Page 174 - Sustainability Communication Interdisciplinary Perspectives and Theoritical Foundations

14 Corporate Sustainability Reporting 157

extra-financial reporting initiatives varies greatly and changes fairly fast and
often. Owen and O’Dwyer (2008) see a tendency for ‘corporate responsibility’ to
displace ‘sustainability’ and ‘social and environmental’. More recently, ‘envi-
ronmental, social and governance’ (ESG) seems to have become the term of
choice (UNEP et al. 2010). In consequence, management is challenged to define
and communicate its understanding of corporate sustainability and establish an
approach to identify contextual priorities of non- or extra-financial reporting.
• The complexity of corporate sustainability as a set of interrelated goals leads to
problems for management in operationalisation, measurement and communica-
tion. It is often difficult to identify and analyse sustainability issues as this requires
a change in current and traditional thinking and perceptions. Moreover, little is
known about the implementation of accounting and information management sys-
tems that would provide a comprehensive basis to identify and report on sustain-
ability issues as well as about how to link strategic analysis and management with
information management, corporate accounting and sustainability reporting.
• Sustainability reporting often focuses on performance measurement and lacks
responsiveness to stakeholder concerns by leaving out impacts of corporate
activities that are material to key stakeholder groups. The question of course arises
as to whether the potential for corporate sustainability reporting to demonstrate
accountability for material social and environmental impacts is somewhat limited
by nature. As Gray (2006) states, “Precise, reliable statements of organisations’
sustainability are oxymorous. Sustainability is a planetary, perhaps regional, certainly
spatial concept and its application at the organisational level is difficult at best.”
Interesting attempts to integrate various societal actors within reporting have
recently been made in Italy with the concept of the “bilancio sociale territoriale” –
expressing a commitment to report on impacts more broadly.
• There is a two-fold information asymmetry between the company and its stake-
holders. Stakeholders can often access information about the sustainability of a
company only with difficulty and its acquisition can involve very high costs in
both time and money (Schaltegger 1997). This information asymmetry tends to
create a climate of low credibility. On the contrary, companies may not always
have sufficient knowledge about the information needs of stakeholders. As a result
sustainability reports do not always meet stakeholders’ information needs and
often only a small part of the desired readership is actually contacted (ECC 2003).
Although the latter is a common fate of communication it is interesting to note
that to date only a limited number of systematic and comprehensive studies has
been conducted on stakeholders’ reception of and attitudes towards sustainability
disclosure practice (Tilt 2007; Owen and O’Dwyer 2008).
• Sustainability reports have often been criticised for being non-specific, aiming at
a diffuse and excessively wide group of potential readers. This lack of target
group orientation creates a risk of information overload. The term ‘carpet bomb-
ing syndrome’ (SustainAbility and UNEP 2002) illustrates the fact that some
companies have ‘flooded’ their readers with increasingly extensive sustainability
reports – noted by some, but in practice mostly read by only a few.