Page 181 - Sustainability Communication Interdisciplinary Perspectives and Theoritical Foundations

164 C. Herzig and S. Schaltegger

documentation such as sustainability reports and company websites related to
sustainability issues.
Furthermore, sustainability reports have themselves increasingly become a
subject of rankings and reporting competitions reflecting the expectations of stake-
holders and possibly involving recommendations for future improvement. By this
means, rankings aim to advance the field of sustainability reporting and, to some
extent, also contribute to a certain degree of standardisation.
The first rankings of environmental reports were conducted in European
countries in the middle of the 1990s. Since 1996, the ‘European Sustainability
Reporting Awards’ (ESRA) has annually awarded the best external environmental
and sustainability reports of private as well as public organisations across Europe.
The participants in this European competition (formerly ‘European Environmental
Reporting Awards’, EERA) were accountancy bodies from 15 European countries,
each of which conduct separate national reporting schemes and submit the national
winning reports to the European Sustainability Reporting Awards. Separate awards
were given to large companies and to small and medium-sized enterprises respec-
tively. In 2006, the European Awards scheme was stopped and ESRA renamed into
‘European Sustainability Reporting Association’ whose purpose is to share
European reporting developments based on annual reports from each participating
country (see www.sustainabilityreporting.eu). Nevertheless, rankings of sustain-
ability reports represent a continuing element of research on sustainability reporting –
in Europe and internationally (for an overview see Morhardt 2010).

Outside-In and Inside-Out Perspective

Many of the guidelines and ratings introduced above provide criteria that are used by
corporate reporting providers to improve their sustainability reporting. In the extreme,
the orientation towards stakeholder requirements can be seen as an ‘outside-in’
approach towards designing the reporting, accounting and communication process
(see Schaltegger and Wagner 2006; Herzig and Schaltegger 2006). With this approach
the company analyses stakeholder dialogues and screens the information demand of
stakeholders to define its key indicators for reporting and the underlying accounting
and data collection processes. The aim is to fulfil external information requests and
to provide the information that stakeholders are interested in receiving (e.g. meeting
the demands of rating agencies and excelling in external benchmarking schemes and
reporting awards). This approach contrasts with the strategic ‘inside-out’ approach
of sustainability performance measurement, management and reporting in which
managers first analyse the company’s main sustainability weaknesses, then design
problem solutions, implement them, establish a measurement and indicator system,
and set up a sustainability accounting and data monitoring system in order finally to
report the actual situation, the achievements and the goals for future improvements.
The outside-in approach to sustainability reporting has its strengths and weak-
nesses. It is geared towards stakeholder perceptions, media attention and improving