Corporate sustainability reporting in Japanese multinational enterprises: a threat to local legitimacy or an opportunity lost for corporate sustainability practices?

Abstract

Purpose This paper aims to investigate whether Japanese manufacturing multinational enterprises (MNEs) maintain local legitimacy in their host countries through adequate informing of local stakeholders with targeted corporate sustainability (CS) reporting. Design/methodology/approach The paper first identified specific CS activities that were considered important in four Association of Southeast Asian Nations host countries, through semi-structured interviews with 58 participants of 16 Japanese manufacturing MNEs. The degree of establishment of local legitimacy was then measured through the number of references made to these CS activities and other activities specific to the respective host countries in the CS reports of the MNEs across a five-year period. Findings The majority of MNEs in the sample were under-reporting items of specific interest to localhost country stakeholders potentially undermining the MNEs’ image. There were found to be differences on the topics published in CS reports compared to those mentioned in the interviews indicating potential issues with regard to internal communication between the subsidiary and headquarters offices. Originality/value A novel approach is taken to investigate the degree of local legitimacy established by MNEs through comparing the contents of interviews held at subsidiaries with their respective CS reports. This paper highlights the importance of considering MNE subsidiaries when addressing Target 12.6 of the Sustainable Development Goal 12: responsible consumption and production.

Formal and informal sustainability reporting: an insight from a mining company’s subsidiary in Ghana

“…Hence, firm characteristics and strategic objectives, as well as external institutional elements that emphasise stakeholder pressure related to aspects of the changing business environment, may drive sustainability reporting of firms (Buhr et al, 2014;Deegan, 2002;Borkowski et al, 2010;Kend, 2015;Krasodomska and Cho, 2017). Secondly, even though sustainability reporting activities are context-relevant (Cho et al,2014;Gibassier and Schaltegger, 2015), most of the existing studies tend to focus on the reporting practices of the parent company (Ike et al, 2021;Ervits, 2021;Marfo et al, 2017). Thus, the literature overlooks the forms and Mining company's subsidiary channels for subsidiary companies' sustainability reporting especially, those in emerging countries (Yang and Rivers, 2009).…”

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“…Future research might examine ethics, philanthropy, corruption reduction, transparency in economic transactions, advancement of human rights, innovation and other favorable spillover effects of MNEs on the host nation (Baik and Park, 2019; Choi and Park, 2014; Ike et al , 2022). A more in-depth examination of how MNEs have benefited local businesses by promoting social entrepreneurship and enabling educational opportunities, gender equality and access to technology for the disadvantaged in developing host countries is needed.…”

“…Furthermore, research on stakeholders should shift from a secondary to a primary focus. MNE’s success in the future world will be contingent on the support of many key stakeholders in their host nations (Ike et al , 2022). Stakeholder-centric approaches may help MNEs establish their reputation and legitimacy, increase access to resources and preserve employee rights without jeopardizing shareholder interests, all of which contribute to the MNE's survival during times of crisis and lead to increased market value (Baik and Park, 2019; Kelley et al , 2019; Oh et al , 2020a, 2020b).…”

“…Another area of inquiry might be the degree to which MNEs' good governance practices (such as a code of good governance processes, quality reporting requirements, anticorruption measures and ethical business practices) permeate these host countries (Dunning and Fortanier, 2007) Furthermore, research on stakeholders should shift from a secondary to a primary focus. MNE's success in the future world will be contingent on the support of many key stakeholders in their host nations (Ike et al, 2022). Stakeholder-centric approaches may help MNEs establish their reputation and legitimacy, increase access to resources and preserve employee rights without jeopardizing shareholder interests, all of which contribute to the MNE's survival during times of crisis and lead to increased market value (Baik and Park, 2019;Kelley et al, 2019;Oh et al, 2020aOh et al, , 2020b.…”

Toward a Sustainable University: Babes-Bolyai University Goes Green

“…Weber (2017) criticized the SDGs, as the author considers the goals a result of a political project developed by entities that will most benefit from it, and given the indivisible character of the goals, the agenda may not be realized. Scholars have started to investigate how organizations are contributing to the achievement of the goals through several studies focused on different countries: Italy (Di Vaio and Varriale 2020;Izzo et al 2020), Spain (Ferro et al 2019;Peña-Sánchez et al 2020;Diaz-Sarachaga 2021), Greece (Tsalis et al 2020), Russia (Blagov and Petrova-Savchenko 2021), Japan (Ike et al 2021), Portugal (Santos and Silva Bastos 2020), India (Poddar et al 2019), and the Czech Republic and Poland (Šebestová and Sroka 2020). In the case of HEIs, scholars have been investigating different disclosure practices or have focused mainly on intellectual capital disclosure (Fazlagic 2005;Ndou et al 2018;Brusca et al 2020;Nicolò et al 2020;Aversano et al 2020;Nicolò et al 2021b).…”