Development of Sustainability Reporting Frameworks: The Case of Australia

Abstract

The aim of this chapter is to explore the literature regarding sustainability and extended reporting frameworks, to catalogue various typologies of reporting frameworks, to investigate the motivation by organisations to adopt such frameworks, and to identify the extent of their use in Australia. We start by defining corporate social responsibility (CSR) and sustainability and provide a brief overview of the historical development of the concepts of sustainability. Central to this is understanding stakeholders and their importance as a motivator for organisations to adopt sustainability reporting frameworks. We find that traditional accounting frameworks are an inadequate reflection of a business as they focus solely on economic performance. We outline the background to the development of alternative reporting frameworks proposed in sustainability academic literature that encompass both economic and social performance. We identify and catalogue 11 reporting and social accounting guidelines, and focus on the development of one particular framework, the Global Reporting Initiative (GRI). We conclude that such guidelines provide for a more complete picture of total business welfare. We find the main motivating factor for adopting sustainability disclosure frameworks is to communicate with company stakeholders the performance of management in achieving long-run corporate benefits, such as improved financial performance, increased competitive advantage, profit maximisation, and the long-term success of the firm.