What Gets Measured Gets Done: Sustainability Reporting in Swedish Retail SMEs

Abstract: Climate change is undoubtedly affecting the planet with sea ice melts, wildfires, and warmer temperatures. Science shows the need for keeping the global temperature at 1.5°C, which calls for a rapid societal and environmental transformation. The retailing industry accounts for a large part of the global greenhouse gas emissions and plays a critical role in the aim of reducing the industry's emissions. To measure its performance, progress and set targets, sustainability reporting plays a key role. The need for transparent retailers showing climate leadership and disclosing its numbers has never been greater. Through a qualitative method, the authors wish to investigate how Swedish retail small and medium-sized enterprises, SMEs, work with sustainability reporting and what the main barriers are. The thesis was conducted as a multiple-case study of seven Swedish retail SMEs. The data collection was made through primary data, interviews, and secondary data, including websites, annual reports and sustainability reports. The study results show a difference within the group of SMEs. Small-sized SMEs, compared to middle-sized SMEs, do not conduct sustainability reports, experience lower customer expectations, and are more affected by the barrier lack of legal requirements. The findings further demonstrated lack of financial, IT, human and knowledgeable resources to be the main barriers for retail SMEs and an organisational challenge of internal communication. Study results found a transparency value-action gap, and findings indicate how it increases by the case companies' perceived risk of greenwashing and decreases by their participation in a sustainability network. The thesis has shed light on the importance and role of sustainability reporting. Finally, the study contributes by increasing the knowledge of how retail SMEs work with sustainability reporting and its related challenges and barriers. This paper broadens the body of research by being both industry and location-specific.