An examination of the quality of sustainability reports in the GCC : A thesis submitted in partial fulfilment of the requirements for the Degree of Doctor of Philosophy at Lincoln University

Abstract

The growing global sustainability challenges and rising stakeholder demand for companies to be accountable for their actions have led to an increase in sustainability reporting. Given this increase, it is important to examine the quality of sustainability reports to determine whether they provide incremental information which facilitates informed decision making by stakeholders. However, studies examining the quality of sustainability reports have typically focused on content quality, with few studies investigating textual quality, visual quality and/or balanced reporting. The quality of sustainability reports published by the Gulf Cooperation Council (GCC) listed companies is examined in this research. This research focuses on readability, graphs, and negative information to examine textual quality, visual quality and balanced reporting, respectively. In Phase 1, a quantitative analysis is conducted to investigate textual quality by measuring the level of language difficulty (readability) of sustainability reports. In Phase 2, visual quality is examined by conducting a quantitative analysis of graphs used in sustainability reports. In Phase 3, quantitative and qualitative analyses are used to investigate balanced reporting in sustainability reports. The research findings are examined and interpreted through the lens of impression management and legitimacy theory. This research finds that overall, sustainability reports published by the GCC listed companies include complex language that makes the reports difficult to read. Report readers would require at least a post-graduate level of education to efficiently read and understand the sustainability reports. Considerable evidence of impression management elements is found in the graphs included in the sustainability reports. The findings of the balanced reporting analysis reveal that generally companies are reluctant to report on the challenges and setbacks faced during business operations. When companies report negative information, they mostly adopt legitimation strategies that reinforce corporate commitment towards sustainable business practices. Companies are also found to symbolically portray commitment towards sustainability when reporting negative information. The findings indicate various impression management elements that lower the textual quality, visual quality and impede balanced reporting in sustainability reports. By being the first research that examines textual quality, visual quality and balanced reporting in a single study, this research provides insights into the role of impression management and its potential to affect the quality of sustainability reports and corporate legitimacy. In doing so, this research adds to the limited literature on impression management in sustainability reports and contributes to the debate in academic literature of whether sustainability reports are used to communicate incremental information or as tools for impression management. This research provides guidance to companies on the use of language, graphs and negative information to enable them to communicate information in an accurate, balanced, and clear manner. This research will benefit companies, standard-setters and legislators by highlighting the textual and visual features of best practice and the significance of balanced reporting for publishing good quality sustainability reports.