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The issue of sustainability is gaining prominence in the agenda of governmental and non-governmental organizations which are increasingly putting pressure on companies to incorporate sustainable practices into their business operations (Buhr, 2007). More recent attention has turned to the content of stand-alone "sustainability" reports, and developments like the Global Reporting Initiative (Milne et al, 2009). I will conduct a study on the expansion and development of Corporate Social Responsibility (CSR) in Oil and Gas companies established in Malaysia and United Kingdom. Through this research, I attempt to evaluate the development of Corporate Social Responsibility and further interpret the emerging importance of sustainability value reporting between countries. The report starts with a brief literature review that sets the context of this study. Justifications of the research topic will be given in the section that follows along with the research aims and objectives. Proceeding analysis will highlight the description of the research methodology which will be carried out. I intend to use qualitative content analysis in my research. Implications of the research and limitations will be briefly discussed in the section that follows.
2.0) Background Literature
2.1) Sustainability and Sustainability Development
The meaning of sustainability itself is contentious and has spurred much debate in the accounting literature (Bebbington, 1997). Sustainability is driven by "who the corporation thinks it is accountable to and what it is accountable for . . . response to various pressures, expectations and social changes . . ." (Buhr, 2007).The Brundtland Commision defines sustainable development as development which "meets the needs of the present without compromising the ability of future generations to meet their own needs . . . " (Buhr, 2007) The maturation of sustainable reporting is a slow process that is not much over a hundred years old (Buhr, 2007). The process begins with employee reporting and then moves on to social reporting, environmental reporting and ideally sustainability reporting (Buhr, 2007).
2.2) Sustainability Reporting
Although sustainability reporting or corporate social reporting has been the subject of substantial academic accounting research for over two decades, the literature does not possess an overall coherence (Ullmann, 1985). Corporate social reporting is not enshrined in legislation equivalent to Companies Acts; as a result it is neither practised systematically by organizations nor able to claim either universal recognition or universal definition (Gray et. al, 1995). Mathews (1993) implied that sustainability reporting involves "voluntary disclosures of information, both qualitative and quantitative of social, environmental and ethical made by organizations to inform or influence a range of audiences . . ." Inevitably, interest in CSR has waxed and waned as researchers have entered and left the field (Parker, 1986). Ullmann (1985) pointed out that there has been a lack of any agreed theoretical perspective to drive systematic research. Therefore, this has continually attracted doubts about its legitimacy as an area of accounting research enquiry (Gray et al, 1995).
2.3) Past Empirical Research on Sustainability Reporting
During the period 1971-1980, sustainability reporting literature was underdeveloped (Mathews, 1997). Early empirical studies had a variety of motivations. Bowman and Haire (1975) was one of the earliest studies which looked for a relationship between social responsibility disclosures and increased income to the corporation. Research found that the highest return on equity was associated with a medium level of social responsibility disclosures. Contradictory, Abbott and Monsen (1979) found no meaningful effect from a study of 450 corporations in the 1975 as they compared a social involvement disclosure scale rating with total returns to investors over the period 1964-1974. Mathews (1993) argued that during this period, majority of empirical studies were mainly descriptive and were not particularly sophisticated.
In the following period 1981-1990 empirical researches were more analytical and less descriptive (Mathews, 1997). Attention given to environmental matters increased dramatically, as empirical studies were more thorough, there were less normative. Furthermore, the period 1991-1995 saw an advancement of environmental issues. Mathews (1997) stated that this period was characterized by the complete domination of environmental accounting over social accounting. Hence, from 1996 till now, demands for business behaviours consistent with environmental and social responsibility, sustainable development and sustainability discourse are increasing (Milne et al, 2009). Gray and Bebbington (2000) stressed upon the importance of "eco-efficiencies", "win-win" solutions, and a "business case" for sustainable development. The emergent sustainability reporting discourse has encouraged extensive research into this field. O'Dwyer (2003) found that "sustainability reporting discourse is believed to have been captured by the corporate community. . ." Moreover, Livesey (2002) supported that academic research during this period has shown that "emerging corporate eco-discourse and reporting practices . . . reflect a corporate desire for hegemonic control . . ." This can also be viewed as organisational responses to the contexts in which they operate and attempts "to shape and manage the institutional field of which they are a part" (Hardy and Philips, 1999).
Adapted from Mathews (1997)
2.4) Theoretical Developments of Sustainability Reporting
Scholarly research on environmental and social reporting has been conducted from a number of different theoretical orientations. In 1996, Gray, Owen and Adams conducted research on sustainability reporting from the theoretical lenses of political economy theory (Gray et. al, 1996). Through this theoretical perspective, researchers seek to disclose the power interests that corporate reporting serves. However, this approach failed to provide means for fine-grain analysis of social practices and norms entailed in sustainability reporting (Livesey and Kearins, 2002). Furthermore, Campbell (2000) regarded legitimacy theory as a more appropriate theoretical approach (Campbell, 2000). This theoretical concept consistent with the stakeholder theory provided useful analysis for considering the function of reports from the perspective of organizational identity and legitimacy maintenance (Livesey and Kearins, 2002).
Furthermore, Everett and Neu (2000) researched into sustainable development emphasizing win-win solutions that benefit the corporation bottom-line as much as the natural environment. They failed to investigate the role of reporting in perpetuating the status quo. Olsen et al. (1992, p. 154) suggested that the values associated with sustainable development have moved away from oppositions over human-nature relationships, economic growth, and future generations to values associated with population control, long-term risk-aversion, product quality and durability, and economic stability. Thus, Diagram 1 below depicts the emergence of the sustainable development social paradigm.
Following this, Livesey and Kearins (2002) adapted the theoretical framework of Foucauldian tradition to reveal how firms use reports to make themselves "known" as contributing to sustainable development. Their research provided an insight into the evolving sustainability reporting discourse suggesting that "sustainability reporting is essentially instrumental . . . captured by the corporate agenda and preoccupied with the business case" (Livesey and Kearins, 2002). However, findings were ambiguous implying that sustainability discourse was an important topic for further research.
3.0 Justification of the research and identification of the research gap
This section will provide justifications of my research based on the overview of empirical and theoretical literature presented above. One of the reasons that contributed to the research topic is due to the lack of study conducted upon the comparison of sustainability reporting and corporate practices on an international perspective. My research intends to fill the gap by extending the works of Livesey and Kearins (2002). Their study examined the metaphors of transparency and care through analyzing sustainable values reports published by The Body Shop International and The Royal Dutch Shell (Livesey and Kearins, 2002). Specifically, they researched into the sustainability reporting of the two pioneering examples of a new genre of voluntary corporate reporting (Livesey and Kearins, 2002). Therefore, my research intends to complement the works of Livesey and Kearins (2002). Complementary to this, I will consider the flip side, exploring the differences between corporate voluntary disclosures between companies established in developed countries and developing countries.
Another reason for this gap is because there were inconsistent findings from studies between the relationships among social disclosure, social performance, and economic performance (Ullmann, 1985). There is some evidence of industry effects but studies are inconsistent to assess exactly what these effects might be (Gray et. al, 1995). Gray et al (1995) argued that " the country in which the organization is reporting seems to have a significant effect on sustainability reporting . . . it certainly seems to be the case that the subject of disclosure is both time and country-variant . . ." With my intended study, it can fill the gap in the literature and further explore the implications of country effect. Therefore, this explains the reason of choosing two countries Malaysia and United Kingdom as my research area as it allows further analysis into the sustainability development and effectiveness between countries.
4.0) Research Aims and Objectives
The purpose of this research is to analyse sustainability reporting development and importance of Corporate Social Responsibility of developing and developed countries. I chose Petronas National Berhad (Petronas) of Malaysia and The Royal Dutch Shell of United Kingdom as my research studies to evaluate the sustainability value reports published by these two countries respectively. I chose oil and gas commodity companies because there have been significant increase in awareness of sustainability value and performance in this energy industry over recent years which sparked my interest to explore the prominence of this discourse.
4.1) Research Objectives
For this study, I am proposing two objectives in accordance to my research aims. They are:
To compare the sustainable reporting performance progress between developing country (Malaysia) and developed country (United Kingdom)
To study the importance of sustainability reporting in the context of a voluntary environment in developed and developing countries
4.2) Research Questions:
What are the different key elements and corporate practices of the two chosen companies?
What are the differences or commonalities between the integration of social and environmental issues between developing and developed countries?
How do the sustainability reports differ in terms of language, image and text?
5.0) Methodology and Methods
I intend to use qualitative data analysis as my research methodology. For the purpose of my research method, I will base my research on qualitative content analysis as the main research methodology. This analysis will allow me to identify the common themes of sustainability values prominent in the two companies. Moreover, my study will incorporate a mix of critical discourse analysis, attempting to explore the different corporate practices of sustainable reporting. This allow me to critically analyse whether sustainability values reporting and dialogue that it claims to facilitate can promote more socially and environmentally responsive corporate decision making and how discourse is used to create reality (Livesey, 2002).
5.1) Empirical materials
For the purpose of this research, specific textual documents namely companies sustainability reports will be analyzed. The reason for using textual documents as written text underlines the linguistic character of much qualitative data (Silverman, 2006). Analyzing textual materials allows richness and relevance and effect used to represent reality (Silverman, 2006). Given the fact that there are significant differences between my two research companies in terms of size, demographic and culture, I attempt to find the congruities apparent in the corporate discourse and the commonalities of reporting development.
5.2) Analytic method
My study draws on qualitative content analysis which depicts a research method for subjective interpretation of the content of text data through the systematic classification process of coding and identifying themes or patterns (Hsieh and Shannon, 2005). Research using qualitative content analysis focuses on the characteristics of language as communication with attention to the content or contextual meaning of the text (Hsieh and Shannon, 2005) Qualitative content analysis goes beyond merely counting words to examining language intensely for the purpose of classifying large amounts of text into an efficient number of categories that represent similar meanings (Weber, 1990). The justification of using this research method is because I am aware of the necessary subjective nature of my research topic. Therefore, content analysis allows me to critically conduct a discourse analysis to understand the common themes and patterns of sustainability report disclosures. This work also deploys more in-depth qualitative and interpretive methods working with smaller samples of reports to understand business representations of sustainability and sustainable development within broader contexts (Gray and Bebbington, 2000). Ultimately, qualitative content analysis allows comprehensive comparison between the sustainability value reporting between two countries. Downe-Wamboldt (1992) acknowledged that the goal of content analysis is "to provide knowledge and understanding of the phenomenon under study". This is consistent with my research aim which can inform the research questions being investigated. Furthermore, such interpretative approach is chosen because of the flexibility of the research method which is useful in the context of my research (Hsieh and Shannon, 2005).
In order to facilitate my research; I generated research questions as discussed previously in the report. This sets out the backbone of my research allowing me to familiarise with the concepts that will guide me into further collection of data. With this in mind, I intend to perform an in-depth analysis of sustainability reports of both companies. My process of analysis involves independently reading the texts and identifying key statements employed when representing sustainable development (Hsieh and Shannon, 2005). I will then compare and discuss my findings to derive a manually coded set of overall themes. I will conduct a coding process, whereby data will be broken down into component parts. This process uses inductive reasoning, by which themes and categories emerge from the data through careful examination and constant comparison (Hsieh and Shannon, 2005). I propose that the results of this analytical process will allow me to identify common and key themes that represent sustainable development. These key findings and common themes will be used to analyse the emerging sustainability development between developed and developing countries. I will provide a discussion of the common themes that will allow me to engage in the implications of sustainability reporting between countries.
6.0) Expected Findings and Implications
I propose that my research intend to accomplish an understanding of what constitutes sustainability value reporting between developed and developing countries. The implication of my research will foster knowledge upon the emerging discourse of sustainability reporting. Through my research, I intend to explore the establishment and evolvement of sustainability value reporting practices in the current voluntary environment. Findings and common themes of this research will extend the current empirical research in sustainability reporting.
7.0) Limitations of the research
Laughlin (2004) stated that "all empirical research will be partial, despite any truth claims to the contrary, and thus it would be better to be clear about the biases and exclusions before launching into the empirical detail . . ." Therefore, I believe that it is important to state the limitations of my proposed research. Firstly, my research is qualitative in nature, thus I am aware that the findings of my research will be subjective in nature and disparagements may arise. I intend to approach my research based on a critical discourse analysis which may be subjective in validity of my propositions. Milne et al (2009) recognised that there will be unavoidable involvement in the construction of meaning as readers' re-interprete and articulation of those interpretations in this research may differ. Secondly, I am aware that the question of reliability may arise. Silverman (2006) stated that reliability of the interpretation may be gravely weakened as different observers produce different types of knowledge and will have different perspectives on the same phenomena. Furthermore, the notion of flexibility of qualitative content analysis may be criticised. Tesch (1990) stated that qualitative content analysis lacks a firm definition and procedures has potentially limited the application of the analysis.