Put Your Money Where Your Mouth Is: Real Commitment to Sustainability and Mere Rhetoric
Financial Reporting, Vol. 2/2016
Posted: 7 Feb 2017
Date Written: December 1, 2016
Companies exhibit growing interest in sustainability. A debated issue concerns sustainability communication to stakeholders. In fact, it is difficult to understand whether companies’ commitment towards sustainability is “real”, or it only consists of “empty words” that hide opportunistic strategies.
Our paper contributes to this debate proposing a methodological approach which is based on a company’s business model (BM) representation. We argue that the inclusion of adequate sustainability information in a company’s BM representation can testify to a real company’s engagement, as it illustrates how sustainability affects its value creation process. Compared to extant methodological proposals, our approach acts as an “acid test”, which helps users to kill two birds with one stone. In fact, it allows zeroing in on the core of a company’s sustainability rhetoric through the analysis of the information about its BM disclosed in the management commentary.
Our approach is consistent with previous contributions that propose a company’s BM as a representation device able to illustrate strategic information that cannot be represented in the traditional corporate reporting. It also offers a possible answer to address the challenges faced by regulators and standard setters involved in the regulation of sustainability disclosure.
Keywords: sustainability reporting, business model, rhetoric, non-financial disclosure, mining industry
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