Corporate Sustainability Reporting and Analysis of Sustainability Reports in Turkey

Abstract

Financial reports are the most important sources of information for financial information users. Investors, lenders, and other creditors use financial information in their decision making process. Therefore, governmental bodies of financial reporting have mandated disclosing of some financial reports (statement of financial position, statement of comprehensive income, and statement of changes in equity) for public interest. It has been stated that besides financial information, non-financial information is also important for the users. It is clear that financial information contributes better decisions making when it is supported by non-financial information. Non-financial reports inform stakeholders (e.g., investors, employees, customers, and non-governmental organizations) and the general public about the firm's activities involving environmental, social, and governance (ESG) issues. In this study we have discussed elements of corporate sustainability reporting and detected sustainability reports of selected public firms in Turkey. Sustainability reports of nine firms have been analyzed based on the Global Reporting Initiative (GRI) indicators. The results show that selected firms' sustainability reports fulfill requirements related to Part I and Part II, "Profile Disclosures" and "Disclosures on Management Approach", which is mostly consistent with their reports' application level. However, it is hard to say the same thing for Part III. In fact, firms' sustainability reports fail to consistently disclose "Performance Indicators".

Corporate sustainability reporting: Scrutinising the requirements of comparability, transparency and reflection of sustainability performance

“…Later, some started to document economic, environmental and social aspects and their impacts on them, based on the triple bottom line approach (Maharaj and Herremans 2008: 36, Following the critical evaluation of G3 and G4, a short explanation is provided about the upcoming changes at the end of this section. Knebel and Seele (2015), Issakson and Steimle (2009) and Aktaş et al (2013) all based their research on reports using the GRI G3. The biggest advantage of GRI G3 was its completeness, while its biggest disadvantage lay in the use of an excessive amount of indicators, which made longitudinal comparison and benchmarking within the industry rather difficult.…”

Scoring Sustainability Reports using GRI indicators: A Study based on ISE and FTSE4Good Price Indexes

“…Analyzing quantity and quality levels of the reports from six Brazilian companies classified as Application Level A+, Leite Filho et al (2009) identified no traces of a good level of disclosure to justify such Application Level whatsoever. Adding to that, Aktas et al (2013) concluded that GRI's indicators are inconsistent within companies stating the same Application Level.…”

“…Companies that wish to build a sustainable image are keener on adopting the common practice of elaborating sustainability reports. According to Aktas, Kayalidere and Kargin (2013), reporting sustainability is a key process to inform stakeholders whether the firm is achieving sustainable growth and value for their interest. Stubbs, Higgins and Milne findings (2012) suggest that the route to encouraging greater and better quality uptake of sustainability reporting rests on stakeholders exerting pressure for better and more detailed disclosure from business firms.…”

Analysis of Sustainability Reports and Quality of Information Disclosed of Top Brazilian Companies

“…Konar and Cohen (2001) state that major companies tend to voluntarily comply with environmental regulations and externally portray an image of being environmentally concerned, being rewarded in the marketplace for taking these actions. According to Aktas, Kayalidere and Kargin (2013), reporting sustainability is a key process to inform stakeholders whether the firm is achieving sustainable growth and value for their interest. Ross (1973) advocates that the agency theory resides on the situation where there are two forces and one of them (agent) acts in behalf of the other (principal), which may result in interest conflicts.…”