Academy of management congress 2015

A LONGITUDINAL ANALYSIS OF THE

SUSTAINABILITY REPORTS OF

BRAZILIAN LISTED COMPANIES

Hong Y Ching, Fábio Gerab and

Christiane Pereira

2015 Academy of Management ConferenceAugust 7-11Vancouver

Research Problem

Are the readers in general and investors paying

attention to the evolution of the quality of the

sustainability reports throughout the years and not

only in a particular year?


Assess the quality and completeness of sustainability

reports

Objective

Period: temporal analysis for the period of 2008-2012

Sample: Brazilian companies listed at ISE (145 companies´reports)


Types of report 2008 2009 2010 2011 2012 TOTAL

Sustainability Reports 14 15 16 15 12 72

Annual report and

Sustainability 10 9 12 16 13 60

Integrated Reporting 0 0 0 3 5 8

Annual Report 1 0 0 0 0 1

Social Responsibility

Report 0 1 1 1 1 4

TOTAL 25 25 29 35 31 145

Reports with External

Assurance 13 14 15 24 24 90

Reports following GRI

Guidelines 21 22 28 35 29 135

ISE Companies from 2008-2012


Hypotheses of the study

H 1 - Information disclosed in Sustainability Reports from 2008 – 2012 has shown consistent improvement.

H 2 - Information disclosed of the economic dimension from 2008 until 2012 has shown consistent improvement.

H 3 - Information disclosed of the environmental dimension from 2008 until 2012 has shown consistent improvement

H 4 - Information disclosed of the social dimension from 2008 until 2012 has shown consistent improvement


What is in it for you?

Understand that the process of reporting may

generate value both for share and stakeholders2015 Academy of Management ConferenceAugust 7-11Vancouver

Why are companies writing these reports?

Because of Stakeholder and Legitimacy Theories

- Generate trust and value for their stakeholders

- Use as a legitimizing tool for the society


Motivations for this study

•Adoption of socially responsible practices are perceived as

competitive advantages to create value in long term

•Investors are paying more attention

•Organizations dedicated to sustainability reporting

•Increase of studies in this field


Literature Review

•Huang and Wang (2010) analysed 116 Chinese firms –

quality of reports has polarized, they need improvement

•Vurro and Perrini (2011) stated that level of disclosure does

not improve firm ability to manage stakeholders

•For Araya et al (2014) disclosing information would help to

reinforce stakeholders´trust.

•Kolk (2014) says there is no unequivocal way to distinguish

greenwash from realistic reporting

•Voluntary sustainability standards such as GRI and the

emergence of IR is a path of no return2015 Academy of Management ConferenceAugust 7-11Vancouver

There has been a mild turnover of companies in ISE list

Research Methodology

Year Experience Nth report

All Companies 1st 2nd 3rd 4th 5th Total

2008 25 0 0 0 0 25

2009 8 17 0 0 0 25

2010 5 7 17 0 0 29

2011 8 4 6 17 0 35

2012 0 8 3 4 16 31

Total 46 36 26 21 16 145


Use of content analysis to search for specific corporate

information and reduce it into exclusive categories.

Use of GRI pre-defined categories for analyzing information

disclosed.

Each topic/information was assigned a score from 0 to 1

using the wording of the sustainability report in the following

way: no coverage (0); sketchy (0,25); systematic (0,5);

extensive (0,75) and integrated (1,0)

Research Methodology


Empirical Analysis – Overall Score Results

Subset N Mean Median Std. Deviation Std Error

All Companies 145 0,497 0,519 0,200 0,017

2008 25 0,418 0,418 0,215 0,043

2009 25 0,460 0,463 0,211 0,043

2010 29 0,472 0,430 0,162 0,030

2011 35 0,535 0,572 0,203 0,034

2012 31 0,573 0,630 0,182 0,033

Economic 145 0,551 0,542 0,224 0,019

Environment 145 0,460 0,457 0,256 0,019

Social 145 0,495 0,526 0,225 0,020

Financials 25 0,494 0,498 0,182 0,036

Infrastructure 67 0,540 0,564 0,161 0,020

Industrial 45 0,442 0,379 0,240 0,036

Services 8 0,463 0,479 0,248 0,088


Post-hoc test for Kruskal among the Years for

the Overall Score

This difference evidences that 2012 reports present overall score

greater than 2008.

So, H1 is accepted – information disclosed has shown improvement

Year

N Mean Rank

Subset for alpha = 0.05

1 22008 25 57,68 57,68

2009 25 64,64 64,64 64,64

2010 29 67,72 67,72 67,72

2011 35 80,34 80,34 80,34

2012 31 88,74

88,74

Total 145


Empirical Dimension Analysis

Moving to hypotheses H2 to H4, correlations between the

report year and each dimension of TBL are significant for

economic and social dimensions.

So H2 and H4 were accepted – consistent improvement from

2008-2012

This improvement was not clear for Environment –

H3 was rejected


Conclusion

Information disclosed in the reports

has shown consistent improvement

as well as for economic and social

dimensions

Companies are gaining experience

as years go by


Conclusion

Final message:

They should use the reporting to build a meaningful

relationship with stakeholders as well as a legitimizing tool

for the Society.


Education

Academy of management congress 2015