Sustainability Reporting in Multinational Enterprises: Focus on Human Resources and Community

Abstract

Sustainability reporting serves as a means of communication between companies and their stakeholders on sustainability issues. This paper aims to analyse how stakeholders’ expectations and/or considerations and corporate desire to seek legitimacy or acceptance from a specific stakeholder or within a specific area of concern combine to influence multinational enterprises’ sustainability reporting policies and practices. A theoretical sample of three multinational enterprises, i.e., Royal Dutch Shell Plc.; Vodafone Group Plc.; and Volvo Car Corporation is used in this paper. A content analysis of the sustainability reports and/or websites of the sample companies was undertaken. Specifically, we did this by performing an analytical reading to identify human resources sustainability disclosures and community sustainability disclosures, and then analyse to what extent, stakeholders’ expectations and/or considerations and corporate desire to seek legitimacy or acceptance from a specific stakeholder or within a specific area of concern combine to influence sustainability disclosures by the sample companies. This paper finds that most of the sustainability disclosures by the sample companies comprise narratives, with limited attention given to financial information which is consistent with extant studies on sustainability reporting. Some of the sample companies report more comprehensive disclosures than others; corroborating the claim that location- and industry-specific characteristics, including legislations, stakeholders (or societal) expectations influence the contents of sustainability reporting. The findings highlight the managerial discretionary nature of sustainability reporting, which may result in considerable variation in sustainability disclosures across the sample companies in this paper. This paper relied on self-reported sustainability disclosures, as opposed to verifying the activities associated with the claims by the sample companies. Managers of companies can better develop their sustainability disclosure contents by analysing the sources of their legitimacy. The author believes that this is one of few papers to have analysed differences in sustainability disclosures published by companies operating in different industry sectors. This papers therefore offers glimpses of industry sector ‘sustainability context’ that can be used by competitors to improve their sustainability disclosures (or reporting).

Keywords: Corporate social responsibility, Sustainability reporting, Website reporting, Automotive industry, Oil and gas industry, Telecommunications industry

DOI: 10.7176/RJFA/14-19-04

Publication date: November 30^th 2023