User needs in sustainability reporting: Perspectives of stakeholders in Ireland

Abstract

By means of a questionnaire survey, this paper ascertains and analyses the views of a number of Irish stakeholders regarding the adequacy and potential of corporate sustainability reporting to meet their information needs and help them hold corporations to account. The study focuses on ascertaining the views of a sample of Irish social and environmental non-governmental organisations (NGOs), who we argue constitute an important group of non-financial stakeholders. This emphasis on examining NGO perceptions represents an attempt to fill a gap in the academic sustainability reporting research literature whereby the views of non-managerial stakeholders are largely absent. The paper represents the second phase of a determined effort to examine the adequacy of sustainability reporting from the perspective of less economically powerful stakeholders in Ireland and responds specifically to O'Dwyer's (2002) call for research to examine the nature of stakeholder demand for sustainability reporting in Ireland in order to inform the future development of Irish sustainability reporting practices. The results present evidence of a widespread demand for mandated, externally verified sustainability reporting in either the annual report or a separate stand-alone report. This demand is primarily driven by a desire to gain knowledge of companies' commitment to responsible business practices but is also, albeit to a lesser extent, influenced by the perceived ability of sustainability reporting to facilitate increased NGO pressure on companies. Current sustainability reporting practice is viewed negatively with regard to its credibility and sufficiency, as well as the opportunities it provides for engagement with companies, particularly among environmental NGO respondents. While respondents tended to be suspicious of corporate motives for sustainability reporting, many were optimistic about the potential for NGO engagement with companies aimed at tackling social and environmental issues and improving current sustainability reporting practice. Drawing on the survey results, the paper makes some recommendations for future research aimed at improving sustainability reporting practices in Ireland and more broadly.

Notes

¹ It is important to note that the term ‘sustainability reporting’, now in common usage, does not accord fundamentally with a ‘true’ development-oriented conception of sustainability (see, Bebbington, 2001). Sustainability is a global concept and is not merely focused on the efficient allocation of resources over time. It also concentrates on a fair distribution of resources and opportunities between the current generation and between present and future generations, and a scale of economic activity relative to its ecological life support systems (Gray and Milne, 2002). Hence, it suggests broader ecosystem-based approaches that require an understanding of cumulative environmental change. So-called ‘sustainability’ reports are organisation-centric but ‘sustainability’ requires a collective and cumulative assessment of economic activity relative to resources base. As Gray and Milne (2002) argue, there is no ‘sustainability reporting’ in the ‘true’ sense of the term in the public domain anywhere in the world due to the exceptional difficulty, or indeed impossibility, of undertaking it (see, Bebbington and Gray, 2001).

² Recently, Deegan and Blomquist (2001) investigated, using a case study, the influence of one of the major environmental organisations in Australia: the World Wide Fund for Nature (WWF) on environmental reporting practices in that context and found evidence of changes in the reporting behaviour of certain Australian minerals companies. Fiedler and Deegan (2002) have also investigated collaborations between the construction industry and four environmental organisations in parts of Australia.

³ Social partnership brings together the government and various ‘social partners’, namely, employers' representatives, trade unions, farmers, and the community and voluntary sector for discussions and negotiations on a range of social and economic issues. These partnerships develop National Agreements on future economic and social development which normally have a three year implementation period. Their inclusive nature is explicitly outlined with the most recent National Agreement aiming to realise a vision for Ireland expressed in terms of: economic inclusion based on full employment, consistent economic development that is socially and environmentally sustainable, and social inclusion and a commitment to social justice and continuing adaptation to change (Department of the Taoiseach, 2003, p. 2).

⁴ For example, entrants to the ACCA awards scheme increased from 11 to 18 companies in 2004. Observations of the increased quality of some of these entrants reflects one of the authors' direct experiences as a member of the ACCA Ireland Environmental Reporting awards scheme from its inauguration in 2000 to the most recent scheme in 2004. Furthermore, the same author has also been asked to advise some industry sectors on the state of sustainability reporting worldwide given certain large companies, especially some large banking institutions, are considering its introduction.

⁵ E-mail communication to one of the authors on 6 October 2004 from Tomas Sercovich, corporate responsibility executive at BITCI. As of 4 November 2004, these reports had not appeared on the company websites.

⁶ The definition provided read as follows: corporate social disclosure (CSD) can be defined as the process by which organisations, particularly business organisations, communicate the social and environmental impacts of their activities, products and services to particular interest groups within society and to society at large.

⁷ We also included a question which asked the respondent to indicate their role in the organisation and how long they had been working with the organisation.

⁸ We fully accept that this size measure is contestable in that ‘membership’ can be defined differently by different NGOs and may in fact mean paid-up ‘supporter’ as opposed to an individual who has a say in the governance of the NGO (see Bebbington et al., 2004, p. 33, for a discussion of this issue). However, it does provide a broad, if ultimately crude indication of the relative size of the NGOs surveyed.

⁹ Some organisations failed to return the questionnaire as they indicated that they had more pressing issues and therefore lacked the time. One of the follow-ups resulted in one of the authors being informed that the questionnaire had been mislaid and, in this instance, another questionnaire was forwarded to the organisation. The follow up of organisations continued up until one month following the original deadline of 30 June.