The interpret transparency of sustainability reports

Sammanfattning: Sustainability reporting is something that has gained much ground lately, and there is no sign of it decreasing. The purpose of a sustainability report is to disclose the non-financial information between a company and its stakeholders. To present a sustainability report is mandatory for larger companies, many smaller companies do also provide its stakeholder with one voluntarily. In the last decade there has been a steadily increasing trend when it comes to being environmentally friendly. More companies need to take responsibility for their actions in the world, in order for it to sustain and last longer. There have been some scandals throughout the years when it comes to sustainability reporting which has made a negative impact on the reliability of the reports. Previous research and literature have shown that there are a lot of uncertainties when it comes to what exactly transparency means and how it can be interpreted from different perspectives and situations. The purpose with this study is to collect information and analyze the interpret transparency of a sustainability report from an investors perspective. The information collected can then be addressed to answer the research question “How is the transparency in a sustainability report perceived by an investor?.” The thesis is using a qualitative methodology consisting of semi-structured interviews and has an inductive research approach. The theories connected to the conceptual framework in this thesis is signaling theory and legitimacy theory. The semi-structured interview was made with people who own stocks in a company that presents a sustainability report, also called investors. Twelve investors were interviewed and provided good information to create a comprehensive answer for the research question. The result of this study shows that the investors do not think a sustainability report is transparent enough. They believe that companies do not show the whole truth in a sustainability report. The information is not fully complete, one hundred percent truthful, as objective as it can be/not angled, and the information is used in other purposes rather than just disclose non-financial information. These answers do not match up with a general definition of transparency which then means that a sustainability report is not interpreted as transparent by the investors participating in this particular study. The investors do also believe that one general definition of transparency or area specific definition would be better. They do also advocate for more external interference of the reports.