Sustainability: an evaluation of reporting, disclosure and performance

Abstract

Aim: A key aim of this thesis is to develop models to evaluate sustainability reporting and performance for both cross sectional and longitudinal comparisons among companies in the same or different industries across a period of time. This study also examines the relationship between sustainability disclosure and performance as well as their relationship with financial performance and tests the possibility of integrating sustainability indicators into a performance measurement system. The research aimed to examine sustainability reporting patterns across the world with more detailed analyses of smaller samples. An object was to identify the most and least reported indicators as well as whether indicators were reported in qualitative or quantitative format. A key objective was to see if quantitative data from sustainability reports could be used to develop models for evaluating sustainability performance. Methods: The study a used triangulation of sources and methods in data collection and model developments. Data was obtained from different sources: the GRI world benchmark database, content analysis of Australian and New Zealand sustainability reports and a survey of Australian and New Zealand organisations. Various methods, such as a uniform system of weights to provide a composite index and data envelopment analysis, were employed to analyse the data and develop the models to compare companies in the sample and study potential relationships. Findings: Analyses identified the most commonly reported GRI indicators in the economic, environmental and social perspectives. The results also revealed those GRI indicators that have not been reported or barely reported. Indices were developed using several models to evaluate the sustainability disclosure level and performance of companies. These found relationships between sustainability disclosure, sustainability performance and financial performance of companies. Results of the analyses showed that in mining and metals companies, there was a positive relationship between sustainability reporting, sustainability performance and financial performance which aligns with economic theories for voluntary reporting. However, in financial services, companies with better financial performance had lower sustainability performance but reported more indicators and in more details in their sustainability reports which is implied by socio-political theories for voluntary reporting. Contribution: This study is one of the largest content analysis study of sustainability reports of companies internationally, using one of the largest database to date. A list of “frequent” and “least frequent” reported indicators was identified. The study contributes models and approaches to develop indices for evaluating sustainability disclosure levels, sustainability performance including sustainability efficiency scores using DEA. Evidence is provided for a relationship between sustainability disclosure and performance as well as between sustainability disclosure and performance with financial performance. It is hoped one contribution will be to motivate researchers and organisations to improve reporting standards so that the models and analyses developed in this thesis can be applied elsewhere.