Research Essay

Abstract

Although sustainability reporting has only made major progress in its development in early 1990s, its history can be traced back as early as eighteenth century. Academic researches have shown numerous evidences of need for corporate disclosure on social and environmental issues aside from disclosure on financial performance of the company. Furthermore, the rapid growth of sustainability reporting is also well explained by positive accounting theories such as stakeholder theory and legitimacy theory.

Currently, the accepted voluntary framework for corporate sustainability worldwide is Global Reporting Initiative (GRI) 2002 Sustainability Reporting Guidelines.

Introduction

Sustainable development is defined as ‘development that meets the needs of the present world without compromising the ability of future generation to meet their own needs’ (World Commission on Environment and Development, 1987).

Corporate sustainability reporting, now commonly referred to by the name of a popular approach -   ‘triple bottom line reporting’, is defined as the voluntary public presentation of information about an organization’s non-financial performance - environmental social and economic. It goes beyond singe bottom line reporting which focus solely on the economic performance of the organization.

This essay is written following the trend that more and more companies are enlarging their annual report to include information related to social and environmental issues. First, the essay will provide some background information on sustainability reporting, then analyze the reason for its rapid development in relation to various accounting theories. The final section will include a brief introduction to GRI’s Sustainability Reporting Guidelines.

The Emergence of Sustainability Reporting

The evidence of early social disclosure can be traced back to 1885, in the report of an Australian company called Broken Hill Property, as discovered by Guthrie and Parker...