustainability information and that it is important that the sustainability reporting standards serve the information needs of all stakeholders and not just those of the dominant actors. However, the ISSB with its economic focus will inevitably focus on the concern of investors and market participants.
Originality/value
The originality in this paper is the use of Bourdieu’s concept of field to theoretically highlight how a new standard setter may disrupt the sustainability standard-setting field and act as a distraction from efforts to address sustainability issues and concerns that the world faces.
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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…
Abstract
Purpose
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.
Design/methodology/approach
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.
Findings
This paper discusses the conundrum currently surrounding the Materiality construct and offers some reflections and suggestions about the challenges facing GRI.
Practical implications
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.
Social implications
Language creates reality; an opportunity has arisen to bring appropriate and distinctive terminology to the sustainability reporting field, bridging the gap between competing logics.
Originality/value
This viewpoint is timely. It contributes a practitioner’s perspective to the current debate on the development of the Materiality construct.
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Ismail Khan, Yuka Fujimoto, Muhammad Jasim Uddin and Muhammad Asim Afridi
This study aims to examine sustainability reporting through the lens of global reporting initiative (GRI) standards in developing economies, particularly in Pakistan, from the…
Abstract
Purpose
This study aims to examine sustainability reporting through the lens of global reporting initiative (GRI) standards in developing economies, particularly in Pakistan, from the perspective of stakeholder theory, legitimacy theory, and system theory.
Design/methodology/approach
Qualitative and quantitative analyses on economic, social and environmental areas of sustainability reporting based on the GRI standards are applied across 57 organizations listed on the Pakistan stock exchange over the years 2016–2020.
Findings
The results from the content analysis and descriptive statistics show that overall sustainability reporting increased persistently over time and limited organizations disclose economic, social and environmental sustainability based on GRI standards. Moreover, the result from the two-tailed correlation analysis shows positive relations between economic, social and environmental sustainability reporting.
Research limitations/implications
Following the GRI standards, the regulators, government and policymakers need to assess the sustainability reporting based on GRI standards to improve corporate operations' transparency, stakeholder trust and legitimacy. The organizations should move beyond the compliance of regulatory norms and adopt the globally accepted sustainability GRI standards to improve sustainability reporting. The same kind of sustainability reporting is also advised for other countries with similar backgrounds and sustainability challenges.
Social implications
The integrated sustainability reporting framework based on GRI standards enables the organizations to work as a system of interconnected economic, social and environmental sustainability to resolve the issue of sustainability reporting, ensure the trust of multiple stakeholders and legitimize their business operations in society.
Originality/value
To the best of the authors' knowledge and thorough review of literature, this is the first study that examines the sustainability reporting based on GRI in the developing country of Pakistan to extend the findings of previous studies from conventional sustainability reporting to the globally accepted GRI based sustainability reporting. Using system theory, this study provides an additional contribution to the consideration concerning sustainability reporting based on GRI standards in the context of Pakistan.
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The paper uses theoretical conceptions of power and orchestration to analyse the role of the Corporate Reporting Dialogue on the global standardisation of sustainability reporting.
Abstract
Purpose
The paper uses theoretical conceptions of power and orchestration to analyse the role of the Corporate Reporting Dialogue on the global standardisation of sustainability reporting.
Design/methodology/approach
The paper adopts an interpretive approach and draws on a qualitative dataset derived from interviews, documentary analysis and observation.
Findings
The paper traces how the Corporate Reporting Dialogue was orchestrated by the International Integrated Reporting Council, with the objective of aligning sustainability reporting standards, but moved to become a vehicle for orchestrating standards consistent with the recommendations of the Task Force for Climate-Related Financial Disclosure. Collaboration between the Dialogue's five most active bodies forged the blueprint adopted by the International Sustainability Standards Board's vision of sustainability reporting that prioritised reporting only on those socio-ecological issues deemed to materially affect future enterprise value.
Originality/value
The paper explicates the role of collaborative initiatives in the standardisation of sustainability reporting and shows how these initiatives act as vehicles to subtly undermine the GRI position (presented as one standardiser amongst many whose vision appears as an outlier, despite its position as the dominant sustainability reporting standardiser), and establish the prioritisation of a sustainability reporting worldview based on investor-oriented enterprise value creation. The case also draws attention to the specific orchestrators involved in establishing this prioritisation, and reveals the influence of philanthropic foundations. In doing so, it extends our understanding of legitimacy generation in standard-setting by showing how collaborative initiatives offer private standardisers another means to generate input legitimacy for what, in this case, represented a vision of reporting at odds with most sustainability reporting practice. Finally, the paper extends the sites of power to collaborative initiatives and details the mechanisms through which covert power is exercised but also masked where orchestrators use convening power, funding and membership choices to define the boundaries of discussion by influencing who participates, what is on the agenda and what activity is undertaken. Rather than viewing standardisation as a simple pursuit of conquest between individual standardisers, the paper considers how collaboration provides the opportunity for assimilation.
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Hammed Afolabi, Ronita Ram and Gunnar Rimmel
This study aims to examine the influence and behaviour of the European Financial Reporting Advisory Group (EFRAG)/European Commission, and the International Financial Reporting…
Abstract
Purpose
This study aims to examine the influence and behaviour of the European Financial Reporting Advisory Group (EFRAG)/European Commission, and the International Financial Reporting Standards (IFRS) Foundation/International Sustainability Standards Board in the standardisation of sustainability reporting arena and their implications for the Global Reporting Initiative’s (GRI) current position.
Design/methodology/approach
This paper draws on the arena concept, particularly the work of Renn (1992) and Georgakopoulous and Thomson (2008), to explore the EFRAG and the IFRS Foundation’s behaviour towards the standardisation of the sustainability reporting arena and their implications for the GRI’s current position. Further, the documents and public releases pertinent to the activities and output of the GRI, the EFRAG/European Commission and the IFRS Foundation are used. The documents are screened and analysed based on the key elements of arena concept that emerged, which includes “agenda, claims, network of bodies and group engaged, interaction and behaviour with arena issues (audience, materiality, scope and core priorities, purpose of reporting and relevance to sustainable development)”.
Findings
This study reveals the source of motivation and influence of the new standard setters in the sustainability reporting arena and documents the relevance of their behaviour as an actionable strategy to change the arena rule. Particularly, this paper demonstrates the perceived fall away from driving business behaviour towards the pursuit of sustainable development if the GRI and its standards cease to exist.
Practical implications
The pathway to achieve sustainable development and improve sustainability impact disclosure remains a debatable issue among policymakers and users of sustainability reporting standards. This study reconstructs the awareness of different dynamics at play inhibiting the harmonisation of sustainability reporting standardisation and the importance of the GRI in pursuing global sustainable development.
Social implications
The pattern of behaviour and agenda of sustainability institutions and influential standard setters harnessed in this paper are aimed at enabling the existence of the rules that can uphold the primary focus of the sustainability reporting arena, particularly in achieving global sustainable development.
Originality/value
This paper furthers the understanding of the importance of the GRI in upholding the key tenets and traditional agenda of sustainability reporting and sustainable development.
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Juma Bananuka, Stephen Korutaro Nkundabanyanga, Twaha Kigongo Kaawaase, Rachel Katoroogo Mindra and Isaac Newton Kayongo
The purpose of this study is to examine the extent of and impact of gender diversity and intellectual capital on compliance with Global Reporting Initiative (GRI) sustainability…
Abstract
Purpose
The purpose of this study is to examine the extent of and impact of gender diversity and intellectual capital on compliance with Global Reporting Initiative (GRI) sustainability reporting standards by Uganda manufacturing companies.
Design/methodology/approach
Data were collected from manufacturing firms in Uganda using a questionnaire survey to find out their perception of compliance with the GRI standards. Data were analyzed using statistical package for social sciences, Microsoft Excel and smart partial least squares structural equation modeling (PLS–SEM).
Findings
The results indicate that on average, manufacturing firms in Uganda comply with GRI sustainability reporting standards to the extent of 59%. The results further indicate that manufacturing companies comply more with the GRI 200 (economic performance disclosures) to the extent of 63% as compared with 55% for GRI 300 (environmental performance disclosures) and 58% for GRI 400 (social performance disclosures). The results also indicate that intellectual capital has a significant impact on the GRI-based sustainability performance disclosures in Uganda. However, board gender diversity has no significant effect. In terms of the control variables, only firm size is significant, while firm age, capital structure and auditor type are not.
Originality/value
This study provides first time evidence of the extent of compliance with the GRI sustainability reporting standards using evidence from Uganda – an African developing country. This study widens the understanding of the usage of GRI standards in the preparation of sustainability reports by manufacturing firms in an emerging economy. This study also provides first-time evidence on the role of gender diversity and intellectual capital in GRI-based sustainability performance disclosures using evidence from Uganda's manufacturing sector.
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