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Sustainability Disclosure and Reputation: A Comparative Study

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Abstract

Drawing on legitimacy theory, we discuss that a company's reputation is a determinant of sustainability disclosure. Specifically, we consider the concept of reputation into three dimensions for analysis: commitment to stakeholders, financial performance and media exposure. This paper differs from previous social and environmental reporting studies in that it investigates both internal and external contextual factors that influence disclosure practice. We claim that companies with a good financial performance, which are adopting an active strategic position towards stakeholders and which are exposed to significant public pressure, are more likely to use sustainability disclosure in order to communicate their legitimacy to operate to stakeholders. Moreover, the paper analyses a wide range of corporate reports for their social and environmental content using an international sample that allows for a comparison of disclosure practices among Continental European, UK and US companies. Our results show that both commitment to stakeholders and media exposure are positively associated with sustainability disclosure. Moreover, we find evidence that the drivers of disclosure vary by information type.

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Notes

  1. Social items do not include any reference to commitment to stakeholders.

  2. As STAKE is an ordinal variable, we performed also other regression models, using four different dummies, one for each stakeholder engagement item. The regression results confirm that all the stakeholders engagement items are significant and positively correlated to the level of sustainability disclosure.

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Acknowledgements

The author would like to express her gratitude to Saverio Bozzolan, James Guthrie, Den Patten, Federica Ricceri, Giacomo Boesso and to the anonymous referees for their helpful comments.

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  1. Department of Economics and Management, University of Padova, Padova, PD, Italy

    Giovanna Michelon

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Michelon, G. Sustainability Disclosure and Reputation: A Comparative Study. Corp Reputation Rev 14, 79–96 (2011). https://doi.org/10.1057/crr.2011.10

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