Legitimacy Strategies in Corporate Environmental Reporting: A Longitudinal Analysis of German DAX Companies’ Disclosed Objectives

Abstract

Ecological objectives in environmental reports usually promise a high degree of environme nta l awareness in a company's activities. Several studies have already highlighted that most companies do not keep their promises since stakeholders' expectations and a company's capabilities for internal adjustments do not match all the time. Thus, a company might use strategic reporting in order not to endanger its legitimacy. However, no study so far has demonstrated how companies use different legitimacy strategies in reporting their environmental objectives over time. To achieve this in our study, we focus primarily on findings from legitimacy theory in combination with the legitimacy strategies suggested by Lindblo m (2010). To test our theoretical framework empirically, we analyze 260 corporate environme nta l reports between the years 2000 to 2014 of German DAX companies by coding all disclosed objectives within these reports. Based on this longitudinal approach we are able to identify reporting patterns of the different companies that provide insights into those companies' environmental reporting legitimacy strategies. Overall, this study contributes to research on voluntary disclosure by showing that a comprehensive analysis of the reporting pattern of disclosed objectives allows the identification of certain legitimacy strategies.

Sustainability reporting assurance: Creating stakeholder accountability through hyperreality?

“…Borgstedt et al, 2017, Comyns and Figge, 2015, Gürtürk and Hahn, 2016, Rossi and Tarquinio, 2017 due, among other similar reasons, to its ability to analyze whether companies report consistently over several years or whether significant changes are introduced (Borgstedt et al, 2017). As underlined in a set of works in the field of sustainability reporting -see for example among these recent ones: Borgstedt et al, 2017, Comyns and Figge, 2015, Gürtürk and Hahn, 2016, Rossi and Tarquinio, 2017 -the longitudinal approach might add value to the fieldwork carried out for the mentioned and other similar reasons. Because of the time lag between the year covered by the sustainability report and its publication date, certain reports pertaining to a particular year were released a year later or even more, and some reports cover two consecutive years.…”

“…In the scholarly literature, this type of longitudinal study has been fostered (e.g. Borgstedt et al, 2017, Comyns and Figge, 2015, Gürtürk and Hahn, 2016, Rossi and Tarquinio, 2017 due, among other similar reasons, to its ability to analyze whether companies report consistently over several years or whether significant changes are introduced (Borgstedt et al, 2017). As underlined in a set of works in the field of sustainability reporting -see for example among these recent ones: Borgstedt et al, 2017, Comyns and Figge, 2015, Gürtürk and Hahn, 2016, Rossi and Tarquinio, 2017 -the longitudinal approach might add value to the fieldwork carried out for the mentioned and other similar reasons.…”

From Values to Value: The Commensuration of Sustainability Reporting and the Crowding Out of Morality

“…Prior work has looked extensively at determinants of sustainability reporting (Hahn & Kühnen, 2013; Kuzey & Uyar, 2017; Pucheta-Martínez & Gallego-Álvarez, 2020; Schreck & Raithel, 2018) and draws on institutional theory conceptualizing reporting as a purposive and strategic practice for legitimation and stakeholder management (Borgstedt et al, 2019; Comyns, 2018; Cooper & Owen, 2007; Haffar & Searcy, 2020; Higgins et al, 2018; Luo et al, 2017; van Halderen et al, 2016). Although several studies have theorized the development of sustainability reporting as a process of institutionalization (Contrafatto, 2014; de Villiers & Alexander, 2014; Etzion & Ferraro, 2010), the role of the increasing focus on measurement and financial valuation within such institutionalization processes has remained largely unexplored.…”

Just Look at the Numbers: A Case Study on Quantification in Corporate Environmental Disclosures

“…Quantified information has proven useful in directing and focusing the attention of actors while simultaneously appearing disinterested and neutral. This way, quantified objectives imply a direct link to decision-making (Borgstedt et al 2019). Especially the knowledge concerning accounting is useful in legitimising new subject matter as well as the behind-the-scenes controversies associated with the application of accounting knowledge (Kaspersen and Johansen 2016;Potter 2005).…”

“…Dhaliwal et al 2012), and others considering the reports as little more than rhetorical devices used for impression management and as such to serve the corporations' private interests (e.g. Boiral 2013;Beelitz and Merkl-Davies 2012;Borgstedt et al 2019). Obviously, such categorisations are by definition simplifications, and more diverse views can be found in the literature.…”