Approaching sustainability reporting: A pragmatic constructivist case study in a Swedish energy company

Abstract

Background and problem discussion: The EU-directive was adopted into Swedish Annual Act in 2016. The new legislation requires medium and large companies to disclose non-financial information and diversity by the financial year of 2017. The legislation has caused a fierce debate since companies have to start the reporting from scratch and may also have a lack of knowledge about sustainability. Sustainability reporting has for a long time been thriving, but previous research has mainly been focusing on external drivers of sustainability reporting. As sustainability reporting is spreading due to legislation it may become more important to know how it is managed within a company and how to create it from scratch, as in contrast to understand why a company chooses to create a sustainability report. Purpose and research question: The purpose of this study is to explore how a Swedish company approaches sustainability reporting from scratch given the EU-directive 2014/95/eu. Furthermore, the purpose is to explore how a company’s reality shapes through the reality constructions from important actors. How is sustainability reporting approached in the initial phase within a Swedish company? How do actors’ reality constructions shape the company’s sustainability reality? Methodology: This study explores how a Swedish company approaches sustainability reporting in the initial phase through a case study. The empirical data are collected through observations and semi-structured interviews and are thereafter discussed through pragmatic constructivism and previous research. Discussion and conclusion: Approaching sustainability reporting was found within a Swedish energy company where different activities were taken. Firstly, managers sought external advice from an auditing company. Secondly, the managers searched for information and inspiration through e.g. competitors’ sustainability reports and the different sustainability report frameworks. Thirdly a project group were formed and decisions made on which framework to use, and lastly KPIs were discussed and evaluated. It was found that actors had different sustainability realities. Even though that the actors had different realities, it was found that some of the realities complement each other, meanwhile other realities were in conflict. Since the company’s sustainability reality consists of different actors’ realities it appears that the company’s sustainability reality is a reflection of the given situation, and it is changing as the surroundings are changing. Contributions: This study has contributed to illuminate an organisation’s approach toward sustainability reporting and its actors’ realities connected to this. Thus, this study complement existing literature in understanding actors and their commitments which are shaped through their reality constructions. Furthermore, this study contributes and complements to the scarce literature on approaching sustainability reporting seen through pragmatic constructivism. This study has furthermore contributed to illuminate the process of approaching sustainability reporting and found different potential conflicts that managers may experience, such as defining the sustainability strategy and the transparency level.