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Abstract
Literature assessing the quantity and quality of voluntary social and
environmental reporting has shown critical reflections regarding the quality
and reliability, the (largely) qualitative nature of disclosure with lack of
measurability, credibility or comparability, and information being biased
and self-laudatory in nature with minimal disclosure of negative information.
Among environmentally-sensitive sectors, forest-based industry has a
crucial role in global sustainable development, not only because of its
unique raw material basis, but also because of the ongoing industry
globalization in the emerging and developing countries. The contribution of
this study is important in at least two dimensions: first, providing empirical
quantitative insight regarding the current patterns in responsibility
disclosure of the forest-based sector at a global level; and second, by taking
a quantitative approach in investigating determinants of the disclosure.
Changing patterns in the economic, environmental and social performance
of the forest-based industry were analyzed using the Global Reporting
Initiative (GRI) framework, which represents an international cooperative
effort to establish sustainability reporting guidelines for voluntary use by
organizations worldwide. We seek to shed more light on what are the key
responsibility or sustainability issues the global forest companies address,
and which of the firm and industry level determinants are significant on the
quality of disclosure? Sustainability disclosure of 66 top forest industry
companies is first content analyzed based on the GRI framework, after
which significance of industry and firm characteristics, including
geographic location, business line and financial performance, will be used
as testing the determinants influencing the quality and level of disclosure.
Based on the content analysis, more emphasis was found to be placed on the
environmental and economic responsibility in contrast to areas concerning
human rights, labour practices, social and product responsibility in the
forestry sector. Main findings from the regression modeling include a
significant positive effect from company size on the quality and extent of CR reporting practices in the forest industry; no effect from the financial
performance; little regional variation; and illustration of difference in
disclosure orientation between integrated forest industry companies and
those with more narrowly focused business. From the managerial
perspective, in the future, business leaders in the forest industry are
expected to adopt a more proactive role not only in reducing the
environmental footprint or promoting sustainable forest management, but
also in furthering social goals.