sustainability reporting practices of indian...
TRANSCRIPT
SUSTAINABILITY REPORTING PRACTICES OF INDIAN ORGANISATIONS:
COMPARING PERCEPTIONS OF READERS AND PREPARERS
Prof. R.K. Singha, Geetanjali Batrab
a Professor, Faculty of commerce and Business, Delhi School of Economics, University of
Delhi. Contact No.: 9910970870. E mail address: [email protected]
b Research Scholar, Faculty of commerce and Business, Delhi School of Economics,
University of Delhi. Contact No.: 9873295979. Email address:
Abstract
It is known that corporates impact society, context and environment. It has also been learnt over
period of time that appropriate and consistent reporting of social and environmental concerns is
of vital importance. There have been several surveys on reporting quality but there is paucity of
literature on what readers want. This research tries to find out if sustainability reporting and
disclosure by companies is indeed creating value for stakeholders. This research was
conceptualized to gaze the perceptions of users with the help of a survey to find differences in
perceptions of readers and preparers of sustainability reports in the emerging market of India.
The reader group included investors, NGOs/ environmental organisations, and academicians.
The preparer’s were corporate executives, accounting professionals (CAs/CSs) and consultants.
Data were collected using a structured questionnaire. Responses were analysed using
Independent Sample t Test and ANOVA were used. The analysis pointed certain differences in
the perceptions of readers and preparer’s relating to motivations for reporting, barriers to
reporting, stakeholder engagement, assurance process and sustainability reporting frameworks
and concluded with recommendations to improve the sustainability disclosure quality and the
related processes.
Keywords: sustainability reporting, stakeholder engagement and dialogue, assurance, reporting
frameworks
Section 1: Introduction
Sustainability has emerged as an innovative business paradigm arousing interests of
academicians, practitioners and policy makers (Zadek, 2004). Sustainability is an umbrella term
for several related concepts and its meaning has evolved over time with changes in values. It is
contextual and is influenced by the environment in which an organisation operates (Van
Marrewijk, 2003) ; (McWilliams, 2006). It consists of clearly articulated and communicated
policies and practices of organisations that reflect business responsibility for the wider societal
good (Matten & Moon, 2008).
Several conceptualizations of sustainability have been suggested in the literature; as a social
obligation, as an obligation towards stakeholders, as ethics-driven, and as a managerial process
(Maignan & Ferrell, 2004). Sustainability is defined as a concept whereby organisations
voluntarily decide to contribute to a better society and a cleaner environment by integrating
social and environmental concerns in their business operations and in their interaction with the
stakeholders (European Commission, 2001).
Different stakeholders of an organization may have different interpretations of the sustainability.
The idea of sustainability and its reporting is relative in evolving stages for the business and
investment community. There is a need for a study to explore how users and preparers perceive
corporate sustainability reports and related issues. This study aimed to explore the users’ and the
preparers’ perceptions on sustainability reports and related issues like perceived motivations for
reporting, obstacles in reporting, materiality of contents of the reports, perceptions relating to
quality, credibility, stakeholder engagement, dialogue, assurance and reporting frameworks.
The following section presents a detailed review of literature that led to the development of
research questions and hypotheses. Section 3 describes the objectives and hypothesis of the
study. Section 4 presents the research methodology followed by section 5 that presents the
results of the data analysis. Finally, section 5 provides the summary, contributions and
limitations of the study.
Section 2: Literature review and conceptual framework
The business organisations report the impact of their operations and performance in terms of
economic, social and environmental dimensions, using sustainability reports (Perrini & Tencati,
2006). The holistic approach of corporate to sustainability encompasses economic,
environmental and social issues that have business implications. Sustainability reporting involves
internal monitoring and management and external communication so that organizations are able
to meet the growing information needs of their various stakeholders (Gray R. , 2006). It is being
used as a means to manage and influence the attitudes and perceptions of stakeholders, building
trust and reaping the benefits of positive relationships with stakeholders for business advantage
(Adams & McNicholas, 2007).
Governments, several public sector organisations and stock exchanges have taken initiatives to
encourage sustainability reporting. In European countries like Spain, Sweden, France, Denmark,
United Kingdom, it is mandatory to report on sustainability issues either as a part of annual
report or as a separate stand alone report. In South Africa, it is mandatory for listed companies to
prepare an integrated report wherein both financial and sustainability information is presented
together. In Asia, there is some kind of mandatory requirement on organisations to disclose
sustainability information in India, China, Bangladesh, Japan, Pakistan and Malaysia. Singapore,
Hong Kong and Thailand also have issued guidelines for voluntary disclosure of sustainability
information (Chiat, Aun, & Chi, 2013).
However experience and evidence contradict this assertion. There is general reluctance to
disclose non financial information. It has been rightly pointed that if the reporting of
sustainability initiatives is voluntary, the organisations might not report whereas if it is
mandatory, there may be nominal disclosures only as much are required by law (Singh &
Dhingra, 2014). Mandatory disclosure requirements have the advantage of creating consistency
and symmetry in reporting practices across organisations (Berthelot, Cormier, & Magnan, 2003).
It would lead to minimum level of disclosures to inform and educate the public, helping to create
an audience which could formulate demands for more information and could use the standard-
setting mechanism to make its demands audible.
Organisations disclose more of positive information regarding their performance, but are
reluctant to report negative effects of their operations. Mandatory disclosure requirement may
encourage the organisations to disclose both “good” and “bad” news. This may present a fair
picture of the company as bad news reporting is perceived as commitment to sustainability
(Adams & McNicholas, 2007).
Organisations expect instrumental long term payoffs in terms of long-term profitability by
improving their ability to attract labor, reduced non-financial risks (Merkl-Davies Brennan,
2007) or by improving stakeholder confidence (Du, Bhattacharya, & Sen, 2010). Researchers
have argued that social disclosures are principally used to guard a company’s reputation and
identity by engaging with stakeholders as a form of moral discourse (Reynolds & Yuthas, 2008)
(Balmer & Greyser, 2007; Hooghiemstra, 2000; Vanhamme & Grobben, 2009).
Consistent sustainability performance and communication over several years could influence
reputation and image which in turn can influence company competitiveness (From Tactical to
Strategic How Australian Business Create Value From Sustainability, 2014). Reputation
management has been pointed a major reason for companies to engage in and reporting of
sustainability activities (Gray & Balmer, 1998) (Schwaiger, 2004) (Ellen, Webb, & Mohr, 2006)
(Bebbington, Larrinaga, & Moneva, 2008) (Luo & Bhattacharya, 2006).
Public relations and advertising help the firm communicate the impact of its sustainability
activities to stakeholders. Reporting of sustainability initiatives has a favorable effect on how
stakeholders think and act toward an organisation (Sen, Bhattacharya, & Korschun, 2006).
Organisations are trying to influence the profits by following the ethical route. Knowledge of
sustainability activities may affect the consumers’ attitude towards the company. Such an
organisation is viewed as socially responsible and consumers are more likely to purchase from
them (Sen, Bhattacharya, & Korschun, 2006). It can lead to revenue increases through an
improved brand image, higher sales and market share.
By voluntarily engaging in and advertising the social and environmental initiatives, the
organisations are actually trying to differentiate their products. For Example, TATAs (Prabhakar
& Mishra, 2013), Starbucks (Harnrungchalotorn & Phayonlerd, 2009), Dabur, Mahindra and
Mahindra, Wipro, Infosys (Nayak & Arvind, 2013), TATA Tea, Hindustan Lever (Khan, 2009),
and many more have been extensively investing in and advertising their social and
environmental projects. Sustainability reporting enables marketers to connect with several
stakeholder groups, build long-term relationships and thus create value for the firm
(Bhattacharya & Korschun, 2008) (Ferrell, Gonzalez-Padron, Hult, & Maignan, 2010).
True benefits from reporting can be realised only if actions are taken on material issues identified
in the process which requires integration of sustainability practices into the long term goals of
the company. Contents of sustainability reports may be decided by consultation with
stakeholders and/or by referring to the sustainability reports of other companies in the same
sector and/or by referring to the guidelines of GRI or other frameworks (Adams & Frost, 2008,
December). However, organisations need to be cautious while adapting the report contents from
other geographical regions as the material issues in developed countries are very different from
developing countries due to differences in culture and values (Rahman Belal & Owen, 2007).
Even if there are similarities in the reports of the same sector but the approach and intensity of
the initiatives might be different (Adams & Frost, 2008, December).
Consistency in selection and reporting of issues enables the stakeholders using the report to
compare information reported on economic, environmental, and social performance against the
organizations past performance, its objectives, and against the performance of other
organizations. The reported information should be sufficiently accurate and detailed for
stakeholders to assess the reporting organization’s performance. Timeliness adds value to any
information. The reporting done on a regular schedule and making information available in time
for stakeholders helps them in making informed decisions. The timing of release refers both to
the regularity of reporting as well as its proximity to the happening of actual events (Searcy &
Buslovich, 2014).
The information should be presented in a way that is understandable, accessible, and usable by
the organization’s range of stakeholders. The information and processes used in the preparation
of a report needs to be gathered, recorded, compiled, analyzed and disclosed in a way that could
be subject to examination and that establishes the quality and materiality of the information.
Stakeholders need confidence in the authenticity of the report. This may be possible if the report
contents could be checked to establish their veracity and the extent to which the Reporting
Principles have been applied. A focused message and user friendly format also add to the quality
of the report (Ditz and Ranganathan, 1997; Fiksel et al., 1999).
There have been frequent allegations of green washing and cherry picking while reporting the
sustainability initiatives. This has resulted in low credibility of the information in the
sustainability reports (Dando & Swift, 2003). Lack of confidence in the organisation’s sincerity
and the reliability of data provided leads to credibility gap between stakeholders and
organisations (Owen & O'Dwyer, 2004). A mismatch between the communication in
sustainability reports or annual reports and actual corporate behaviour, results in a credibility gap
(Cerin, 2002).
An expectation gap occurs when the expectations of the users of sustainability as to the contents
and quality of corporate environmental reports and the degree of reliance that can be placed upon
them, exceeds the quantity, quality and reliability of actual information reported by the
companies in these reports (Lean & Rebernak, 2007). Environment reporting expectation gap
was explored in Australia, by Deegan and Rankin by surveying the attitudes of senior executives
of the some largest companies in Australia (the preparers group) as well as the attitudes of
individuals from various categories of annual report users. The comparison of responses showed
significant differences between the views of users and the preparers, in relation to various issues
associated with corporate environmental performance reporting (Deegan & Rankin, 1999).
Similar expectation Gap was found in India in a study based on primary data collected from
Chartered Accountants and 101 large manufacturing companies in India with the help of two
structured questionnaires to examine corporate environmental reporting expectation gap in India
(Pahuja, 2007). Mitchell and Quinn, 2005 also found evidence of expectation gap in selected set
of stakeholders relating to environmental disclosures. They pointed towards a need for enhanced
levels of disclosures and more elaborate guidelines and frameworks. (Mitchell & Quinn, 2005)
To improve stakeholder interpretation, acceptability and comparability, sustainability disclosures
need to be authentically quantified, measured and evaluated against universally accepted
benchmarks, standards and principles (Manetti & Toccafondi, 2012). Assurance therefore adds
value by attesting to the completeness, validity, accuracy, reliability and relevance of
sustainability disclosures. Despite variations in approach, different forms of assurance opinions
and poor disclosure credibility, independent assurance helps bridge the credibility gap in
sustainability reports (Hamadeen, 2007)
Section 3: Objectives of the Study and hypothesis
Objectives of the study is to understand the perceptions of stakeholders about aspects related to
corporate sustainability reporting and compare the perceptions of readers of sustainability reports
with the preparers. The study aims to provide following information:
Objective 1: To understand the sustainability initiatives and reporting practices by Indian
organisations.
Objective 2: What should be the appropriate length of a sustainability report?
Objective 3: How often the information should be provided to stakeholders?
Objective 4: How long does it take for the non financial information to get reflected in financial
performance?
Objective 5: Having a separate committee in the organisation results in preparation of good
quality reports.
Objective 6: Know the stakeholder opinion relating to the issue of integration of financial and
non financial information in a single report
Objective 7: Do investors read and depend on information in sustainability reports while taking
investment decisions
Objective 8: What are the perceived motivations and the obstacles in taking up sustainability
initiatives by Indian organisations
Objective 9: What aspects add to quality of reporting?
Objective 10: How to make report credible?
Objective 11: Does the process of getting the report assured from an independent third party add
to credibility?
Objective 12: Given the increasing role of internet and web services, is there a more effective
means to provide needed information to different stakeholders?
Objective 13: What are the more effective means of stakeholder engagement and how to have a
dialogue with stakeholders?
Objective 14: How do stakeholders perceive GRI and other reporting frameworks
By comparing the perceptions of the readers and preparers of sustainability reports on the above
mentioned issues, the objective of this study is to identify some expectation gaps. With above
mentioned broad outline, following hypothesis were constructed.
Null Hypothesis: There is no statistically significant difference between perceptions of preparers
and expectations of readers and others regarding the issues in sustainability reporting.
Alternate Hypothesis: There is a statistically significant difference in perceptions of preparers
and expectations of readers and others regarding the issues in sustainability reporting.
To collect data and fulfill these goals, a primary survey was done with stakeholders of
sustainability reports to assess their information needs and capture the expectations of readers
and find the perceptions of preparers with respect to issues of sustainability reporting.
Section 4: Research Design and methods
This research is an attempt to understand the gap in perceptions of the stakeholders of corporate
sustainability and its reporting. The stakeholders were categorised as readers, preparers and
others.
The present research can be classified as both exploratory and descriptive. An exploratory
research lays the initial groundwork for future research. We are exploring the reader’s
expectations and the preparer’s perception of sustainability reports and the resulting expectation
gap. A descriptive research enables describing a phenomenon.
Primary data was collected from stakeholders with the help of structured questionnaires.
Stakeholders of the sustainability initiatives and reporting by corporates comprises of the entire
population of the country which is impossible to sample (Mitchell C. G., 2010). Thus the study
focuses on certain key groups. Stakeholders have been broadly categorized as readers of the
sustainability reports and preparers of sustainability reports and others. Reader group of
stakeholders include shareholders and investors, academics and research scholars, society, media
and government who have come across a standalone sustainability report or some sustainability
related information in annual report. Preparer stakeholders include managers, accountants and
members of consultant organisations who have experienced the report preparation process. A
third category of respondents was created who were neither readers nor preparers but as
members of the society are aware of the current developments in the area and are indirectly
affected by corporates. They were named as “significant others”. The opinion regarding the
reporting practices being followed by the organisations was captured using a structured
questionnaire.
While administering the questionnaire, purposive convenience sampling was used. It was
ensured that the respondents included in the sample are older than 18 years of age and should be
willing to participate. For readers, they should have read some sustainability report or
sustainability disclosures in annual reports and for preparers they must be involved in the report
preparation process. If they have neither experienced report preparation process nor read a report
but are aware of the issues, they were categorised into a third category as others.
The Questionnaire was developed to gather information from the respondents about their
expectations and perceptions relating to sustainability disclosures by the organisations.
Structured questionnaire was prepared after a thorough review of past studies to identify the
variables relevant to the study (Deegan & Rankin, 1997) (Mitchell & Hill, 2010). The
questionnaire items were taken from previous studies and modified to make them appropriate in
Indian context. Related items were organised into sections to increase the readability and
comprehension of the questionnaire by the respondents.
At the beginning of the questionnaire, a brief introduction of the research area was given and the
confidentiality of the respondents was assured. It was specified that the objective of the research
is to capture the perceptions and there is no right or wrong answer. The questions were self
explanatory and the instructions were unambiguous and easy to follow.
The length of the survey questionnaire influences the response rates and consequently the
outcome of the survey. It was kept to 5 printed pages which is considered a moderate length.
The Questionnaire was divided into 5 sections. The first section of the questionnaire was
designed to get demographic information from the respondents. Besides the customary
demographic information like name, gender, age, education, monthly income, profession and
professional experience, a question was asked regarding their involvement and awareness about
the corporate sustainability initiatives. The respondents were asked questions relating to their
occurrence of having read sustainability disclosures and their experience of having been involved
in the report preparation process. This information was used to categorize them as a reader or a
preparer of sustainability report.
Section II of the questionnaire was to capture perceptions relating to the reports like perceived
benefits of sustainability reporting, why organisations do not report, what contents are important,
quality and credibility perceptions. Section III asked about stakeholder engagement, section IV
about assurance and Section V about sustainability reporting frameworks.
The measurement of the questionnaire was based on the Likert scale. The Likert scale method
involves a taking opinion on set of statements that express and communicate levels of agreement
associated with each question. A five-point scale is adopted in this study to represent the
expectations and perceptions of the stakeholders with 1 representing Strongly Disagree, 2
representing Disagree, 3 for neutral, 4 for Agree and 5 for Strongly Agree.
By selecting a number on a five point scale, participants can indicate whether they agree or
disagree (feel important or not important), with each statement. The choices were coded with
these numbers for data analysis.
To obtain maximum responses, the questionnaires were administered both in person and through
personalized emails with attached web enabled version of the questionnaire on Google drive
which could be filled in and submitted online to the researcher. The web-based self-completion
questionnaire prepared on Google drive was chosen to facilitate the survey process and data
storage.
Personalized emails were sent out individually to each company’s contact person or designated
email address for sustainability issues from published sustainability reports. The contact
information of professional was obtained from several user lists. Social media was also used for
data collection. The link to the questionnaire was posted on the wall of several CA and CS
groups on Face Book with a request to fill it. The questionnaire was posted on several informal
online professional groups. Regional centers of CS were approached to get data from CS who
have recently qualified CS exam and are participating in orientation programme.
Follow-up personalized email was sent to everyone on the list as a reminder after two weeks of
the starting date of survey, excluding participants who notified of having completed the survey.
The original email message was included in the content of a follow-up email after the
researcher’s information to increase the response rate. The link and a request to fill it was also
posted on the relevant social media pages after 2 weeks.
Reliabi lity and validity are important to the survey method because both ensure that a
questionnaire is able to generate an accurate and meaningful answer to the research question
pursued (Dyer, 1995, p.127).
Validity relates to the accuracy of the questionnaire. It is the extent to which the survey questions
in the instrument are relevant to the information being tested (OAG, 2007) (Dawson & Trapp,
2004, p.289). For the purpose of this research, both face validity and content validity of the
questionnaire was tested. Face validity demonstrates that an instrument measures what it tries to
measure (Dawson & Trapp, 2004). The questionnaire was discussed with ten respondents to
ensure instrument consistency. The content validity of the instrument is achieved by discussing
the questionnaire items with experts in the subject and requires general agreement of the experts
about the content and the language of the questions so that the respondents perceive the same
meaning from the same question. This was judged by professors and PhD research scholars.
They were asked to rate each item for its relevance and assess each item for clarity and
conciseness. They were requested to read the questionnaire and suggest improvements in the
semantics of the statements. Based on their opinion, some items were deleted, added and
modified. After several modifications to improve clarity of meaning of the phrases in the
questionnaire, the final version was administered.
Reliability is the degree of consistency with which an instrument measures the variables it is
designed to measure. It represents dependability, predictability and consistency in the data
gathering process. Reliability keeps the results of the study predictable and consistent without
errors (Billings & Halstead, 2005). In order to be reliable, the researcher needs to ensure the
obtained responses are consistent from individual to individual and stable over the participants’
responses (Punch, 2003). There are two main methods to measure reliability. First, internal
consistency reliability indicates “how strongly the items are related to one another” (Dawson &
Trapp, 2004, p.289). To measure reliability, Cronbach's alpha (Cronbach, 1951) and Guttman’s
Split half coefficient is used. Cronbach's alpha measures how well a set of variables measures a
single, one-dimensional latent construct (SPSSFAQ). For comparing groups, values of 0.7 to 0.8
are regarded as satisfactory (Cronbach, 1951). The reliability results are shown below:
Table 1: Reliability results for the scales used in the study
Item Number of
statements
Cronbach Alpha
Value
Guttman split
half Coefficient
Perceived benefits of preparing
sustainability reports
8 .727 .615
Perceived barriers 10 .840 .731
Contents of a sustainability report 10 .823 .652
Quality of report 3 .589 .539
Credibility of report 11 .783 .642
Stakeholder engagement 4 .732 .746
Stakeholder dialogue 7 .817 .682
Assurance 7 .826 .782
GRI framework 5 .800 .733
Other frameworks 4 .737 .755
Section 3: Analysis and Results
The data collected from 202 respondents was analyse to derive meaningful results.
Testing for assumptions
The data was tested for assumptions of normality using Kolmogorov Smrinov test and
homogeneity of variance using Levene’s test.
Table 2: Analysis of perceptions relating to benefits of sustainability reporting
Perceived Benefits Stakeholder
Category
N Mean SD F P
Positive image
Reader 100 4.11 .852
Preparer 56 3.84 .987 2.149 .119
Others 46 4.13 .653
Total 202 4.04 .857
Higher revenues Reader 100 3.61 .827
Preparer 56 3.34 .940 2.084 .127
Others 46 3.63 .853
Total 202 3.54 .870
Attract investment Reader 100 3.92 .813
Preparer 56 3.77 .874 1.480 .230
Others 46 3.67 .896
Total 202 3.82 .851
Better employee
engagement
Reader 100 3.82 .770
Preparer 56 3.70 .893 .537 .585
Others 46 3.72 .688
Total 202 3.76 .787
Meet competitive pressure
Reader 100 3.86 .804
Preparer 56 3.88 .764 3.746 .025
Others 46 3.48 1.005
Total 202 3.78 .855
Meet legal requirement
Reader 100 4.17 .739
Preparer 56 3.96 .713 3.239 .041
Others 46 3.85 .842
Total 202 4.04 .765
Sense of duty towards society
Reader 100 4.13 .706
Preparer 56 3.98 .798 1.176 .311
Others 46 3.93 .975
Total 202 4.04 .800
Required by all stakeholders
Reader 100 3.88 .891
Preparer 56 3.84 .848 1.780 .171
Others 46 3.59 .933
Total 202 3.80 .892
Table 3: Analysis of perceptions relating to reasons for not preparing sustainability
reporting
Perceived Reasons for not preparing sustainability
reports
Stakeholder Category
N Mean SD F P
Irrelevant/ not required
Reader 100 3.04 1.127
Preparer 56 2.61 1.021 3.703 .026
Others 46 3.13 1.108
Total 202 2.94 1.109
Expensive Reader 100 3.66 .913
Preparer 56 3.27 1.018 3.764 .025
Others 46 3.70 .891
Total 202 3.56 .951
Time consuming Reader 100 3.90 .810
Preparer 56 3.36 1.103 7.111 .001
Others 46 3.91 .915
Total 202 3.75 .951
Not mandatory Reader 100 3.87 .960
Preparer 56 3.63 1.137 1.083 .341
Others 46 3.80 .910
Total 202 3.79 1.002
Lack of precise guidelines/standards
Reader 100 3.86 .876
Preparer 56 3.36 1.034 6.925 .001
Others 46 3.93 .800
Total 202 3.74 .933
Difficulty in measuring the
Reader 100 3.61 .984
Preparer 56 3.32 1.081 2.173 .117
environmental and social impacts
Others 46 3.72 1.047
Total 202 3.55 1.032
Risk of misinterpretation
Reader 100 3.32 1.024
Preparer 56 3.21 1.057 1.957 .144
Others 46 3.59 .717
Total 202 3.35 .977
Unclear and numerous issues in sustainability
Reader 100 3.58 .976
Preparer 56 3.45 1.060 .513 .599
Others 46 3.63 .878
Total 202 3.55 .977
Low readership Reader 100 3.50 .980
Preparer 56 3.20 1.069 2.449 .089
Others 46 3.61 1.000
Total 202 3.44 1.017
No clear financial return
Reader 100 3.72 1.092
Preparer 56 3.27 1.104 4.251 .016
Others 46 3.80 .910
Total 202 3.61 1.074
Table 4: Analysis of perceptions relating to contents of sustainability reports
Perceived contents of sustainability
reports
Stakeholder Category
N Mean SD F P
Conservation of natural resources
Reader 100 4.30 .689
Preparer 56 4.18 .664 1.692 .187
Others 46 4.41 .498
Total 202 4.29 .646
Management of
waste and
pollutants
Reader 100 4.29 .640
Preparer 56 4.09 .793 2.506 .084
Others 46 4.37 .572
Total 202 4.25 .677
Investment in community development
activities
Reader 100 4.16 .581
Preparer 56 3.91 .668 4.803 .009
Others 46 4.28 .688
Total 202 4.12 .643
Environment friendly innovation
in product/ processes
Reader 100 4.28 .712
Preparer 56 4.04 .687 2.104 .125
Others 46 4.20 .749
Total 202 4.19 .717
Consumer health and safety
Reader 100 4.23 .763
Preparer 56 3.95 .749 2.699 .070
Others 46 4.17 .677
Total 202 4.14 .747
Human rights and decent work
practices
Reader 100 3.98 .804
Preparer 56 3.55 .851 7.443 .001
Others 46 4.13 .778
Total 202 3.90 .837
Stakeholder engagement
Reader 100 3.79 .880
Preparer 56 3.43 .892 3.945 .021
Others 46 3.87 .909
Total 202 3.71 .903
Supply chain management
Reader 100 3.70 .916
Preparer 56 3.48 .853 1.259 .286
Others 46 3.72 .911
Total 202 3.64 .899
Corporate governance
Reader 100 4.10 .882
Preparer 56 3.91 .837 .864 .423
Others 46 4.02 .856
Total 202 4.03 .863
Economic profits and cash flows
Reader 100 3.96 .840
Preparer 56 3.82 .811 .877 .418
Others 46 3.78 .917
Total 202 3.88 .850
Table 5: Analysis
of perceptions
relating to quality
aspects of
sustainability
reports Perceived quality aspects
sustainability reports
Stakeholder Category
N Mean SD F P
Comprehensible language
Reader 100 4.02 .752
Preparer 56 3.70 .784 3.324 .038
Others 46 3.80 .859
Total 202 3.88 .795
Balance between positive and
negative information
Reader 100 3.77 .763
Preparer 56 3.70 .807 .483 .618
Others 46 3.85 .759
Total 202 3.77 .773
Visually attractive report
Reader 100 3.74 .895
Preparer 56 3.71 .756 .618 .540
Others 46 3.89 .948
Total 202 3.77 .870
Table 6: Analysis of perceptions relating to credibility aspects of sustainability reports
Perceived credibility sustainability reports
Stakeholder Category
N Mean SD F P
Consistency in issues reported to enable
comparison
Reader 100 4.14 .725
Preparer 56 3.75 .745 6.693 .002
Others 46 4.17 .570
Total 202 4.04 .718
Timeliness Reader 100 4.05 .783
Preparer 56 3.96 .687 1.675 .190
Others 46 4.22 .513
Total 202 4.06 .706
Accurate information
Reader 100 4.04 .764
Preparer 56 4.05 .699 1.327 .268
Others 46 4.24 .603
Total 202 4.09 .714
Inclusion of bad news like poor performance, adverse news coverage,
accidents etc.
Reader 100 3.66 .934
Preparer 56 3.64 .773 .006 .994
Others 46 3.65 1.037
Total 202 3.65 .914
Inclusion of self critical steps, learning etc.
Reader 100 3.70 .810
Preparer 56 3.55 .872 1.510 .223
Others 46 3.83 .643
Total 202 3.69 .796
Inclusion of quotes of well known people/interviews with
stakeholders/activists
Reader 100 3.71 .686
Preparer 56 3.64 .883 .426 .653
Others 46 3.78 .758
Total 202 3.71 .759
Awards/rating agency
scores
Reader 100 3.90 .644
Preparer 56 3.84 .757 .666 .515
Others 46 4.00 .760
Total 202 3.91 .703
Quantitative data and
targets
Reader 100 3.84 .762
Preparer 56 3.98 .798 .620 .539
Others 46 3.93 .879
Total 202 3.90 .798
Use of serious imagery
and language in the report
Reader 100 3.46 .979
Preparer 56 3.63 .822 1.446 .238
Others 46 3.72 .834
Total 202 3.56 .908
Regular materiality assessment by organisation to identify
and report material issues
Reader 100 3.78 .811
Preparer 56 3.71 .825 .187 .829
Others 46 3.80 .719
Total 202 3.77 .792
Use of eXtensible Business Reporting Language to prepare the
report
Reader 100 3.44 .988
Preparer 56 3.27 1.104 .595 .553
Others 46 3.43 .860
Total 202 3.39 .993
Table 8: Analysis of perceptions relating to securing stakeholder engagement while reading
sustainability reports
Perceptions relating to securing stakeholder
attention while reading sustainability reports
Stakeholder Category
N Mean SD F P
Brief overviews
Reader 100 3.94 .600
Preparer 56 3.96 .602 1.006 .367
Others 46 4.09 .551
Total 202 3.98 .590
Moving
images(film/animation)
Reader 100 3.74 .691
Preparer 56 3.89 .908 2.548 .081
Others 46 4.04 .759
Total 202 3.85 .778
Videos on sustainability
Reader 100 3.93 .728
Preparer 56 4.05 .883 .599 .550
Others 46 4.04 .729
Total 202 3.99 .773
Light music as users
browse
Reader 100 3.22 .824
Preparer 56 3.39 1.056 1.155 .317
Others 46 3.43 .886
Total 202 3.32 .908
Table 9: Analysis of perceptions relating to Stakeholder Dialogue in sustainability
reporting
Perceptions relating to Stakeholder Dialogue in
preparation of sustainability reports
Stakeholder Category
N Mean SD F P
Providing contact information of company
Reader 100 3.96 .790
Preparer 56 3.93 .599 .250 .779
Others 46 3.87 .687
Total 202 3.93 .716
Seeking feedback through online feedback form
Reader 100 4.01 .785
Preparer 56 3.96 .602 .075 .927
Others 46 4.00 .667
Total 202 4.00 .709
Option to give comments
Reader 100 4.10 .835
Preparer 56 3.93 .420 1.467 .233
Others 46 4.13 .542
Total 202 4.06 .681
Option to rate content Reader 100 4.08 .692
Preparer 56 3.91 .668 1.213 .299
Others 46 3.96 .729
Total 202 4.00 .695
Offering email updates on
sustainability issues
Reader 100 3.88 .782
Preparer 56 3.75 .694 .672 .512
Others 46 3.76 .822
Total 202 3.82 .767
Automatic updates Reader 100 3.78 .894
Preparer 56 3.61 .755 .921 .400
Others 46 3.63 .878
Total 202 3.70 .854
Reader 100 3.92 .800
Option to share content using social media
Preparer 56 3.77 .632 2.668 .072
Others 46 3.61 .856
Total 202 3.81 .777
Table 10: Analysis of perceptions relating to Assurance in sustainability reporting
Perceptions relating to
assurance of sustainability reports
Stakeholder
Category
N Mean SD F P
‘Reasonable Assurance’
instead of ‘Limited Assurance’
Reader 100 3.58 .768
Preparer 56 3.59 .826 .068 .935
Others 46 3.63 .741
Total 202 3.59 .775
Personal visits to offices in
addition to desk research
Reader 100 3.87 .787
Preparer 56 3.68 .811 1.333 .266
Others 46 3.72 .655
Total 202 3.78 .768
Use of assurance standards like
ISAE3000, AA1000AS etc.
Reader 100 4.01 .703
Preparer 56 3.82 .741 1.824 .164
Others 46 3.83 .608
Total 202 3.92 .697
Declaration of Independence Reader 100 3.87 .800
Preparer 56 3.64 .773 1.678 .189
Others 46 3.83 .608
Total 202 3.80 .755
Declaration of methodology Reader 100 3.970 .7311
Preparer 56 3.679 .7653 2.754 .066
Others 46 3.783 .8670
Total 202 3.847 .7799
Recommendations and
opinions
Reader 100 3.96 .816
Preparer 56 3.79 .756 1.259 .286
Others 46 3.80 .542
Total 202 3.88 .746
Elaborate assurance conclusions
Reader 100 3.99 .732
Preparer 56 3.86 .749 1.568 .211
Others 46 3.78 .554
Total 202 3.91 .703
Table 11: Analysis of perceptions relating to GRI in sustainability reporting
Perceptions relating to GRI framework for
sustainability reports
Stakeholder Category
N Mean SD F P
The information to be reported on GRI framework is measurable
Reader 100 23.61 39.072
Preparer 56 22.46 38.186 1.657 .193
Others 46 12.00 27.489
Total 202 20.69 36.675
GRI guidelines are easy to follow
Reader 100 23.51 39.125
Preparer 56 20.27 37.049 .716 .490
Others 46 15.63 32.653
Total 202 20.82 37.123
Implementing GRI guidelines is cost effective
Reader 100 23.51 39.124
Preparer 56 20.48 36.947 .356 .701
Others 46 18.07 34.675
Total 202 21.43 37.438
GRI framework forms a sound reporting basis
Reader 100 23.85 38.947
Preparer 56 20.82 36.786 .703 .496
Others 46 16.07 32.483
Total 202 21.24 36.921
The G4 version of GRI is a significantly advanced reporting
framework
Reader 100 23.66 39.044
Preparer 56 20.70 36.846 .685 .505
Others 46 15.96 32.523
Total 202 21.08 36.993
Table 12: Analysis of perceptions relating to other reporting frameworks in sustainability
reporting
Other sustainability reporting Stakeholder N Mean SD F P
frameworks Category
Business Responsibility Reporting framework by National Voluntary
Guidelines on Social, Environmental and Economic Responsibilities of Business
(NVG – SEE) is better for Indian Companies
Reader 100 21.71 37.628
Preparer 56 18.93 35.361 .201 .818
Others 46 18.04 34.682
Total 202 20.10 36.214
ISO 26000 represents a good
reporting framework
Reader 100 20.76 36.848
Preparer 56 19.04 35.314 .099 .905
Others 46 18.09 34.663
Total 202 19.67 35.781
UN Global Compact Principles
form a good reporting Framework
Reader 100 20.74 36.857
Preparer 56 18.88 35.386 .098 .907
Others 46 18.17 34.626
Total 202 19.64 35.797
Carbon Disclosure Project is an
excellent tool for carbon disclosures
Reader 100 20.97 36.752
Preparer 56 19.04 35.316 .103 .902
Others 46 18.35 34.554
Total 202 19.84 35.710
Conclusions
The results reveal that there is no significant difference in the perceptions of the readers,
preparers and others for sustainability reporting practices by corporates
Limitations of the study
The study is based on primary data collected using a structured questionnaire. It is always a
challenge to select the right issues and frame them into questions, and identify the right
respondents who are aware of the issues in sustainability reporting practices and could give an
informed perception. Some respondents pointed that the instrument is slightly lengthy. Due to
time constraints, we has to restrict to the sample size of 202. The study focussed on
understanding the perceptions of the stakeholders and was not intended to resolve the
issues and concerns.
References
Adams, C. A., & Frost, G. R. (2008, December). Integrating sustainability reporting into management
practices. In Accounting Forum , Elsevier. , 32 (4), 288 - 302.
Adams, C. A., & McNicholas, P. (2007). Making a difference: Sustainability reporting, accountability and
organisational change. Accounting, Auditing & Accountability Journal , 20 (3), 382-402.
Bebbington, J., Larrinaga, C., & Moneva, J. M. (2008). Corporate social reporting and reputation risk
management. Accounting, Auditing & Accountability Journal , 21 (3), 337-361.
Berthelot, S., Cormier, D., & Magnan, M. (2003). Environmental disclosure research: review and
synthesis. Journal of Accounting Literature, 22, 1. , 22 (1), 1-44.
Bhattacharya, C. B., & Korschun, D. (2008). Stakeholder marketing: Beyond the four Ps and the
customer. Journal of Public Policy & Marketing , 27 (1), 113-116.
Cerin, P. (2002). Communication in corporate environmental reports. Corporate Social Responsibility and
Environmental Management , 9 (1), 46 - 65.
Chiat, H. S., Aun, K. T., & Chi, W. D. (2013). Perception of preparers and users on sustainability reporting
in Singapore. Journal of Education and Vocational Research , 4 (6), 174-183.
Dando, N., & Swift, T. (2003). Transparency and assurance minding the credibility gap. Journal of
Business Ethics , 44 (2-3), 195-200.
Deegan, C., & Rankin, M. (1999). The environmental reporting expectations gap: Australian evidence.
The British Accounting Review, 31(3), 313-346. The British Accounting Review , 31 (3), 313-346.
Deegan, C., & Rankin, M. (1997). The materiality of environmental information to users of annual
reports. Accounting, Auditing and Accountability Journal , 10 (4), 562-583.
Ellen, P. S., Webb, D. J., & Mohr, L. A. (2006). Building corporate associations: Consumer attributions for
corporate socially responsible programs. Journal of the Academy of Marketing Science , 34 (2), 147-157.
European Commission. (2001). Promoting a European Framework for Corporate Social Responsibility:
Green Paper. Office for Official Publications of the European Communities.
Ferrell, O. C., Gonzalez-Padron, T. L., Hult, G. T., & Maignan, I. (2010). From market orientation to
stakeholder orientation. Journal of Public Policy & Marketing , 29 (1), 93-96.
Gray, E. R., & Balmer, J. M. (1998). Managing corporate image and corporate reputation. Long Range
Planning , 31 (5), 695 - 702.
Gray, R. (2006). Social, environmental and sustainability reporting and organisational value creation?
Whose value? Whose creation?. Accounting, Auditing & Accountability Journa , 19 (6), 793-819.
Hamadeen, R. M. (2007). Assurance of corporate stand-alone reporting: evidence from the UK. Doctoral
dissertation, University of St Andrews.
Harnrungchalotorn, S., & Phayonlerd, Y. (2009). Starbucks with Corporate Social Responsibility (CSR).
Retrieved June 13, 2016, from www.diva-portal.org: http://www.diva-
portal.org/smash/get/diva2:353800/fulltext02
Khan, S. (2009). Corporate social performance of Indian FMCG companies. Available at SSRN 1594507. ,
2-48.
Lean, R. M., & Rebernak, K. (2007). Closing the credibility gap: The challenges of corporate responsibility
reporting. Environmental Quality Management , 16 (4), 1-6.
Luo, X., & Bhattacharya, C. B. (2006). Corporate social responsibility, customer satisfaction, and market
value. Journal of marketing , 70 (4), 1-18.
Maignan, I., & Ferrell, O. C. (2004). Corporate social responsibility and marketing: An integrative
framework. Journal of the Academy of Marketing science , 32 (1), 3-19.
Malley, A., King, A., & Whitaker, V. (2014). From Tactical to Strategic How Australian Business Create
Value From Sustainability. Australia: Global Reporting Initiative Focal Point Australia.
Manetti, G., & Toccafondi, S. (2012). The role of stakeholders in sustainability reporting assurance.
Journal of Business Ethics , 107 (3), 363-377.
Matten, D., & Moon, J. (2008). “Implicit” and “explicit” CSR: a conceptual framework for a comparative
understanding of corporate social responsibility. Academy of management Review , 33 (2), 404-424.
McWilliams, A. S. (2006). Corporate social responsibility: Strategic implications. Journal of management
studies , 43 (1), 1-18.
Mitchell, C. G. (2010). An exploratory analysis of stakeholders’ expectations and perceptions of
corporate social and environmental reporting in South Africa. South African Journal of Accounting
Research , 24 (1), 49-78.
Mitchell, C. G., & Hill, T. R. (2010). An exploratory analysis of stakeholders' expectations and perceptions
of corporate social and environmental reporting in South Africa. S A Journal of Accounting Research , 24
(1), 49-78.
Mitchell, C., & Quinn, N. W. (2005). Environmental reporting disclosure in South Africa: A comparative
study of the expectations of selected groups of preparers and users. Meditari Accountancy Research , 13
(2), 17 - 33.
Nayak, V., & Arvind, S. (2013). INVESTOR ATTITUDES TOWARDS STRATEGIC CORPORATE SOCIAL
RESPONSIBILITY OF INDIAN COMPANIES. AL-SHODHANA, A Multi Disciplinary Refereed Research Journal ,
1 (1), 97-105.
Owen, D., & O'Dwyer, B. (2004). Assurance statement quality in environmental, social and sustainability
reporting: A critical evaluation of leading edge practice. 40.
Pahuja, S. (2007). Corporate Environmental Reporting Expectation Gap: Evidence from India. The IUP
Journal of Accounting Research and Audit Practices , 6 (2), 21-42.
Perrini, F., & Tencati, A. (2006). Sustainability and stakeholder management: the need for new corporate
performance evaluation and reporting systems. Business Strategy and the Environment , 15 (5), 296-308.
Prabhakar, R., & Mishra, S. (2013). A Study of Corporate Social Responsibility in Indian Organization: An-
Introspection. In 21st International Business Research Conference, organized by Ryerson University.
Canada.
Rahman Belal, A., & Owen, D. L. (2007). The views of corporate managers on the current state of, and
future prospects for, social reporting in Bangladesh: An engagement-based study. Accounting, Auditing
& Accountability Journal , 20 (3), 472-494.
Schwaiger, M. (2004). Components and parameters of corporate reputation-an empirical study.
Schmalenbach business review , 56, 46 - 71.
Searcy, C., & Buslovich, R. (2014). Corporate perspectives on the development and use of sustainability
reports. Journal of business ethics , 121 (2), 149-169.
Sen, S., Bhattacharya, C. B., & Korschun, D. (2006). The role of corporate social responsibility in
strengthening multiple stakeholder relationships: A field experiment. Journal of the Academy of
Marketing science , 34 (2), 158-166.
Singh, A. K., & Dhingra, P. (2014). A multi-dimensional ethical approach to accounting and reporting
practices. . Applied Studies and Agribusiness and Commerce APSTRACT , 7 (4-5), 13 - 26.
Van Marrewijk, M. (2003). Concepts and definitions of CSR and corporate sustainability: Be tween agency
and communion. Journal of business ethics , 44 (2-3), 95-105.
Zadek, S. (2004). The path to corporate responsibility. Harvard business review , 82 (12), 125-133.