Valuing Stakeholder Engagement and Sustainability Reporting

Abstract

This conceptual paper sheds light on some of the major intergovernmental benchmarks, guidelines and principles for corporate social responsibility (CSR), corporate governance and sustainability reporting. It reports on several governments' regulatory roles as their societal governance is intrinsically based on interdependent relationships. There are different actors and drivers who are shaping CSR communications and policies in relational frameworks. This paper mentions some of the countries that have already introduced intelligent substantive and reflexive regulations. It also shows how certain businesses are stepping in with their commitment for sustainability issues as they set their own policies and practices for laudable organisational behaviours. Very often, corporate businesses use non-governmental organisations' regulatory tools such as process and performanceoriented standards. These regulatory instruments focus on issues such as labour standards, human rights, health and safety, environmental protection, corporate governance and the like. Afterwards, this paper discusses about the relationship between governance and sustainability. It makes reference to some of the relevant European Union Expert Group recommendations for non-financial reporting and CSR audits. Relevant academic contributions are indicating that customers are expecting greater disclosures, accountability and transparency in sustainability reports. This contribution contends that the way forward is to have more proactive governments that raise the profile of CSR. It maintains that CSR communications and stakeholder engagement may bring shared value to business and society. Ultimately, it is in the businesses' interest to implement corporate sustainability and responsibility and to forge fruitful relationships with key stakeholders, including the regulatory ones, in order to address societal, environmental, governance and economic deficits.

Environmental, social and governance disclosures in Europe

“…These frameworks require the engagement of relevant stakeholders to foster a constructive environment that brings continuous improvements in ESG disclosures. Regular stakeholder engagement as well as strategic communications can bring more responsible organisational behaviours (Camilleri, 2015). Many corporate businesses use non-governmental organisations' regulatory tools, processes and performance-oriented standards with a focus on issues such as labour standards, human rights, environmental protection, corporate governance, and the like.…”

The integrated reporting of financial, social and sustainability capitals: a critical review and appraisal

“…On the other hand, there are other organisations who may be reluctant to promote their responsible and sustainable behaviours. This may be due to a lack of awareness on the business case for such activities (Camilleri, 2015a). The motivations for undertaking stewardship behaviours, including; material ESG initiatives (that may be reported within integrated reports) seem to fall into two increasingly converging camps: doing good practices (this is consistent with the predictions of the stewardship theory) or doing well (this is consistent with both institutional and legitimacy theories).…”

“…The institutional theory offers promising ways of investigating what lies at the heart of the publics' concern. Therefore, corporations are influenced by the institutions' ethos, voluntary principles, policies and programmes (Camilleri, 2015a). Their responsible behaviours have often been triggered by socio-political forces and pressure groups.…”

“…The fact that CSR is 'voluntary' is a clear reflection of the practicing organisations' institutional context. Alternatively, CSR may be driven by legal, customary, religious or other defined institutions (Camilleri, 2015a).…”

“…While governments have been the primary force for the promotion of financial reporting standards through security exchange commissions; other institutions like IIRC or GRI have facilitated the growth and diffusion of non-financial reporting mechanisms. For the time being, it may appear that there is a growing demand for the integration of financial and ESG disclosures by marketplace stakeholders (Camilleri, 2015a,b (Camilleri, 2015a).…”