The Relationship Among Firm Characteristics & Guidelines in Corporate Social Responsibility Reports

The Relationship Between Firm Characteristics and the Use of Various Guidelines in Corporate Social Responsibility Reports

Sara Kruempelstaedter

Kruempelstaedter ReportsSource:

With the growing investor interest in the environmental performance of firms, there has been a push to create a standardized framework for firms to utilize while preparing sustainability reports.  This framework would make sustainability reports more uniform, helping to facilitate comparison between companies. 

My research used the Global Reporting Initiative (GRI) database of sustainability reports to understand the relationship between firm characteristics and the guidelines and frameworks they chose to reference.  I asked: What firm characteristics lead a firm to choose to use a certain guideline framework when preparing a corporate sustainability report?  

From my analysis, some patterns arose. The number of firms using guidelines had remained the same from 2015-2018, but the number of guidelines used per firm had increased.  The Sustainable Development Goals (SDGs) had growing popularity. Most sectors and regions preferred to use the UN Global Compact (UNGC), except for Northern America and Oceania which both referenced the Climate Disclosure Project (CDP) the most.  Larger firms cited guidelines more often than smaller firms. Most reports did not obtain assurance, but those that did, referenced each guideline much more frequently.  The data showed that there is not one common guideline that every firm, of every size, region, and sector prefers.  Overall, there was not a consistent pattern which indicated that the field of sustainability report frameworks are still in developing stages.