Sustainability reporting as a matter of social contract: management and geographical perspective

Abstract

Sustainability reports provide a demonstration of a company’s performance and impacts on environmental and social issues. In the past decade, sustainability reports have become a requirement for a company to maintain its social contract with society and gain legitimacy for its economic interests. This requirement has stemmed from an increased demand for environmental and social responsibility in company activities. While companies are required to disclose social and environmental impact information according to national laws, company performance is frequently evaluated based on the subjective boarder concepts of sustainability. Thus, there exists a requirement to standardize company performance evaluation in order to enhance green transition in industries. This thesis aims to gain understanding into company practices, internal interpretations surrounding sustainability reporting, and the dynamic between socially constructed legitimacy and business interests. Four large companies from Norway and Finland are investigated and their motivation for sustainability reporting is explored based on document studies and interviews. This study finds that sustainability reporting is a practice that aims to meet the expectations that companies consider their activities in the light of sustainability. Moreover, this study addresses that while sustainability information is disclosed based on the environmental and social regulations of company’s location, the concept of sustainability is covered based on cultural understanding of it.