1. Sustainability reporting:
Trends and trajectories
Prof.dr. Ans Kolk
16 June 2010 1

2. Sustainability reporting trends
Development over time
1970s: social reporting
1980s: decline
1990s: environmental reporting
2000 onwards: broadening towards reporting on sustainability and
corporate social responsibility/citizenship/sustainable development
Formats have become more diverse (also in annual reports, web-
based)
Topics have evolved, e.g. increasing attention to corporate
governance, climate change (also separate carbon disclosure)
More standardisation though still variety
Verification has taken off
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3. What we know – and what not…
We know things about trends, but usually based on lists of largest
companies (nationally or globally) composition changes over time,
different sets
We know things about drivers but based on cross-sectional research
no insight in dynamics (‘deterministic responses to pressures’)
Hence, no insight into
patterns at the level of the firm, and its strategies over time
How companies respond to others, for example those that are
perceived to be leaders (‘simply imitating others’)
Therefore, this research examined reporting by a panel of Global 250
firms (n=213), over a period of a decade considered in their sector-
specific settings to explore dynamics
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4. Reasons for reporting
Enhanced ability to track progress against specific targets
Facilitates implementation of sustainability strategy
Greater awareness of sustainability issues throughout the organization
Better conveyance of corporate message internally and externally
Improved all-round credibility from great transparency
Ability to communicate efforts and standards
Licence to operate and campaign
Reputational benefits, cost savings identification, increased efficiency,
enhanced business opportunities & staff morale
Hence, consideration of stakeholder pressure (legitimacy/impression
management), weighing costs and benefits, larger firms more likely to
report, as do those from ‘sensitive’ sectors (pollution, peer pressure)
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5. Reasons for not reporting
Doubt about the advantages to the organisation
Competitors are not publishing reports
Customers (and public) not interested; will not increase sales
Firm already has a good reputation on sustainability
Many other ways of communicating about sustainability
Too expensive
Difficult to gather consistent data from all operations and select correct
indicators
Could damage reputation of the firm, have legal implications or wake up
‘sleeping dogs’
Recent study showed that ‘competition’ and ‘implementation’ scored
highest (reputational aspects were considered least important)
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6. Panel of 213 large firms: trends in a decade
Significant increase in reporting: from 39% in 1999 to 69%
Clear growth of verification: from 9% in 1999 to 38%
No sustainability reports in 1999, mostly environmental (and health and
safety), this has completely changed
Most polluting traditionally most active; European and Japanese firms
report more than average, US and South Korean firms less
Reporting trajectories at the firm-level:
Consistent reporters (32%): leaders, early in having reports verified
Late adopters (16%): Japanese firms overrepresented
Laggards (19%): banks/insurance overrepresented, and French
Consistent non-reporters (24%): hardly European firms, more US
Inconsistent reporters (8%): never had reports verified, many US
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7. Sector dynamics, considering firm patterns
In global industries with relatively small number of large firms,
competitors closely watch one another, and ‘follow the leader’
Reporting common in automotive, but verification not until recently
In oil & gas, reporting and verification is rather common; the latter
particularly for European firms in the beginning
Utilities are less internationalised, but reporting common by 2002,
verification not (again except for Europan firms)
Chemicals and pharmaceuticals very early, already before 1998;
verification by European firms, not by US firms
In electronics/computers, reporting is prevalent, late adopters from Asia
In banking, reporting took off relatively late (large number of late
adopters), some NL/UK banks adopted verification later than reporting
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8. Some conclusions
Different dynamics in the various sectors, in some reporting more or
less established, incidentally before 1998, in other more emergent still
Influence of country of origin:
many sectors show one or more European frontrunners, particularly
when it comes to adopting verification at relatively early stage
In some sectors US firms follow later, but almost never verify reports
Noteworthy is that one quarter consistently did not report, so
disadvantages even for those highly visible firms, with peers already
being active in reporting
Implementation and complexity may play a role
Fear of litigation, competitive sensitivity
‘Cycle’ of rising expectations
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9. Some recent publications
Kolk, A. (2008). Sustainability, accountability and corporate
governance: Exploring multinationals reporting practices. Business
Strategy and the Environment, 17(1), 1-15.
Kolk, A. (2010). Trajectories of sustainability reporting by MNCs.
Journal of World Business, 45(4), forthcoming.
Kolk, A., Levy, D. & Pinkse, J. (2008). Corporate responses in an
emerging climate regime: The institutionalization and commensuration
of carbon disclosure. European Accounting Review, 17(4), 719-745.
Kolk, A. & Perego, P. (2010). Determinants of the adoption of
sustainability assurance statements: An international investigation.
Business Strategy and the Environment, 19(3), 182-198.
Kolk, A. & Pinkse, J. (2010). The integration of corporate governance in
corporate social responsibility disclosures. Corporate Social
Responsibility and Environmental Management, 17(1), 15-26.
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