The Role of Impression Management in Sustainability Disclosure: Enhancing Legitimacy for Financial Institutions

Abstract: This study explores the usage of sustainability disclosure in the financial field. Sustainability disclosure has become a relevant practice for companies to display their sustainability commitment, given stakeholder and regulatory pressure in recent years. To date, little attention has been addressed from the research on sustainability disclosure practices in the financial field. To address this gap, this study considers unofficial disclosure means by exploring managerial accounts to outsiders concerning their organizations sustainability commitment. For this purpose, a qualitative study including 18 interviews with leading European executives within the financial field was conducted. This study sheds light on how financial intuitions’ members attempt to legitimize sustainability-related corporate activities to their different stakeholder groups (employees, investors and wider society). In addition, it has been identified three main impression management tactics utilized by financial institutions to establish a favorable corporate image with respect to their sustainability commitment: self-praising, displaying limitations and promises for future commitment, and conformity and differentiation. This study contributes to legitimacy and impression management literature by exploring corporate arguments in an industry which has been neglected by previous research. Moreover, the study has relevant managerial implications for public relations practitioners and corporate culture related matters given the insights it provides concerning managerial discourses about their own company sustainability commitment.