Sustainability Reporting Practices in FTSE100 companies

Purpose The purpose of this chapter is to establish the sustainability reporting practices of FTSE 100 companies using Integrated reporting (IR), Corporate Social Responsibility (CSR) and Corporate Governance (CG) as proxies. Our study has adopted a holistic approach by combining dimensions of each factor in one variable. Design/ Methodological Approach The study data covers all FTSE 100 companies over five years; thereby generating 505 company-year observations for each variable of the study. Authors have collected the data from Economic, Social and Governance (ESG) reports filed with Thomson Reuters and International Integrated Reporting Council (IIRC). Findings Results indicate the practice of sustainability reporting in FTSE 100 companies both per variables and dimensions levels. It shows, for example, 89% of the companies reported on their charitable donations. The study also found that 79% of the FTSE 100 companies reported on their sustainability committees whilst 86% and 85% reported on their emission reduction and waste reduction policies respectively. Results show that the CSR impact is higher than CG regarding IR adoption. The Logistic Model manages to explain a high percentage of IR adoption while controlling for other misspecification issues such as multicollinearity. Practical implication The study highlights practice of substantiality reporting for pubic shareholding companies listed on FTSE 100 index along with interaction among proxies. These will be of interest to companies not only in the FTSE 100 Index but those outside as well. Companies can rely on these factors to strengthen their governance, social responsibility and reporting policies in consideration of all stakeholders and not just a few. We believe that we shed a quantitative explanation on IR adoption by CSR and CG factors, we expect an impact on practices following results of our study. Social Implication Results have indicated that at least 60% of companies in the FTSE 100 Index have imbedded social responsibility activities; such as charitable giving, waste reduction initiatives, emissions reduction policy and sustainability committees. Keywords: Sustainability Reporting, Integrated Reporting Adoption, Corporate Social Responsibility, Corporate Governance.