The interplay of sustainability reporting and management control – an exploration of ways for dovetailing to develop reporting beyond accountability

Abstract

Purpose: Companies must no longer just report on corporate sustainability (CS) performance but also demonstrate that they are aligning their strategies with sustainability. However, suitable management control systems (MCS) are required to implement a sustainability strategy. Thereby, sustainability reporting (SR) can also be employed for control purposes. On the other hand, existing MCS can be used to develop SR that goes beyond accountability. Accordingly, this paper explores how this interplay can be designed. Design/methodology/approach: For the study, 20 semi-structured interviews were conducted with persons from ATX and DAX companies. Since the interplay should be examined from a holistic control perspective, the authors used the MCS package of Malmi and Brown as an analysis framework. Findings: Nowadays, merely focusing on reporting is too narrow a view. It is therefore not surprising that the investigation was able to reveal various possible linkages between MCS and SR that span the full range of the MCS package of Malmi and Brown. Research limitations/implications: Future research should also consider non-listed companies to investigate potential differences and take a closer look at the proposed reciprocal nature of the interplay. Practical implications: The findings expand the knowledge of how companies can use SR for control purposes and how existing MCS can help develop a reporting that goes beyond accountability. Originality/value: The study contributes by highlighting the potential of SR to control CS performance from a holistic MCS perspective and likewise the impact of existing MCS on reporting. In addition, different theoretical perspectives are used to explain why the interplay can be designed differently in practice.