Susanne Arvidsson

Docent, Centrumföreståndare

An exposé of the challenging practice development of sustainability reporting : From the first wave to the EU directive (2014/95/EU)

Författare

Susanne Arvidsson

Redaktör

Susanne Arvidsson

Summary, in English

This chapter sets out to give an exposé of how sustainability reporting has developed into a global reporting practice. It gives a theoretical background to why companies (should) engage in sustainability reporting. Three arguments for providing sustainability reporting are at focus i) gaining, maintaining and/or repairing legitimacy, ii) improving stakeholder relations and iii) decreasing information asymmetry. Although sustainability reporting today has become a global reporting practice, this practice has been criticised throughout the years. The chapter highlights different types of critique: critique against companies’ engagement in sustainability activities per se, critique against sustainability reporting being mere window-dressing (green-, blue- or even SDG-washing) and critique against the poor informational quality of sustainability reporting. This leads the way to a focus on how a new set of voluntary-sustainability standards has been developed to help companies to implement, manage and report on sustainability activities. Using the framework by Behnam and MacLean (2011), three types of voluntary-sustainability standards are discussed: principle-, reporting- and certification-based standards. Attempts to develop mandatory requirements are also at focus in this discussion. In the latter part of the chapter, a financial market perspective is put on sustainability reporting. This reveals how the scepticism among the actors on the financial markets has decreased as the global sustainable investment market has increased. The chapter ends with highlighting the EU Directive (2014/95/EU), which from financial year 2017 mandates the largest EU companies to provide sustainability information in their corporate reports. This raises the question, whether the Directive will be able to enhance the informational quality of sustainability reporting.

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