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Corporate Social Responsibility: The Link Between Sustainability Disclosure and Sustainability Performance
Author(s) -
Herbohn Kathleen,
Walker Julie,
Loo Huay Yien Monica
Publication year - 2014
Publication title -
abacus
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.632
H-Index - 45
eISSN - 1467-6281
pISSN - 0001-3072
DOI - 10.1111/abac.12036
Subject(s) - sustainability , sustainability reporting , business , stakeholder , accounting , corporate social responsibility , environmental sustainability index , sustainability organizations , social sustainability , asset (computer security) , corporate sustainability , corporation , stakeholder theory , environmental economics , finance , economics , public relations , management , computer science , ecology , political science , biology , computer security
This paper explores the relation between sustainability performance and sustainability disclosure within the Australian extractive industries. The study utilizes Ullmann's (1985) stakeholder framework, which depicts sustainability disclosure and performance as two components of management strategy for dealing with stakeholder demands. Consistent with this framework, we predict a positive performance–disclosure relation. Extending prior research that has utilized problematic environmental performance indices such as CEP indices or toxic emissions levels, we develop a sustainability performance index based on the International Finance Corporation's Measuring Sustainability Framework (2001). Using data from 339 mining and energy firms listed on the Australian Securities Exchange in 2006, we find that corporate sustainability performance is strongly associated with disclosure as expected. Sustainability disclosure is also greater for firms with a proactive communication strategy as manifested through press release activity. Finally, asset age and firm size are both positively associated with sustainability, consistent with predictions from the stakeholder framework.