Sustainability Reporting in Ireland: An Assessment of the Non-Financial Disclosures of the Top 100 Firms

1. Sustainability Reporting in Ireland: An Assessment of the Non-Financial Disclosures of the Top 100 Firms Gerard Mullally and Tara Mullally, University College Cork Paper to be Presented at the GIN Conference, July 2-5, Cardiff

2. Background to the Irish Case • Sustainability reporting in its infancy in Ireland  ‘ponderous evolution’ (O’ Dwyer, 2003). • Brennan and Pierce (1996) little social disclosure beyond mandatory statutory requirements in the annual reports of Irish companies. • Most private companies still limit their disclosures to those required by the Companies Acts (O’ Shea, 2005) • The inadequacy of Irish corporate social disclosure may be attributed to its voluntary status (Douglas, Doris and Johnston 2004).

3. Focus on Corporate Environmental Reporting and Corporate Social Reporting (O’ Dwyer and Gray, 1998; O’ Dwyer 2000; O’ Dwyer 2001a; O’ Dwyer 2001b; O Dwyer 2001c, O Dwyer 2002, O’ Dwyer 2003a, O’ Dwyer 2003b, O’ Dwyer, Unerman and Bradley, 2005). Some recent attention to social and ethical reporting (O’ Dwyer, 2000) (Douglas, Doris and Johnston, 2004) Latterly to awareness raising on sustainability reporting (Linehan, 2002; Kennelly and Bradley 2005; O’ Dwyer, 2001c.). Research on Sustainability Reporting in Ireland

4. CSR, Sustainable Development and Ireland • Growing body of academic and professional advocacy linking triple bottom line reporting with a ‘business case’ for Corporate Social Responsibility and sustainable development (O’ Dwyer 2001; Canniffe 2005, Taylor 2005). • ‘CSR is about much more than compliance with current regulation. It is seen as the private sector’s means of integrating the economic, social and environmental imperatives of their activities in such a way that it promotes sustainable development’ (Taylor 2005: 56).

5. A CSR Regime? • A CSR regime, according to Van Tulder and Van der Zwart, consists of ‘all of the actions, interactions and rules that influence the role of social interfaces’ (2006: 221) between business and society… • It determines the degree to which: • ‘CSR strategies are voluntary or mandatory, and whether they can be considered successful or not. A CSR regime is the result of past bargaining processes and sets the framework for future bargaining processes’ • This includes: legal requirements, government policy and practices and the nature of interactions between business and civil society.

6. Legal requirements and cultural differences • Private companies - not obliged to disclose as much information as public companies • obliged to return audited Accounts and an Annual Return listing directors, the company secretary, the registered office and shareholders • Environmental Reporting is mandatory in the IPC/IPPC regimes – but tends not to be communicated in annual reports • The Irish EMS regime as it had been evolving up to 1996 was adequate and brought firms to the point of publishing their results (Flynn 2003: 149). • The acceptance of ISO14001 as a means of meeting the terms of the EMAS Regulation meant a subsequent emphasis on voluntary rather than mandatory reporting

7. Government Policies and Practices • In 2002, the Department of Community, Rural and Gaeltacht Affairs took on responsibility, from a community affairs point of view, for the national coordination of Corporate Social Responsibility matters. • Its role is to ensure: • ‘that there is an appropriate administrative framework to encourage Corporate Social Responsibility’ • The Department was responsible for coordinating the Irish input into the EU Green Paper on Corporate Social Responsibility and provides input into the informal government network on CSR

8. The Department of Enterprise Trade and Employment lists the promotion of CSR as one of the key elements of its Strategy for Sustainable Development (2003-2005). • encouraging knowledge and observance of the OECD Guidelines for Multinational Enterprises in Ireland; working with enterprises and the Department of the Environment, Heritage and Local Government to actively encourage more widespread voluntary social and environmental reporting by Irish companies (DETE, 2002: 28).

9. Interactions between business and Civil Society • Several studies on CSR (O’ Dwyer 2003, O’ Dwyer 2004, O’ Dwyer, Unerman and Bradley 2005) indicate a strong preference among Irish NGOs for mandatory rather than voluntary corporate reporting. (O Dwyer, 2004). • Despite the centrality of social partnership to Irish governance it is marginal to Corporate Governance • Business in the Community Ireland (BITC Ireland) published ‘the First Ever Survey on Consumer Attitudes in Ireland Towards Corporate Responsibility’ in 2003. • 60% of Irish adults believe that industry and commerce do not pay enough attention to their social responsibilities (BITC, 2003).

10. The Irish Sample • Sample • Top 100 firms taken from Irish Times newspaper’s top 1000 Irish Companies Report edition published in May 2005. • listings based on documents filed at the Companies Registration Office, some foreign owned companies also file Irish accounts. • Irish sample is a mixture of Irish owned companies, state owned companies and foreign owned companies • Data gathering • 3 stage process • E mail request for Annual Reports and written separate non financial reports • Follow up telephone calls to non respondents • Follow up letters to non respondents

11. Irish Data Set

12. Understanding the Response Rate • 28 Annual Reports and 16 separate reports were received • 64 did not return annual reports • 11 private/ family owned companies (only obliged to file Annual Returns) • 23 produced non indigenous global reports • 28 non responses • 2 refusals • An additional 8 firms returned global reports that could not be included

13. Annual Reports

14. Separate CSR Reports

15. An Emergent CSR Regime? • Angels • companies that are regarded as the examples of good practice, the paragons of reporting in the Irish context. • Endorsed by recognition schemes and used as case studies • Apostles • ardent supporters of the movement for CSR and are advocates of voluntary actions that go beyond those mandated by legislation. • organisations and associations promoting company led movements BITC Ireland; the ACCA, CCI and GoodCorporation recognition schemes; and also, government departments, the European Commission and the United Nations • Acolytes • the followers, helpers or attendants who assist with both the symbolic and practical dimensions of Corporate Reporting. • public relations firms and business journalists who provide specific information and advice • academic social accountants, dedicated units within accountancy firms and legal specialists who provide ‘know how’ and services to companies

16. The Future for Sustainability Reporting • Clear tendency towards separate reporting • Better quality reporting in the separate reports • Clear coalition for voluntary rather than mandatory reporting • Recognition schemes are important • ACCA awards, Chambers Ireland Award • External drivers are an important part of the Irish story: • Dow Jones Sustainability Index, the Global Compact, GRI, ISO14001 WBCSD, Stoxx Sustainability Index • A firm’s relationship to the emergent CSR regime is probably more significant indicator of the institutionalisation of reporting practices beyond compliance with regulation.