The Formalized Aspects Of Sustainability Reporting : A Qualitative Analysis

Abstract: Sustainability reporting (SR) is an activity that is increasingly affecting companies.Governments and larger governing institutions legislate more on SR and constraincompanies to comply with the different standards. These standards describe preciselywhat companies must publish. Yet, our research focuses on the internal aspects ofmanaging SR. Our goal is to reach a deeper understanding of the procedures thatcompanies implement, in the areas of stakeholder engagement, corporate governance andassurance. The aim is to know which parts of SR are formalized. Therefore, we haveconducted 10 semi-structured interviews, of which 8 were with SR managers or officersfrom 10 different companies and in diverse industries.The literature review of SR focuses on different topics such as the history, the differentstandards used, the theories related to SR, the drivers of SR, the management accountingand the best practices. Yet, there is a big research gap in terms of analyzing the managerialprocedures that companies follow to plan, account and report their sustainability data.Therefore, we decided to conduct a qualitative study, to get a better insight of how theprocedures function and what challenges the companies might be facing while doing thisSR. In our findings, in general, we received very similar answers for some topics andspecific results for a few other topics. Stakeholder engagement, corporate governance andthird-party assurance have been analyzed. Another concept has been added to ouranalysis, based on our findings: technology. The results of our studies show that followingaspects are formalized: the materiality assessment, consulting, questionnaires,involvement of board members and executives, the use of documents, the organizationalstructure and the integration of third-party certified audits into the SR. The aspects whichare not yet formalized are the involvement of all stakeholders, awareness, training,communication, internationalization, internal controls, decision-making, involvement ofthe higher hierarchy in the third-party assurance, data collection, storage and calculation.Our main recommendation for managers is to focus on involving all stakeholders. Ourstudy is aimed at all companies that already do SR and that want to get their processeseven more formalized, but also at all companies that are starting with SR