University Accounting Research Proposal: Sustainability Reporting

This research proposal delves into the effectiveness of sustainability reporting by companies. It examines the practical and theoretical motivations behind sustainability reporting, emphasizing its importance for stakeholders and its role in enhancing market efficiency. The literature review explores sustainability reporting practices, the theoretical framework (legitimacy, stakeholder, and agency theories), and critical analyses of existing research. The proposal investigates whether companies' sustainability reports accurately reflect their practices. The research aims to determine the consistency of companies' sustainability reporting practices with their actual sustainability efforts. The hypothesis suggests that inconsistencies may exist between reported practices and actual implementations. The research paper uses existing research to evaluate the effectiveness of the disclosures made by the companies on sustainability. The goal is to establish the commitment of the organizations to sustainability reporting practices, and the impact of the reports on the decision-making of stakeholders. The appendix provides details of other research papers on the topic.

Running Head: CONTEMPORARY ISSUES IN ACCOUNTING
CONTEMPORARY ISSUES IN ACCOUNTING
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction................................................................................................................................2
Practical Motivation...................................................................................................................2
Theoretical Motivation...............................................................................................................2
Literature Review.......................................................................................................................3
Hypothesis..................................................................................................................................7
Reference....................................................................................................................................8
Appendix..................................................................................................................................10

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Introduction
During recent years, the most critical issues faced by the business organization are
sustainability, which is having greater potential for influencing the overall profitability as
well as performance of the company. Sustainability report is the report by the organization,
which provides the information about the social, economic, environmental as well as
governance performance. It enables the business organization for considering the impacts of
the wider ranges of issues of the sustainability that enables them for being more transparent
about the opportunities as well as risks faced by them (Sandberg and Holmlund 2015).
The concerns are increasing regarding negative impacts of the products as well as
activities on social and environmental well-being of the business organizations. Therefore, it
becomes necessary for checking the effectiveness of implementations of the sustainability.
Hence, under this research paper, discussion will be done on the effectiveness of the
implementations of sustainability reporting by the companies.
Practical Motivation
The practical motivation behind the effectiveness of the sustainability reporting is the
practice of sustainability reporting, which is of great help to the stakeholders. The widespread
practice of sustainability reporting creates transparency and can help the markets for
functioning in more efficient manner. The stakeholders such as investor, government and
customer base their decision after having knowledge of the level of effectiveness of the
sustainability reporting practices by the concerned company.
Theoretical Motivation
Despite of the increasing interests of the practitioners as well as academics in
studying about the topic of sustainability, there exists certain gap in the aspects of the
effectiveness in the implementations of the sustainability reporting practices by the

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companies. Therefore, in order to address the gap, this research paper aims for reviewing the
effectiveness of the practices of the sustainability reporting of the companies in relation to the
consistency of the current practices of sustainability disclosures.
Literature Review
Sustainability Reporting Practices
The changing environment of the global business has insisted the business
organizations for looking beyond the financial performances. The business organization has
realized the significance of the integrating the social as well as environmental issues with the
strategy of the business. Sustainability reporting is the method in the accounting of the
sustainability that deals with preparation of the sustainable report, which is consists of
mission, vision as well as goals of company. It helps in focusing on non-financial information
disclosures of the performance of the firm to the external parties. The sustainability deals
with the social, economic as well as environmental performances of the organization (Hoque
2017).
The effectiveness of the sustainability reporting practices by the company is
dependent upon the intention of the company in its implementation, as it should depict the
real picture of the organization to the stakeholders of the company. Here the independent
variable is sustainability reporting practices and the dependent variable is the intention or
consistency in the implementations of the sustainability practices.
Theoretical Framework
The legitimacy is refereed as the condition that exists when the value system of the
organization is in the harmony with the society’s value system. This theory explains that it is
important for meeting the norms as well as expectations of the society for ensuring the
survival of the firm in the long run. The arguments by the proponents of the theory states that

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the reporting of sustainability tends for reducing the risks of the boycotts as well as
regulatory actions and strengthens the license of the firm for operating (Maas, Schaltegger
and Crutzen 2016).
The theory of stakeholders upholds that the firms have the accountability towards the
broader ranges of the stakeholders rather than just shareholders, which are customers,
government, environment, community, creditors and others. The significance of the
sustainability reporting is towards strengthening of the relationships between the firm as well
as society, under which it operates. If the interest of the stakeholders were ignored then it
would have greater impact on the public image that would be unfavorably affecting their
financial performances (Herremans, Nazari and Mahmoudian 2016).
The theory of agency is based on the relationships between managers as well as
owners. In between the managers of the company and the other stakeholders, there exists
conflict of the interest as well as asymmetry of the information. The significance of this
theory has gained after the wake of the scandals of corporate governance. If there are no any
public disclosures by the company then there is rise in the perceived risks by the investors. In
this respect, sustainability reporting to reduce the asymmetry of information as well as risks
perceived by the investors, reduced cost of capital and increase the efficiencies of the market
(Ehnert et al. 2016).
Critical Analysis
Wan Nurul Karimah has stated that generally, the companies are having clear policy
of sustainability on their plans as well as their commitments towards the protection of the
environment as well as responsibility of the practices. In this concern, the most important
concern is translation of the policies as well as commitments into the measurable indicators,
which helps the firms for the assessing their position in relation to sustainability practices as

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well as identifying the priorities areas that helps in leading towards effective sustainability
strategy implementations (Wan Ahmad, de Brito and Tavasszy 2016).
Dinithi has stated that there exists relationship between extent of the reporting of the
sustainability and the characteristics of the company such as age, sizes as well as financial
performances of the company. He stated that sustainability reporting is considered more
significant for larger companies (Dissanayake, Tilt and Xydias-Lobo 2016).
Rodrigo has stated that the decision for publishing first sustainability report is driven
primarily by the internal motivations of the companies; however, for the subsequent reports,
there are combinations of the internal motivations as well as external stimuli (Lozano,
Nummert and Ceulemans 2016).
Colin Higgins has stated that there is the requirement for the new theoretical
explanations of the practices of the sustainability reporting. The companies that are having
lower-impact as well as less intensive will not be considered as the small minority of the
companies that is based on the fringe values (Higgins, Milne and Van Gramberg 2015).
Charl de Villiers has stated that the new conceptual model of the corporate
sustainability with the management control and reporting. This benefits of the integration is
consists of better internal communication as well as better operationalization of the ideals of
the sustainability with the help of balance scorecard as well as better BSC understanding by
the extensive engagement of stakeholders, which the sustainability calls for (De Villiers,
Rouse and Kerr 2016).
However, the study of this research paper add to the existing evidences a well as
ongoing evidences on whether the firms are implementing the sustainability practices on only
document for showing their stakeholders that they actually mean what they are publishing or
they are showing true picture of their sustainability practices. The intention is the behavioral

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aspect of the company that holds with the company’s board. Therefore, agency theory,
stakeholders theory as well as legitimacy theory best fits in this research paper (Stacchezzini,
Melloni and Lai 2016).
This research paper focuses on the intention of the company in relation to the
publishing effective sustainability reporting practices. There are various companies who
publishes the sustainability report for just showing that how much socio, economic, political,
community, environment and other aspects have value for them but in real they are not very
much concerned with the practices. It is because of they have to abide by the laws relating to
the sustainability such as GRI, the companies have to make the disclosures by showing their
concerns. However, whether or not they are committed towards the effective sustainability
reporting practices needs to be examined (George et al. 2016).
There are various previous studies done by the researchers on the sustainability
practices and has provided the evidences in relation to the various concerns of its practices
but none of the previous research has highlighted the concern regarding the effectiveness of
the disclosures made by the companies on the sustainability areas.
Therefore, the conclusion that can be derived from the analysis is that the
effectiveness of the sustainability reporting depends heavily upon the intentions of the
company on the various issues of the sustainability such as towards customers, environment,
community, government, environment and people. The sustainability reporting practices
adopted by the companies plays important role for the stakeholders. All the major and minor
decisions taken by the stakeholders are dependent upon the company’s disclosures of their
sustainable practices. Hence, there is need for the research on the commitment of the
organization in the disclosures of the sustainability reporting practices.

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Hypothesis
The hypotheses that can be developed after the deep understanding of the
sustainability practices in the business organization are as follows:
 H0- The companies’ implements sustainability reporting practices effectively and
their report depicts actual picture of their practices.
 H1- The companies does not implement sustainability reporting effectively as there
are differences in what they report and what is the actual situation.

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Reference
De Villiers, C., Rouse, P. and Kerr, J., 2016. A new conceptual model of influences driving
sustainability based on case evidence of the integration of corporate sustainability
management control and reporting. Journal of Cleaner Production, 136, pp.78-85.
Dissanayake, D., Tilt, C. and Xydias-Lobo, M., 2016. Sustainability reporting by publicly
listed companies in Sri Lanka. Journal of Cleaner Production, 129, pp.169-182.
Ehnert, I., Parsa, S., Roper, I., Wagner, M. and Muller-Camen, M., 2016. Reporting on
sustainability and HRM: A comparative study of sustainability reporting practices by the
world's largest companies. The International Journal of Human Resource
Management, 27(1), pp.88-108.
George, R.A., Siti-Nabiha, A.K., Jalaludin, D. and Abdalla, Y.A., 2016. Barriers to and
enablers of sustainability integration in the performance management systems of an oil and
gas company. Journal of Cleaner Production, 136, pp.197-212.
Herremans, I.M., Nazari, J.A. and Mahmoudian, F., 2016. Stakeholder relationships,
engagement, and sustainability reporting. Journal of Business Ethics, 138(3), pp.417-435.
Higgins, C., Milne, M.J. and Van Gramberg, B., 2015. The uptake of sustainability reporting
in Australia. Journal of Business Ethics, 129(2), pp.445-468.
Hoque, M.E., 2017. Why company should adopt integrated reporting?. International Journal
of Economics and Financial Issues, 7(1), pp.241-248.
Lozano, R., Nummert, B. and Ceulemans, K., 2016. Elucidating the relationship between
sustainability reporting and organisational change management for sustainability. Journal of
cleaner production, 125, pp.168-188.

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Maas, K., Schaltegger, S. and Crutzen, N., 2016. Advancing the integration of corporate
sustainability measurement, management and reporting. Journal of cleaner production, 133,
pp.859-862.
Sandberg, M. and Holmlund, M., 2015. Impression management tactics in sustainability
reporting. Social Responsibility Journal, 11(4), pp.677-689.
Stacchezzini, R., Melloni, G. and Lai, A., 2016. Sustainability management and reporting: the
role of integrated reporting for communicating corporate sustainability management. Journal
of Cleaner Production, 136, pp.102-110.
Wan Ahmad, W.N.K., de Brito, M.P. and Tavasszy, L.A., 2016. Sustainable supply chain
management in the oil and gas industry: a review of corporate sustainability reporting
practices. Benchmarking: An International Journal, 23(6), pp.1423-1444.
Appendix
Author/s Date Title Journal Type of If empirical, Summary of contribution to the

10CONTEMPORARY ISSUES IN ACCOUNTING
Paper
(Theoretical
or Empirical)
dependent &
independent
variables
research question (100 words)
Wan Ahmad,
W.N.K., de
Brito, M.P.
and
Tavasszy,
L.A
2016 Sustaina
ble
supply
chain
manage
ment in
the oil
and gas
industry:
a review
of
corporat
e
sustaina
bility
reporting
practices
An
Internati
onal
Journal
Theoretical The research by the author has
contributed towards the reviewing
the quality of the practices of the
sustainability of the companies in
the industry of oil and gas in the
dimensions of current
sustainability disclosures
practices consistency as well as
degree of integrations of the
sustainability into the practices of
the supply chain management.
This research shows disclosures
of the companies in the industry
in relation to environmental intent
as well as reporting of companies.

11CONTEMPORARY ISSUES IN ACCOUNTING
Dinithi
Dissanayake,
Carol Tilt and
Maria
Xydias-Lobo
2016 Sustaina
bility
reporting
by
publicly
listed
compani
es in Sri
Lanka
Journal
of
Cleaner
Producti
on
Empirical Dependent
variable is
sustainability
reporting and
independent
variable is
company
sizes,
industry
groups and
company
ages.
This research has contributed
towards the existing knowledge
on the reporting of sustainability
as well as sustainability KPIs in
the three different ways. The first
study helps in bridging the gap in
the studies of the sustainability
reporting in the developing
countries that is still neglected
area largely in literature. There is
the dearth of the empirical
research in sustainability
reporting area in Sri Lanka and
this particular research fills the
gap.