SUSTAINABILITY REPORTING FROM INSTITUTIONAL, FINANCIAL AND POLITICAL ASPECT

ABSTRACT Every organization and stakeholder must take sustainable actions to protect the environment, as climate change poses a serious threat to life on Earth. Companies play a major role in emissions that harm the planet. Sustainability reporting is essential for companies to share their efforts toward sustainability with stakeholders. Research is vital to understand sustainability reporting from different perspectives and uncover its complex nature. In our thesis, we analyzed sustainability reporting from institutional, financial, and political perspectives to examine how it operates and evolves within these contexts. The research on the institutional perspective analyzed 57 studies using a meta regression technique. It found that countries with high scores on voice and accountability, political stability, government effectiveness, rule of law, and control of corruption strengthen the negative link between environmental performance and environmental disclosure. This suggests that stronger institutional characteristics increase the likelihood of poor environmental performers creating misleadingly positive disclosures. From a financial perspective, we studied the quantity and quality of climate change disclosures of Eurostoxx 600 companies from 2014 to 2021. Using regression analysis, we found that investors react negatively to disclosures that are hard to read and those with excessive climate-related information. From a political perspective, we used deductive content analysis to examine arguments in comment letters submitted during the IFRS S2 climate-related disclosure standard-setting process. Based on the five public interest concepts from Bitonti (2020), we analyzed arguments related to seven key topics: audit, climate-related risks, GHG protocol, global baseline, jurisdiction, draft objectives, and transition plans. The findings show that realist arguments are most common across all themes, especially in audit and climate-related risks. Aggregative arguments are prominent in global baseline and jurisdiction topics, while formal arguments are more common in GHG protocol and draft objectives. Substantive arguments are most frequent in transition plans.