Focus and Standardization of Sustainability Reporting - A Comparative Study of the United Kingdom and Finland

Sustainability reporting has attracted significant attention from the business as well as the academic community in recent years. Not only has the latter frequently made recommendations on reporting, it has also extensively examined factors that have an influence on reporting. Several studies have noted differences in the extent and style of reporting across countries, but the influence of specific cultural and socio-economic environments on reporting has only been given limited consideration so far. It is the goal of this paper to help fill this gap. For this purpose, we examine the sustainability reporting of the 100 largest companies in the United Kingdom and Finland, as both are highly developed countries in North-Western Europe, but with significantly different cultural and socio-economic systems. Aside from the extent of reporting and media used, we examine the reporting standards and guidelines applied. Moreover, the focus of disclosure (economic, social or environmental) was investigated, which also brings a new perspective to the academic literature. Our results suggest that the cultural and socio-economic environment has an impact on the extent of reporting, but with regard to the focus of reporting and the application of standards the results are mixed. A stronger shareholder oriented culture does not lead to a more extensive inclusion of economic issues in sustainability reporting, while the extent of environmental reporting depends on the strength of environmentalism. The impact of cultural and socio-economic factors on the application of standards, such as the Global Reporting Initiative, appears to be limited. Copyright (c) 2012 John Wiley & Sons, Ltd and ERP Environment.