Sustainability reporting and strategic legitimacy: The influence of operating in emerging economies on the level of GRI reporting in Canada’s largest companies

Abstract

Corporate sustainability reporting is a contributor to strategic legitimacy (Chelli, Durocher, & Fortin, 2018) and certain traditional corporate characteristics (size, industry vulnerability) can influence the level of sustainability reporting (Drempetic, Klein, & Zwergel, 2020). However, limited literature exists in regards to sustainability reporting by Canadian companies operating in emerging countries. Content analysis of sustainability reports examined the current use of the Global Reporting Initiative (GRI) framework. Principal component analysis (PCA) provided a sustainability reporting index (SRI) measure for each firm using factor scores. Correlations and independent-samples t-testing tested the association of the level of reporting to a firm’s size, industry, level of internationalization, and level of activity in emerging economies. A review of 234 large Canadian-based, publicly-traded companies found a total of 86 companies employed the GRI framework, and data from these companies was used in this study. Asset size and vulnerable industries had no significant association with the level of sustainability reporting contrary to prior studies. Operating in emerging economies resulted in greater levels of sustainability reporting when compared to firms that do not. This finding is consistent with the external legitimacy strategy and contributes to the limited literature in this area