The financial reports of the automotive companies' are measured in a standardized manner; therefore, they are transparent and comparable to each other, but this is not valid for the sustainability reports and it is not possible to compare their sustainability performances. Standard-setting organizations are currently searching for better reporting procedures. This study aims to investigate the connection between sustainability and financial reports for the most dominant European car manufacturers. It reviews the traceability of the sustainability elements back to the financial statements, which helps transparency, comparability, and impact measurement of the disclosed items and issues. This investigation allowed us to additionally review whether these companies are targeting to disclose the most harmful pollution impacts, or only focus to disclose the required obligatory items. Given the financial and sustainability reports magnitude manual testing would not provide complete and proper coverage, therefore we utilized an automated and AI-assisted content analysis with natural language processing. In this new review method, the sustainable elements of the textual reports were automatically retrieved following the 5-stage model of Landrum & Ohsowski (2018). The study highlights the lack of true sustainability information content of reports and the potential discrepancies and connections between the financial and the sustainability reports. Findings concluded that sustainability disclosures at the reviewed companies from several aspects could be improved and quantified, traced back to the financial disclosures, and to be comparable to each other if they apply a similar review method. Graphic abstract

No abstract

The regulatory environment for both sustainability and financial reporting is changing as standardisation and digital reporting (e.g., XBRL) are gaining traction within regulators. The measurement methodology and mandatory information content of disclosures are yet to be decided for corporate CO2 reporting by EU regulators and standard-setting organisations. In our study, we reviewed the sustainability reports of three leading German automotive groups by revenue for the period 2016–2020 as a case study. The research methodology was carried out with text-mining-aided content analysis to provide a collection of sustainability standards (GRI and SASB) in the evaluation of emissions reporting. As an addition to prior literature, conditions of relevance and clarity regarding published information were introduced in the evaluation process of compliance to CO2 disclosures. Companies by reporting practice were assigned to different stages of carbon management and actual emissions were evaluated. In the conclusions, discussion of the reliability of reported sustainability information, the applicability of digital reporting is provided through regional perspectives. We found that although analytical methods are available to assess the level of corporate carbon management, their usefulness is limited if the data are not reliable. Significant progress can be expected from analyses using standardised, comparable corporate carbon data.

No abstract