Do Enterprises That Publish Sustainability Reports Have a Better Developed Environmental Responsibility and Are They More Transparent?

Abstract

Enterprises increasingly publish sustainability reports to address concerns about their environmental and social impact. However, the voluntary nature of these reports and the lack of independent auditing often lead to skepticism regarding their authenticity, with some perceiving them as mere marketing or greenwashing tools. This study aims to investigate whether the publishing of sustainability reports truly reflects transparency and responsible behavior. The relationship between the publishing of sustainability reports, environmental responsibility policies, and transparency policies is analyzed. The research was conducted in Uruguay. A quantitative methodology was used. The sample was made up of a group of companies that evaluate their social and environmental responsibility practices. This is a non-probabilistic sample, which includes companies that publish sustainability reports and companies that do not publish them. The environmental responsibility and transparency of both groups were compared. Thirteen indicators were used to measure environmental responsibility, and eight indicators were used to measure transparency. To evaluate the relationship between the variables, different statistical techniques were used: chi-square, difference of means test, and simple correlations. Our findings reveal that: (1) enterprises publishing sustainability reports tend to have more developed environmental responsibility policies and greater transparency compared to those that do not publish, and (2) interestingly, the choice of reporting standards, particularly the Global Reporting Initiative, does not significantly impact the observed outcomes. Furthermore, the relationship among report publication, environmental responsibility, and transparency is influenced by enterprise size but remains unaffected by public trading status or capital origin (local or international). Despite its methodological limitations, this work contributes to the debate on the sincerity of companies that publish sustainability reports. Its results contribute to reducing the skepticism and distrust that exists about these reports. Also, the work contributes to the study of the relationship between environmental responsibility and the publishing of reports because it included segments of companies that are not considered in most research: medium-sized companies and private companies that are not listed on the stock market.

1. Introduction

The examination of sustainability reports constitutes a rapidly evolving and multifaceted field [1]. In a landscape where numerous stakeholders, regulatory bodies, and governments demand insight into enterprises’ sustainability and social responsibility practices, these reports have become the primary means for enterprises to communicate their sustainability performance [2]. Such a type of report “becomes an institutionalized practice contributing in building the necessary knowledge for voluntary risk taking for all the actors involved in the value creation process” ([3] p. 15).

Towards the beginning of the 2000s, there was a substantial increase in the number of published sustainability reports [4]. A decade later, Mori, Dest, and Cotter [5] observed a significant rise in the percentage of enterprises publishing reports compared to earlier studies by Rikhardsosn, Andersen, and Bang [6] and Kolk [7]. This surge can stem from growing public scrutiny from various stakeholders, prompting enterprises to enhance their tracking of sustainability performance, as explained by Nilipour, De Silva, and Xuedong [8]. By 2015, over 90% of global companies listed in Fortune’s Global 250 had released sustainability reports [2]. According to Vukić et al. [3], a continued increase in the number of enterprises publishing such reports in the future is expected. They further note that “Dilemma for the business is no longer whether having a non-financial report or not, it is rather why, how and which report or option should companies choose to meet stakeholders needs and comply with the regulatory framework” ([3] p. 13). This trend, as highlighted by Arkoh, Constantini, and Scarpa [9], persists to the present day.

Modern sustainability reports reflect the culmination of a historical evolution dating back to the 1950s [10], emerging from antecedent tools designed for analogous purposes. Among these tools, the Social Audit, prevalent in Corporate Social Responsibility (CSR) literature of the 1960s–1980s, stands out. Carroll and Beiler ([11] p. 589) defined the Social Audit as “a concept for monitoring, appraising, and measuring the social performance of business”, framing it as a mechanism to operationalize CSR efforts aimed at assessing the social contribution of enterprises. Over time, the Social Audit underwent transformations in its purpose, application, scope, and methodology [11]. Fifka [4] notes that prior to 1980, reports predominantly focused on social concerns (termed social balances in Europe and Latin America), with environmental performance reports emerging in the 1980s and evolving to integrate social, environmental, and governance aspects in the new millennium, ultimately culminating in modern sustainability reports.

The proliferation of sustainability reports has not occurred uniformly across all countries. For instance, in the United Kingdom, the publishing of reports began to rise in 1979, accelerating from 1986 onwards, accompanied by amplified and diversified reporting issues during this period [12]. Similarly, in Australia, the increase in report publishing occurred between 1980 and 1991 [13]. Currently, the Asia-Pacific and Latin American regions are experiencing an uptick in report publication [3]. Notably, sustainability report publication is mandatory in France and South Africa, where it is integrated into financial reports. Additionally, countries such as the United Kingdom and Singapore legally require large enterprises and publicly traded companies to disclose their socio-environmental performance. However, in most countries, publishing these reports remains voluntary [8]. In developing countries, report publication rates are low [14], where only 25 out of the 500 largest enterprises engage in such reporting [15]. In summary, while many enterprises adopt CSR and sustainability policies, only a small percentage report on these initiatives. Moreover, research on sustainability reports leaves many key questions unanswered [16].

The voluntary nature of sustainability report publication in most countries [16], coupled with the lack of independent auditing, has led to skepticism regarding their accuracy. A notable study conducted in Australia found that environmental performance disclosures are often self-congratulatory, emphasizing positive aspects while omitting negatives [13]. Numerous authors have criticized the credibility and trustworthiness of these reports [2,17,18]. Gray ([17] p. 48) highlighted the growing criticism of these reports, asserting that “it is increasingly well-established in the literature that most business reporting on sustainability and much business representative activity around sustainability actually have little, if anything to do with sustainability”. Similarly, Manetti and Becatti ([19] p. 289) noted that “there is a credibility gap that renders sustainability reports an instrument little used by the traditional target users: shareholders, lenders, customers, employees and local communities”. Hess ([10] p. 462) contended that some enterprises submit incomplete information, and that “dissemble when they disclose favorable information but hide unfavorable information, fail to put their disclosures into the appropriate context or simply provide false disclosures”.

Other scholars have criticized the prevalence of unsubstantiated rhetoric in sustainability reports, which often excessively highlight success stories [20]. It has been suggested that “sustainability reports appear to be a marketing tool intended to positively impact the perceptions of stakeholders rather than be reliable source of information” ([2] p. 705). Furthermore, some enterprises are accused of using sustainability reports as a form of greenwashing or marketing ploy [21]. Nilipour et al. [8] assert that the publishing of sustainability reports ranges from genuine efforts to self-serving public relations exercises. Additionally, certain authors argue that reporting standards, such as those outlined by the Global Reporting Initiative (GRI), may inadvertently shield enterprises from thorough scrutiny [22].

Theoretical and methodological criticisms abound as well. Gray [12] noted a lack of cohesion in the literature on CSR reporting, attributing this to several factors, including the absence of foundational certainties and legislation typical of traditional accounting. They argue that much of CSR is subject to debate or questioning. More recently, Pombinho, Fialho, and Novas [23] highlighted the complexity of syntax and lack of transparency in many reports, which hindered the trustworthiness of information, especially when environmental and social information is concealed. Hamilton and Waters [24] identified methodological issues such as lack of comparability, precision limitations (including issues with materiality, reliability, and validity of indicators), and the absence of common criteria for information verifiability. Despite these criticisms, there is consensus that “its use will lead to increased corporate accountability, greater stakeholder democracy, and ultimately corporate practices that are more consistent with sustainable development” ([10] p. 447).

The prevailing circumstances underscore the imperative to assess whether the publishing of sustainability reports genuinely signifies transparency and a sincere commitment to CSR and sustainability. In essence, the fundamental question to address is whether enterprises that publish these reports demonstrate transparency and a genuine dedication to incorporating CSR into their management practices or not. One approach to answering this question involves comparing the transparency and actual social responsibility of enterprises that publish sustainability reports with those that do not. Many enterprises, particularly those with private capital, small and medium-sized, and family-owned businesses, are in the process of adopting CSR policies but refrain from publishing reports. This reluctance may stem from factors such as associated costs (consulting, dedicated personnel, auditing fees, etc.), lack of appropriate internal information systems, unawareness of the potential benefits of report publication, and skepticism about the veracity of disseminated information. If enterprises that publish reports act with sincerity—that is, if they supply accurate information—it can be expected that their transparency and social responsibility will either be greater than or comparable to other enterprises.

Given the multifaceted nature of CSR, this study focuses on one of its most pertinent dimensions: environmental responsibility. The research outlined in this document aims to answer the question: are enterprises that publish sustainability reports more advanced in terms of transparency and environmental responsibility? To address this inquiry, a non-probabilistic sample of 67 enterprises claiming alignment with CSR and participating in a self-assessment system of CSR in Uruguay was utilized. Roughly half of these enterprises publish sustainability reports, while the remaining half do not. Additionally, the study analyzed the mediating role of other variables in the relationship between report publication and environmental responsibility. They are segmentation variables that were selected based on identified gaps in the research field, which will be elucidated subsequently. Environmental responsibility was operationalized using a battery of 13 indicators, while transparency was operationalized through eight indicators. The information was obtained from the enterprises via self-administered questionnaires.

It was observed that enterprises publishing sustainability reports exhibit greater development in terms of environmental responsibility and transparency. Additionally, transparency was found to mediate the relationship between these two variables. When considering two homogeneous groups of enterprises categorized by their level of transparency, the differences in environmental responsibility between enterprises publishing sustainability reports and those that do not vanish. This finding raises questions about how transparency influences the relationship between report publication and environmental responsibility. Moreover, the study sheds light on the behavior of certain enterprise profiles that have been underrepresented in this field of research, namely small and medium enterprises (SMEs), non-publicly traded entities, and those with local capital.

2. Theoretical Framework

2.1. Problems That Affect the Credibility of Sustainability Reports

As previously noted, the study of sustainability reports has emerged as a field of growing importance [1], with ongoing expansion [9]. Empirical investigations into these reports have focused on various topics, including methodological aspects and content-related issues such as materiality of information, legibility, use of standards, and assurance of information. These studies contribute to the discourse on the validity and utility of reports in accurately informing stakeholders about enterprise sustainability practices. For reports to gain credibility and usefulness to stakeholders, the disclosed information must be trustworthy, presented appropriately, and adhere to clearly defined standards [2,25]. Boiral et al. ([2] p. 704) proposed that, to build credibility, “the information disclosed must be reliable, appropriately presented, and clearly follow defined rules”. Table 1 presents a selection of articles addressing these topics, organized by their respective themes. Each article’s issue, unit of analysis (reports, enterprises, stakeholders, etc.), and number of citations as indicated by Google Scholar (we included the number of citations on Google Scholar up to 18 March 2024) are included. While the selection of articles is not random, it qualitatively identifies trends in publications, justifying the relevance of certain hypotheses examined in this study. The number of citations, contextualized by the year of publication, constitutes a direct indicator of each article’s significance in the field of sustainability report research.

One crucial aspect of sustainability reports is the materiality of their contents, which pertains to the relevance of the disclosed information for stakeholders. Calabrese, Costa, Levialdi Ghiron, and Menichini ([26] p. 1017) defined it as: “the principle of materiality aims at guiding decision makers to identify and to be clear about sustainability issues that matter”. The significance of materiality for report quality, particularly its accuracy, has led to its importance being emphasized by the GRI. According to Almeida Machado, Pinto Dias, and Fonseca ([27] p. 571), “Materiality is, therefore, fundamental to either prevent or remedy the old problem of ‘cherry-picking’ positive information and omitting negative issues, which can lead to the camouflage of unsustainable practices”. “Materiality analysis is conceived as a systematic and rigorous process, contributing to the identification of significant, stakeholder-oriented metrics” ([26] p. 1019). Materiality necessitates the inclusion of information on all externalities of the enterprise relevant to stakeholders in sustainability reports, irrespective of whether it is positive or negative. This underscores the importance of stakeholder participation in report writing and feedback provision to authors. Johansen [28] highlights that social accounting often does not intend to obtain feedback from recipient stakeholders. A recent study focusing on global enterprises that compile reports using the GRI methodology found a lack of information on the methodologies employed to determine the materiality of selected topics included in the reports [27].

Independent assurance of information included in sustainability reports is a significant topic of consideration. Milne and Adler [29] identified serious reliability issues in the analysis of sustainability report content, highlighting the importance of qualified auditors to verify information accuracy. Hussey, Kirsop, and Meissen [30] expressed academic concern regarding verifying report content. Conversely, Brown-Liburd and Zamora [31] noted an increasing interest among investors in the USA, where report publication is voluntary, for independently assured reports. Voluntary external assurance enhances reliability and credibility [32] by reducing the potential for concealing sustainability-related negative aspects [33]. Furthermore, independent assurance may function as an indirect indicator for stakeholders of “a commitment to deeper values such as trust, credibility and reliable reporting” ([33] p. 234). Additionally, independent verification is recognized as a partial indicator of transparency [34]. Mori, Best, and Cotter [5] identified several benefits of independent verification, including improving the report development process, enhancing the quality of disclosed information, and reinforcing stakeholder trust.

Perego and Kolk [35] investigated internal and external driving forces for report assurance among enterprises in the Fortune Global 250. Internal drivers included enhancing credibility with stakeholders and generating organizational improvements by refining internal information systems and report presentations. External drivers comprised institutional pressures and stricter legislation in some countries. Similarly, Mori et al. [5] identified driving forces among enterprises in the Fortune 500, including improving information quality, reinforcing credibility among stakeholders, and enhancing the reporting process.

Despite its significance, the supply of independent assurance remains scarce [31]. Mori et al. [5] observed that, despite an increase in the percentage of enterprises publishing reports in recent years, the percentage of auditors remained stagnant. Simnett, Vanstraelen, and Chua [36] investigated 2113 large enterprises across 31 countries producing sustainability reports between 2002 and 2004. Only 13% of these enterprises audited their report contents professionally, with significant variations between countries. Manetti and Becatti [25] examined various standards guiding report audits, including international standards like ISAE 3000 and AA1000 AS, as well as local standards in countries such as Australia, Sweden, Germany, the Netherlands, France, and Italy. They concluded that each standard lacked specific guidelines for audit providers. The criticism also extends to external audit providers. Hussey, Kirsop, and Meissen ([30] p. 3) found that “research indicates that third-party certification does not add much value or credibility unless there is an agreed-upon standard for reporting and the certification agency is trusted”. They suggested that future versions of the GRI methodology should establish audit provisions distinguishing between third-party audits and self-audits ([30] p. 17). Additionally, some authors question the independence of assurance providers and the quality of assurance statements [19,37].

Regarding compliance of standards for the design of reports, despite their existence, universal application is lacking. In the absence of standards, enterprises determine what to report and how, potentially leading to omissions of information on areas of underperformance [24]. Morhardt, Baird, and Freeman [38] assessed compliance with GRI standards among 40 Fortune 500 enterprises, finding that only 20% adhered to these standards. They concluded, “There is a tremendous gap between what large companies think is appropriate to report and what is hoped for by the Global Reporting Initiative” ([38] p. 225). Despite the widespread use of GRI, achieving universal standards compliance in sustainability report preparation remains a challenge. It is expected that greater compliance with standards corresponds to a higher degree of materiality and accuracy in reported information.

The legibility of sustainability reports is closely intertwined with the accuracy of the information they contain. Legibility refers to the ease of reading and comprehending the report’s contents [39]. It has been noted that poor legibility can be exploited to manipulate information, such as hiding negative aspects by presenting them in a confusing manner [39]. Pombinho et al. [23] highlighted that many reports exhibit highly complex syntax aimed at obscuring negative environmental and social information. The lack of legibility can manifest in various ways, including information overload that overwhelms readers with irrelevant details [8]. Despite extensive studies of legibility in financial reports, the same attention has not been afforded to sustainability reports [8,23,40]. Pombinho et al. [23] noted a scarcity of literature on the legibility of sustainability reports. One of the few studies on the topic, conducted by Wang et al. [39], found that enterprises with stronger CSR performance are more likely to publish reports with better legibility. They concluded that enterprises with lower CSR performance may use complicated sentences to minimize stakeholder reaction to negative information in the reports. Bakar and Ameer [41] identified legibility issues in CSR information included in sustainability reports of publicly traded enterprises in Malaysia. Additionally, they found that enterprises with better financial performance display their CSR practices in a more understandable manner than those with poorer financial performance.

Table 1. Articles on topics related to the veracity of sustainability reports.

Topics They Investigate	Article	Issue	Unit of Analysis	N° of Citations
Materiality of the information included in the reports	Johansen [28]	Studies the materiality of reports for the employees of enterprises that include their participation in decision making.	Employees of companies that participate in decision making	37
	Calabrese et al. [26]	Proposes a practical and structured approach for an analysis of materiality of reports.	Case study: SME of Italy	106
	Almeida Machado et al. [27]	Studies the materiality of reports included in the base of GRI.	Big and global Enterprise	85
Compliance of standards	Milned and Adler [18]	Study on the reliability of methods for realizing an analysis of reliable contents of the RS.	Publicly traded enterprises in New Zealand	2049
	Morhardt, Baird and Freeman [38]	Evaluates how much environmental reports comply with the standards of the GRI 2000 .	Enterprises of the Fortune 500 of four industrial sectors	563
	Marinescu [42]	Studies the compliance of the standards of the GRI 4 for enterprises indexed in the GRI official site.	Big enterprises of Rumania	9
	Berniak-Woźny and Kawasek [43]	Comparative study on the scope and quality of the practices of presentation of sustainability reports between enterprises.	Enterprises of the healthcare sector in Europe and North America	5
	Hamilton and Waters [24]	Study of the use of international standards in the writing of sustainability reports.	Enterprises in the Top 50 of Fortune and universities of the top 50 of the USNWR	17
	Ikpor et al. [44]	Studies the importance of the governance of the board of directors on the quality of sustainability reports.	Big publicly traded enterprises in Nigeria	0
Assurance of the information and audit	Simnett, Vanstraelen and Chua [36]	Study of the factors that affect the decisions of enterprises on hiring an external audit for their RS.	Enterprises of 31 countries that produced sustainability reports	1623
	Manetti and Becatti [25]	Describes the main universal standards of the assurance services of the RS and a critical analysis of them.	Declarations of assurance of 34 RS included in the base of GRI	478
	Perego and Kolk [35]	Studies the evolution of assurance practices and their diversity between 1999 and 2008.	Global Enterprises of the Fortune 250	612
	Mori, Best and Cotter [5]	Descriptive study of the practices of elaboration and assurance of sustainability reports.	Global Enterprises of the Fortune 500	518
	Brown-Liburd and Zamora [31]	Studies the role of assurance when the remuneration of the directives is linked to sustainability.	Individual investors	231
	Al-Shaer and Zaman [33]	Studies the relationship between external independent assurance and the inclusion of objectives related to sustainability in contracts of compensation of the executive directors.	Enterprises of the UK FTSE350 (United Kingdom)	188
	Boiral, Heras-Saizarbitoria, Brotherton and Bernard [2]	Analysis of the opinions of quality assurance, the limitations of sustainability reports, and recommendations to improve.	Declarations of assurance of reports of mining and energy enterprises	253
	Bauwhede and Van Cauwenberge [32]	Investigates the determinants of assurance of the sustainability reports in the European Union.	Enterprises of 19 countries of the European Union	14
Legibility (readability) of reports	Bakar and Ameer [41]	Studies the relationship between performance of CSR and the legibility of communications of CSR in Malaysia.	Publicly traded enterprises in Malaysia
	Wang et al. [39]	Studies the relationship between the performance of CSR and the legibility of reports of CSR.	Big enterprises in the USA	331
	Nilipour, De Silva and Xuedong [8]	Examines the legibility of the reports of publicly traded enterprises.	Publicly traded enterprises in New Zealand	31
	Smeuninx, De Clerck and Aerts [40]	Studies the legibility of reports of big companies in the USA, Europe, Australia, and India.	Reports of mining, petroleum, semiconductor, and clothing enterprises	80
	Pombinho et al. [23]	Through literature review, performs a critical analysis of the gaps and future opportunities in the literature on legibility of sustainability reports.	Does not correspond	0

Source: Own elaboration.

Table 1. Articles on topics related to the veracity of sustainability reports.

Topics They Investigate	Article	Issue	Unit of Analysis	N° of Citations
Materiality of the information included in the reports	Johansen [28]	Studies the materiality of reports for the employees of enterprises that include their participation in decision making.	Employees of companies that participate in decision making	37
	Calabrese et al. [26]	Proposes a practical and structured approach for an analysis of materiality of reports.	Case study: SME of Italy	106
	Almeida Machado et al. [27]	Studies the materiality of reports included in the base of GRI.	Big and global Enterprise	85
Compliance of standards	Milned and Adler [18]	Study on the reliability of methods for realizing an analysis of reliable contents of the RS.	Publicly traded enterprises in New Zealand	2049
	Morhardt, Baird and Freeman [38]	Evaluates how much environmental reports comply with the standards of the GRI 2000 .	Enterprises of the Fortune 500 of four industrial sectors	563
	Marinescu [42]	Studies the compliance of the standards of the GRI 4 for enterprises indexed in the GRI official site.	Big enterprises of Rumania	9
	Berniak-Woźny and Kawasek [43]	Comparative study on the scope and quality of the practices of presentation of sustainability reports between enterprises.	Enterprises of the healthcare sector in Europe and North America	5
	Hamilton and Waters [24]	Study of the use of international standards in the writing of sustainability reports.	Enterprises in the Top 50 of Fortune and universities of the top 50 of the USNWR	17
	Ikpor et al. [44]	Studies the importance of the governance of the board of directors on the quality of sustainability reports.	Big publicly traded enterprises in Nigeria	0
Assurance of the information and audit	Simnett, Vanstraelen and Chua [36]	Study of the factors that affect the decisions of enterprises on hiring an external audit for their RS.	Enterprises of 31 countries that produced sustainability reports	1623
	Manetti and Becatti [25]	Describes the main universal standards of the assurance services of the RS and a critical analysis of them.	Declarations of assurance of 34 RS included in the base of GRI	478
	Perego and Kolk [35]	Studies the evolution of assurance practices and their diversity between 1999 and 2008.	Global Enterprises of the Fortune 250	612
	Mori, Best and Cotter [5]	Descriptive study of the practices of elaboration and assurance of sustainability reports.	Global Enterprises of the Fortune 500	518
	Brown-Liburd and Zamora [31]	Studies the role of assurance when the remuneration of the directives is linked to sustainability.	Individual investors	231
	Al-Shaer and Zaman [33]	Studies the relationship between external independent assurance and the inclusion of objectives related to sustainability in contracts of compensation of the executive directors.	Enterprises of the UK FTSE350 (United Kingdom)	188
	Boiral, Heras-Saizarbitoria, Brotherton and Bernard [2]	Analysis of the opinions of quality assurance, the limitations of sustainability reports, and recommendations to improve.	Declarations of assurance of reports of mining and energy enterprises	253
	Bauwhede and Van Cauwenberge [32]	Investigates the determinants of assurance of the sustainability reports in the European Union.	Enterprises of 19 countries of the European Union	14
Legibility (readability) of reports	Bakar and Ameer [41]	Studies the relationship between performance of CSR and the legibility of communications of CSR in Malaysia.	Publicly traded enterprises in Malaysia
	Wang et al. [39]	Studies the relationship between the performance of CSR and the legibility of reports of CSR.	Big enterprises in the USA	331
	Nilipour, De Silva and Xuedong [8]	Examines the legibility of the reports of publicly traded enterprises.	Publicly traded enterprises in New Zealand	31
	Smeuninx, De Clerck and Aerts [40]	Studies the legibility of reports of big companies in the USA, Europe, Australia, and India.	Reports of mining, petroleum, semiconductor, and clothing enterprises	80
	Pombinho et al. [23]	Through literature review, performs a critical analysis of the gaps and future opportunities in the literature on legibility of sustainability reports.	Does not correspond	0

Source: Own elaboration.

Kaptein and Van Tulder [45] emphasize that these reports “they lack legitimacy and transparency” ([45] p. 221) despite the increasing number of enterprises publishing them. This skepticism regarding the veracity of disclosed information in these reports carries significant implications for CSR and sustainability research. These reports constitute foundational sources for constructing CSR and sustainability indexes, which are extensively utilized in empirical research. Global indexes such as the SID Scale, the Bloomberg index, and Thomson Reuters’ ESG index, as well as market-specific indexes like China’s Hexum and Istanbul’s Sustainability Index, are among them [46]. Despite the professional construction methodologies designed to ensure the reliability and validity of scores, the challenge lies in utilizing information of varying quality levels, including potentially dubious veracity. Moreover, academics often incorporate information from sustainability reports into their research. They analyze the report contents to assign scores to enterprises, which are then utilized in statistical analysis. Similar to professionals constructing indexes, academics must contend with issues of materiality, legibility, and veracity in the information they work with. Thus, the reliability of research findings may be influenced by the quality of information sourced from sustainability reports.

2.2. Environmental Responsibility and Sustainability Reports

The analysis presented in the previous section underscores the necessity for further research on the validity of sustainability reports concerning CSR and sustainability. One indirect approach to addressing this need involves comparing the performance of enterprises that publish reports with those that do not. Given the effort involved in publishing these reports, it is reasonable to expect that enterprises engaging in this practice are more committed to CSR and sustainability than those that do not. Therefore, it stands to reason that the former are more advanced in these matters than the latter. While this result may not completely dispel doubts about the veracity of each report, it does suggest that the act of publishing reports itself differentiates between enterprises that are more socially responsible and those that are less so. This study aims to evaluate this issue, focusing exclusively on one dimension of CSR: environmental responsibility. The following hypothesis will be tested:

Hypothesis 1.

The publishing of sustainability reports has a positive relationship with environmental responsibility performance.

Next, the definitions of two concepts involved in this hypothesis will be shown. Environmental responsibility is interpreted here as a dimension of CSR. Despite the lack of consensus on the concept of CSR, numerous studies have found that the environmental dimension is integral to CSR, regardless of how the concept is defined. This is evident in historical research on the evolution of CSR [47,48,49,50,51], studies identifying the dimensions observed in various definitions [52,53,54], and research constructing typologies of definitions [55,56].

In this study, the definition of CSR proposed by Licandro, Vásquez Burguete, Ortigueira, and Correa [57] will be adopted, inspired by the definition included in the ISO 26000 guide [58]. According to Licandro et al. ([57] p. 10), CSR is defined as: “a management philosophy that establishes that the management of companies must seek to minimize the operational externalities on stakeholders, society in general, and the environment, as well as generating positive externalities on them” (p. 10). Within this framework, environmental responsibility entails the responsible management of the externalities of the enterprise’s operations on the environment. The ISO 26000 guide categorizes these responsibilities into four categories: (1) preventing pollution; (2) sustainable resource use; (3) climate change mitigation and adaptation; and (4) protecting the environment, biodiversity, and restoring natural habitats.

The Global Reporting Initiative defines sustainability reports as “the practice of measuring, disclosing, and being accountable to internal and external stakeholders for organizational performance towards the goal of sustainable development” ([59] p. 3). Rowe ([60] p. 223) offers a complementary definition: “a means to measure organizational performance towards the goal of sustainability, thereby providing useful information for decision-making and discharging accountability to stakeholders through reporting”. This study adopts a slightly more flexible definition. A sustainability report is defined here as a document that, under that name or similar ones (e.g., social responsibility reports, social balance, social memory, sustainability memory), includes information on the externalities of the enterprise’s operations on their stakeholders, society in general, and the environment. These documents serve as a means for enterprises to be accountable for their social and environmental responsibility. Given that accountability is one of the seven principles on which socially responsible governance is based [61], sustainability reports play a fundamental role in the governance of enterprises practicing CSR. It is important to note that this definition includes less sophisticated reports published by SMEs and enterprises that do not adhere to international standards, such as the GRI.

The expectation that reports developed based on international standards, such as the GRI, contribute to addressing materiality, legibility, and veracity problems is well-founded. This is why many enterprises are transitioning from the use of local standards to international ones [62]. Among academics, there is consensus that the GRI is the most comprehensive and widely used standard [2,63]. Marinescu ([42] p. 362) highlighted that “the GRI is the reporting framework that is widely recognized as a leader in the international standardization of sustainability reports”. Hussey, Kirsop, and Meissen [30] concluded that the GRI offers the best methodology for reporting on all aspects related to sustainable development. Enhert et al. [64] identified two key characteristics of the GRI that contribute to this consensus: standardized reporting formats and detailed guidelines, reducing subjective interpretation by companies, and enhancing validity. Additionally, the GRI evaluates report quality and classifies them accordingly, with the highest category (A+) requiring adherence to strict criteria that include the following: (1) informing on all items indicated in the grid; (2) are verified by external auditors and (3) GRI realized a formal verification of its contents [61]. Perego and Kolk [35] acknowledged that incorporating GRI guidelines contributed to higher report quality.

However, it has been noted that in many cases, reports based on the GRI do not fully comply with its requirements and technical protocols [2]. Given these considerations, it is debatable whether enterprises publishing sustainability reports using the GRI methodology demonstrate higher environmental responsibility than those using other standards. To address this question, the following hypothesis will be tested:

Hypothesis 2.

Enterprises that publish sustainability reports based on GRI standards demonstrate higher environmental responsibility performance than those using other standards.

2.3. Transparency and Sustainability Reports

Repeated crises and scandals, such as those involving Enron, WorldCom, and Parmalat, have heightened the demand for greater transparency across various domains, leading to the integration of governance topics into sustainability reports [7]. This has resulted in an increase in regulations and norms requiring enterprises to exhibit higher levels of transparency in social, environmental, and governance issues [3]. Transparency is a key factor in the relationship with stakeholders because it allows the development of trust and credibility with them [58]. Taking accountability increases the transparency of organizations [58] because it increases “the number of things which are made visible, increases the number of ways in which things are made visible and, in doing so encourages an increasing openness” ([58] p. 415).

The ISO 26000 guide identifies transparency as one of the seven principles underpinning socially responsible governance, defining it as “openness about decisions and activities that affect society, the economy and the environment, and willingness to communicate these in a clear, accurate, timely, honest and complete manner” ([58] p. 4). Additionally, the guide emphasizes the importance of how: “An organization should disclose in a clear, accurate and complete manner, and to a reasonable and sufficient degree, the policies, decisions and activities for which it is responsible, including their known and likely impacts on society and the environment” ([58] pp. 10–11). Transparency is also facilitated through communication and dialogue with stakeholders. In this study, transparency is defined as the enterprise’s willingness to share truthful, precise (legible), and complete information on all relevant aspects of its operations (materiality) that affect stakeholders. Thus, transparency can be conceptualized within the framework of CSR.

Transparency is a concept closely associated with the presentation of reports, particularly sustainability reports [34]. Organizations frequently emphasize the need to supply transparent reports to stakeholders and society at large. Sustainability reports assist enterprises in meeting stakeholders’ expectations regarding social, environmental, and governance transparency, thereby enhancing credibility [21]. Publishing sustainability reports fosters transparency in organizations [65,66,67]. Transparency is a behavior that helps address information asymmetry between managers and stakeholders. While AI between managers and shareholders is well-documented, it also exists among all stakeholders. Although research demonstrates that voluntary or mandatory disclosure of financial information reduces AI, there is no evidence that publishing sustainability reports achieves the same effect [68].

Transparency and the quality of reports reinforce each other, as transparency is essential for the materiality and legibility of information. Materiality requires dialogue with stakeholders, making transparency a prerequisite for this engagement [26]. Transparency is also crucial to ensure that information in reports is clear and truthful. Given these considerations, it is reasonable to expect that enterprises publishing reports will exhibit greater transparency than those that do not. Consequently, the following hypotheses will be evaluated:

Hypothesis 3.

The publication of sustainability reports is positively related to enterprises’ transparency with their stakeholders.

Hypothesis 4.

Enterprises publishing sustainability reports based on GRI standards demonstrate better transparency with their stakeholders than those using other standards.

2.4. Gaps in Research

The analysis of existing empirical research on sustainability reports reveals a concentration on large global corporations and enterprises listed on national stock markets, as evidenced in Table 1. In a recent bibliographic review of articles on sustainability reports, Farisyi et al. [14] identified nine distinct types of segmentation variables, including size and nationality of ownership (local vs. foreign). However, none of these studies considered the type of enterprise (public or private). This highlights a significant gap in knowledge, as much of the accumulated research in this field focuses on publicly traded enterprises, leaving important gaps in understanding the practices of sustainability reporting in non-publicly traded enterprises. There is also a scarcity of research on small and medium-sized enterprises (SMEs) and local enterprises. Arkoh et al. [9] suggested that “para llenar los vacíos existentes e inspirar futuros desarrollos de investigación, los hallazgos sugieren que el trabajo adicional se centre en empresas que no cotizan en bolsa” (p. 1). Additionally, Arkoh et al. [9] emphasized the need to investigate the role of variables such as foreign ownership and family ownership. To address this gap, this study will test the following hypothesis:

Hypothesis 5.

The relationship between the publication of sustainability reports and performance in environmental responsibility operates independently of enterprise size, type (public or private), and capital origin (local or foreign).

3. Methodology

To evaluate the validity of the hypotheses, a quantitative study was designed. The characteristics of this research are described below.

3.1. Population and Sample

The research was carried out in Uruguay. In this country, Corporate Social Responsibility was introduced in the late 1990s. Since that time, a growing number of companies have incorporated CSR into their management. The population for this study consists of enterprises in Uruguay that claim to align with Corporate Social Responsibility (CSR) principles. These enterprises participate in CSR forums, belong to organizations promoting CSR, or publicize their CSR activities through various channels. They are companies of different sizes and nationalities (local or international). Some are public capital, and others are private capital. A total of 67 enterprises from this population agreed to participate in a CSR evaluation program implemented by an association of managers and businessmen in 2019 (Asociación Cristiana de Dirigentes de Empresas (https://acde.org.uy, accessed on 15 May 2024)). It is important to note that this sample was not selected using a random procedure. Therefore, it is a non-probabilistic sample. It is not a representative sample of the companies that operate in Uruguay, nor of the subset of companies that apply CSR. The participating enterprises disclosed information through a questionnaire, which was completed by one or more representatives from each company. Respondents were instructed to write down objective evaluations of their company’s management practices related to CSR, refraining from offering personal opinions and ensuring accuracy by carefully verifying the information before responding. Consequently, the questionnaire is not an opinion poll but an instrument that tries to measure, in the best way possible, real facts. The rationale for selecting this population is to compare the environmental responsibility of enterprises that publish sustainability reports with those that do not within a context where all enterprises are committed to incorporating CSR practices. This ensures comparability among the enterprises included in the study. Comparing with enterprises not engaged in CSR practices would not be feasible or meaningful for the purposes of this study.

3.2. Variables and Indicators

Environmental Responsibility, within the scope of this study, is contextualized as a facet of the broader concept of Corporate Social Responsibility (CSR). It encompasses the conscientious management of externalities arising from enterprise operations on the environment. This entails efforts to minimize or mitigate negative environmental impacts while fostering positive contributions. To operationalize environmental responsibility, a set of 13 indicators, aligned with the four categories delineated in ISO 26000, was employed.

These indicators encompass actions targeting specific environmental externalities. Enterprises were tasked with assessing the extent of their policy development for each indicator: (1) does not perform actions or only does isolated actions; (2) is in the process of designing a policy; (3) has a policy but only recently has been spreading it internally; (4) has begun to internalize this policy in their operations; (5) this policy is fully implemented and is integrated into their strategy. This classification formed an ordinal Likert-type scale supported by semantic validation. By synthesizing these indicators, an Environmental Responsibility index (INDRM) was formulated. The reliability of this index was validated using Cronbach’s alpha.

Transparency. Eight indicators related to information policies directed towards shareholders, employees, clients, and the community in general were utilized. These indicators also refer to the development of specific policies and are evaluated with the same scale used to evaluate the indicators of environmental responsibility. Through their combination, a transparency index was built (INDTRANSP). The reliability of this index was validated using Cronbach’s alpha.

Publishing of Sustainability Reports. In the questionnaire, enterprises were asked whether they publish any type of sustainability report. Based on their responses, a nominal binary variable (RS1) was constructed: 1 (publishes a report) and 2 (does not publish a report). If the enterprise does publish a report, the last published report was searched, with the goal of identifying the methodology used to elaborate it. Another nominal variable (RS2) was constructed to identify the methodology used: 1 (publishes a report using GRI), 2 (publishes a report without using GRI), 3 (does not publish a report). The sample was distributed into three segments: 16%, 31%, and 52%.

Segmentation variables. Segmentation variables were employed to categorize enterprises based on the following three key factors: (1) size, (2) type of enterprise (public or private), and (3) origin of capital (local or international). Regarding their profile, the sample was distributed as follows: (1) enterprises that had fewer than 100 employees (31%), had between 100 and 500 employees, and had more than 500 employees (39%); (2) in terms of enterprise type, 18% were public, while 75% were private; (3) regarding the origin of capital, 79% of enterprises were locally funded, while 21% received international funding.

The questionnaire was administered in a self-administered format during the second semester of 2019, affording participants the opportunity to seek clarification or ask questions as needed. Data collected through the questionnaire was subsequently compiled into a database, and statistical analyses were conducted using SPSS 22 software.

Statistics analysis. Different statistical techniques were used in the statistical analysis. To study the relationship between the publication of reports and the profile of the companies, the chi-square test was used. To evaluate the reliability of INDRM and INDTRANSP, Cronbach’s alpha was calculated. To verify the five hypotheses, the mean difference test was used, which is based on an ANOVA test. The relationship between INDRM and INDTRANSP was verified through simple correlation analysis. It is important to note that the mean difference test, the chi-square test, and simple correlation analysis allowed the establishment of statistical relationships between the variables but not causal relationships.

4. Results

Initially, the chi-squared test was conducted to ascertain whether the proportion of enterprises publishing sustainability reports varied across different segments determined by size, enterprise type, and capital nationality. Results are presented in

Table 2. Publishing of sustainability reports in segments determined by the size, type, and nationality of the capital. Results of the chi-squared test.

Variable	Segments	Publishes Report	Chi-Squared	Sign
Size	Up to 100	43%	4.876	0.087
	300 to 500	33%
	More than 500	65%
Type of enterprise	Public	67%	1.991	0.158
	Private	44%
Nationality of capital	Local	47%	0.036	0.850
	International	50%

Source: Own elaboration.

. Notably, a discernible relationship was observed between enterprise size and report publication: larger enterprises exhibited a markedly higher propensity to publish reports. The obtained significance level (0.087) was deemed acceptable given the constraints of a small sample size. Similarly, a significant disparity was noted between public and private enterprises, albeit with a confidence level of 80% or lower for the extrapolation of results. Conversely, no statistically significant distinctions were found between enterprises of local and international origin. These findings underscore the potential pitfalls of generalizing results from investigations predominantly focused on publicly traded large enterprises to the broader spectrum of enterprise types. Consequently, the significance of this study is underscored by these observations.

Subsequently, Cronbach’s alpha was computed to assess the reliability of both the environmental responsibility index (INDRM) and the transparency index (INDTRANSP). As depicted in

Table 3. Descriptive statistics, Cronbach’s alpha, and correlation between indexes.

Indexes	Mean	Median	Standard Deviation	Cronbach’s Alpha	Correlation Coefficient
INDRM	3.32	3.54	1.33269	0.955	0.669 *
INDTRASP	4.25	4.50	0.91315	0.888

* The relation is significant with 0.001. Source: Own elaboration.

, Cronbach’s alpha for both indexes significantly exceeds the recommended minimum threshold of 0.800. Additionally, descriptive statistics for both indexes are displayed. Notably, the analysis reveals that enterprises exhibit a higher degree of development in transparency policies compared to environmental responsibility policies. This discrepancy is evident in both the mean and median values, which differ by approximately one point on the scale ranging from 1 to 5. Furthermore, standard deviation values suggest a greater dispersion of data in the environmental responsibility index compared to the transparency index. Lastly, the correlation coefficient between the two indexes is presented in the last column. With a coefficient value of 0.669 and a high level of significance, it indicates a strong correlation between the two indexes. This correlation can be extrapolated with a confidence level equal to or greater than 99%, underscoring the robustness of the relationship between transparency and environmental responsibility.

Verification of hypotheses 1 and 2. To assess hypothesis 1, a test of differences in means was employed to compare the average Environmental Responsibility Index (INDRM) values between enterprises that publish sustainability reports (RS1) and those that do not.

Table 4. Relation between indexes and publishing of reports: means difference test.

Publishing RS	Publishing of Reports	INDTRANSP	INDRM
RS1	Publishes	4.57	3.63
	Does not publish	3.96	3.04
	F	8.398	3.444
	Sign	0.005	0.068
RS2	Publishes GRI	4.59	3.41
	Publishes another one	4.56	3.75
	Does not publish	3.96	3.04
	F	4.140	1.961
	sign	0.020	0.149

Source: Own elaboration.

presents the following results of this analysis: (1) the average value of INDRM in each category of RSI and (2) the results of the ANOVA test (F-value and the two-tailed level of significance). It indicates that enterprises publishing reports exhibit higher environmental responsibility scores (3.63) than their non-publishing counterparts (3.04). The F-value (3.444) and significance level (0.068) suggest a positive relationship between RS1 and INDRM, with a confidence level of 90. Given the small sample size, this is a good confidence level to accept that the difference between means is statistically significant. Additionally,

Table 5. Indicators utilized for constructing an index that measures the degree of development of environmental responsibility policies.

ISO 26000 Category	Indicator	Action the Indicator Refers to	Pub	Does Not Pub	Sign
Prevention of pollution	RM1	Reduce the impact of contaminants in their production and commercial activities	3.91	3.24	0.076
	RM2	Minimizing the use of products that are toxic and dangerous for the health of humans and animals	4.03	3.44	0.126
	RM3	Implementation of prevention measures that tend to avert accidents with dangerous and/or contaminant effects on the health of humans and animals	4.16	3.50	0.089
Sustainable resource use	RM4	Minimize the use of energy, non-renewable ones in particular	3.59	3.00	0.134
	RM5	Utilizing material that is recycled, recyclable, and/or reutilizing water as much as possible	3.47	2.94	0.164
Climate change mitigation and adaptation	RM5	Minimizing the negative effects of their equipment and vehicles	3.38	3.10	0.484
	RM6	Adopt sustainable production systems	4.44	3.64	0.196
Protection of the environment, biodiversity, and restoration of natural habitats	RM7	Evaluate, monitor, and control the environmental impact of their production and commercial activities	3.72	3.21	0.187
	RM8	Manage in a responsible manner the final destination of the waste that it generates (industrial waste, office waste, computer equipment, etc.).	4.25	3.46	0.020
	RM9	Have an efficient use of inputs and raw materials, which results in activities that are negative for the environment (plastic, lead, etc.)	3.53	2.94	0.115
	RM10	Boost, alongside other enterprises, the diffusion of good practices regarding environmental management	3.03	2.70	0.430
	RM11	Bolster and carry out educational actions directed towards workers, consumers, students, and other collectives to encourage their environmental responsibility	3.31	2.81	0.178
	RM12	Support initiatives bolstered by other institutional actors (organizations of civil society, state agencies, etc.) geared toward the protection of the environment	3.34	2.91	0.270

Source: Own elaboration.

displays the results of the test applied to each of the 13 environmental responsibility indicators, revealing consistently higher scores among report-publishing enterprises, although the ANOVA test indicates low significance levels in most cases. Consequently, the overall data validates hypothesis 1: The publishing of sustainability reports has a positive relationship with the performance of environmental responsibility.

On the other hand, hypothesis 2 examined the performance disparity between enterprises utilizing GRI standards and those employing other methodologies. In regard to hypothesis 2, The ANOVA test results, using RS2 as the independent variable, indicated no statistically significant difference between enterprises adopting GRI and those using alternative standards (F = 1.961, sign. = 0.149). Moreover, the environmental responsibility index value was slightly higher for non-GRI users (3.75) compared to GRI users (3.31). Consequently, hypothesis 2, the enterprises that publish sustainability reports based on the standards of the GRI have a higher performance in terms of environmental responsibility than those that use other standards, is rejected.

Verification of hypotheses 3 and 4. As depicted in Table 4, enterprises publishing sustainability reports exhibit a notably higher average transparency index (4.57) compared to non-publishing counterparts (3.96). The ANOVA test results underscore the significance of this difference (F = 8.398, p = 0.005).

Table 6. Indicators utilized to construct the index that measures the degree of transparency of enterprises.

Indicator	Action That the Indicator Refers to	Pub	Does Not Pub	Sign
TRASP1	Inform in a truthful and opportune way to the stockholders about the financial situation and economic results.	4.83	4.21	0.013
TRASP2	Inform in a truthful and opportune way to the stockholders about decisions of strategic importance for the enterprise, given that it does not affect the necessary confidentiality.	4.64	4.38	0.370
TRASP3	Inform the workers of relevant and pertinent matters that affect or could affect them.	4.47	3.71	0.009
TRASP4	Inform the workers adequately of their rights and obligations.	4.69	4.00	0.006
TRASP5	Inform in a clear and truthful way the real benefits and quality of their products and services.	4.88	4.26	0.010
TRASP6	Inform in a clear and truthful way the prices, specifications, and contractual conditions of products and services.	4.97	4.31	0.005
TRASP7	Offer necessary information on the security and healthiness of the products and services, as well as their adequate use.	4.86	4.15	0.018
TRASP8	Give information in a clear and truthful way on the environmental impacts of their production activities and their use of products that are toxic and dangerous for the health of humans and animals.	3.35	3.42	0.879

Source: Own elaboration.

further illustrates this discrepancy across all eight indicators composing the transparency index, with most cases demonstrating highly significant differences. Consequently, hypothesis 3, which posits that “the publishing of sustainability reports has a positive relationship with the transparency of enterprises with their stakeholders”, is validated. Conversely, Table 4 indicates that utilizing the GRI methodology (4.59) does not result in discernibly different transparency levels compared to other methodologies (4.56). Thus, hypothesis 4, “Enterprises publishing sustainability reports based on GRI standards demonstrate better transparency with their stakeholders than those using other standards”, is rejected based on the available data.

Considering the strong positive correlation between transparency and the other two variables and the comparatively weaker correlation between sustainability report publication and environmental responsibility, it is pertinent to argue whether transparency works as a mediator between sustainability report publication and environmental responsibility. To address this inquiry, the sample was divided into two sub-samples based on their transparency index values. The first sub-sample comprised enterprises with transparency index values below the mean (3.54), while the second sub-sample included those with values above the mean. A test of differences in means was conducted to analyze the relationship between the Environmental Responsibility Index (INDRM) and sustainability report publication (RS1) within each sub-sample. The results are detailed in

Table 7. Relation between the environmental responsibility index and the publishing of reports, mediated by the degree of transparency.

Publishing of Reports	Transparency
	High	Low	All
Publishes	3.99	2.10	3.63
Does not publish	3.84	2.19	3.04
F	0.221	0.030	3.444
sign	0.641	0.864	0.068
n	44	23	67

Source: Own elaboration.

.

Interestingly, within each transparency segment, the relationship between RS1 and INDRM diminishes. This suggests that when comparing relatively homogenous enterprises in terms of transparency, the act of publishing sustainability reports does not inherently correlate with higher levels of environmental responsibility. Moreover, the data reveals that enterprises publishing reports and practicing transparency also exhibit environmentally responsible behaviors: their means (3.99 and 3.84) are higher than the sample media (3.32). Conversely, enterprises publishing reports lacking transparency tend to display lower environmental responsibility: their means (2.10 and 2.19) are lower than the sample media.

Verification of Hypothesis 5. Uruguay, with its relatively small population of 3.426 million inhabitants, hosts enterprises that are comparatively modest in scale when juxtaposed with those of other nations. In this country, any enterprise with over 100 employees is considered a big enterprise. To facilitate international comparability, the sample was stratified into enterprises with fewer than 300 employees and those with more. A test of difference in means was conducted to study the relationship between the Environmental Responsibility Index (INDRM) and sustainability report publication (RS1) within each segment. The results, presented in

Table 8. Relation between the index of environmental responsibility and publishing of reports, mediated by the segmentation variables of the enterprises.

RS1	Size		Type of Enterprise		Nationality of the Capital		All
	<300	>300	Public	Private	Local	International
Publishes	3.66	3.62	3.71	3.50	3.72	3.31	3.63
Does not publish	2.92	3.08	3.64	2.86	2.70	4.41	3.04
F	2.188	1.394	0.007	3.005	9.276	2.952	3.444
sign	0.149	0.247	0.937	0.089	0.004	0.111	0.068
n	34	31	12	50	53	14	67

Source: Own elaboration.

, indicate that in both segments, enterprises that publish reports exhibit higher environmental responsibility. However, the significance level of this relationship is low, likely attributed to the small size of each sub-sample. As differences observed are notable (3.66 vs. 2.92 and 3.62 vs. 3.08), it is suggested that the association between RS1 and INDRM persists across enterprises of all sizes, with a low level of confidence.

Furthermore, Table 8 presents the outcomes of applying the test of differences in means within public and private enterprises. While no significant differences were observed in environmental responsibility within publicly traded enterprises between those that publish reports (3.71) and those that do not (3.64), a statistically significant disparity was evident within private enterprises: 3.50 vs. 2.86 (with a confidence level exceeding 90%). Thus, enterprise type emerges as a variable influencing the relationship between RS1 and INDRM. Notably, within local enterprises (owned by national businessmen), a substantial difference in environmental responsibility was observed between those that publish reports (3.72) and those that do not (2.70), a relation deemed highly significant from a statistical standpoint by the ANOVA test. Conversely, within international enterprises (global or owned by non-residents of Uruguay), the relationship appears inverted (INDRM: 3.31 for publishers vs. 4.41 for non-publishers), albeit with low statistical significance. These findings suggest that the nationality of capital acts as a mediator in the relationship between RS1 and INDRM.

In summary, the association between sustainability report publication and environmental responsibility manifests as follows: (1) it exists and is positive regardless of enterprise size; (2) it exists and is positive within private enterprises but not within publicly traded ones; (3) it exists and is positive within enterprises of local capital but exhibits a negative trend within those of international capital. Consequently, Hypothesis 5 is rejected based on these outcomes.

5. Conclusions

This study scrutinized a sample of enterprises actively integrating Corporate Social Responsibility (CSR) practices into their management. Consequently, it offers a valuable opportunity to juxtapose the behavior of enterprises that publish sustainability reports with those that do not. Notably, it was discovered that two-thirds of large enterprises, along with an equivalent proportion of public enterprises, issue sustainability reports. These figures underscore the widespread adoption of this reporting practice within these segments, a trend not mirrored among SMEs and smaller enterprises. Given that a significant body of CSR and sustainability research hinges on the analysis of these reports or indexes derived from their contents (e.g., SID Scale, Bloomberg index, ESG index of Thomson Reuters), the findings of this study cast doubt on the validity of extrapolating research outcomes to all types of enterprises based solely on these indexes. For instance, research investigating the relationship between CSR and financial performance often employs these indexes [46], potentially overlooking the limitations of their applicability to SMEs and private enterprises.

This study addresses the ongoing debate regarding the credibility of sustainability reports. Concerns such as the absence of materiality, clarity, and independent verification of the content in many reports have led to widespread distrust and skepticism about their reliability as information sources. This study seeks to determine whether these enterprises are genuinely responsible. We employed environmental responsibility, assessed through an alternative instrument, as an indirect measure of the accuracy of the information presented in the reports. Our findings indicate that the average level of environmental responsibility policies among enterprises that publish sustainability reports (mean = 3.63) is not particularly high, yet it is notably greater than that of enterprises that do not publish such reports (mean = 3.04). These results support the existing skepticism and mistrust of sustainability reports, although this evidence is not conclusive. While this study does not directly verify the accuracy of the information within the reports, it does reveal a stronger commitment to environmental responsibility among reporting enterprises. Consequently, although sustainability reports are not without flaws, they can still be valuable sources of information when interpreted with caution.

The predominant strategy in the development of sustainability reports is the utilization of standards aimed at enhancing the materiality and veracity of the information contained within them. Among these standards, the Global Reporting Initiative (GRI) stands out as the consensus choice. Consequently, many researchers anticipate that, on average, reports based on GRI will exhibit greater truthfulness compared to those that do not adhere to it. However, this study did not uncover statistically significant differences in environmental responsibility between enterprises utilizing GRI and those that do not. Given that environmental responsibility served as an indirect indicator of report veracity in this study, the lack of discernible improvement in veracity among GRI-utilizing enterprises challenges the assumption that GRI ensures report accuracy. Since we employed an indirect indicator and did not verify the accuracy of the contents of the reports from the enterprises included in the sample, it is not appropriate to conclude that the GRI fails to ensure the veracity of these reports. Nonetheless, this issue remains open to question.

The literature review reveals that existing research on sustainability reports predominantly focuses on large public enterprises. This prompts the question of whether findings from such research can be generalized to SMEs and private enterprises, given that small and private enterprises constitute a minority among entities incorporating CSR practices. In this study, enterprises with over 500 employees accounted for 39% of the sample, while public enterprises represented only 18%. It was observed that publishing sustainability reports correlates positively with environmental responsibility across enterprises of varying sizes, yet this relationship does not hold true for different types of enterprises. Specifically, while the relationship exists for private enterprises, it is not evident among publicly traded ones. Consequently, while size does not pose a barrier to extrapolating findings from large enterprises to SMEs, caution is warranted when extending conclusions derived solely from publicly traded enterprises to private counterparts. Thus, this study underscores the limitations of predominantly focusing on public enterprises in sustainability report research and advocates for targeted research initiatives aimed at non-publicly traded enterprises.

This study provides a significant contribution by integrating transparency into the relationship between publishing sustainability reports and environmental responsibility. Notably, transparency is often overlooked as a control variable in research on reports. Enterprises engage in accountability with their stakeholders through various mechanisms, with sustainability reports being the most comprehensive and sophisticated means. However, authentic accountability requires transparency, wherein enterprises openly disclose information. When transparency becomes a governing principle and core value, accountability becomes more genuine, consequently enhancing the credibility of sustainability reports. This study found that transparency acts as a mediator in the relationship between report publication and environmental responsibility. Upon introducing transparency as a control variable, the previously observed relationship between report publication and environmental performance diminishes. Among enterprises with well-established transparency policies, environmental performance is significantly higher, regardless of whether they publish reports. Consequently, reports from enterprises that prioritize transparency are likely to contain accurate information and exhibit fewer legibility issues, even in the absence of external audit verification. As such, this study suggests incorporating transparency indicators as a means of indirect verification to enhance the quality of research based on sustainability reports. This recommendation stands out as a significant contribution of this study to the field.

This study provides several significant contributions to the field of sustainability report research and to the indexes based on the contents of these reports. Firstly, this study employed an alternative source of information to contrast with the reports. We used data on enterprises’ policies concerning environmental responsibility and transparency gathered through a questionnaire. This questionnaire did not solicit value judgments on these issues but rather requested relatively objective information: the existence of policies and the extent of their integration into the enterprise’s strategy. While there is a possibility that some respondents may have been dishonest or subjective to some extent, this information is markedly different from that included in the reports. Therefore, this study introduces a methodology for indirectly evaluating the veracity of these reports, which can be utilized by any researcher. This methodology involves incorporating an alternative source of information to compare against the contents of the reports. For instance, in research based on content analysis of reports, researchers could apply a brief questionnaire on the implementation of CSR policies and key issues. In this study, we focused on the environmental dimension of CSR, but indicators related to specific stakeholders could also be employed. Subsequently, researchers can use the questionnaire responses to assess the accuracy of the information on topics included in the reports used as a source of information.

Moreover, the findings of this study shed light on important insights. Specifically, the results challenge the validity of extrapolating research findings exclusively based on sustainability reports to all enterprises engaged in CSR. Given that a significant portion of such enterprises do not publish reports and that those who do tend to exhibit lower levels of environmental responsibility and transparency. Additionally, the study underscores the need to diversify research samples beyond publicly traded enterprises to include private enterprises, which are often underrepresented in CSR research.

A particularly significant contribution of this study is the identification of transparency as a key mediator. Existing research often overlooks the evaluation of transparency in enterprises publishing sustainability reports. By highlighting the crucial role of transparency in mediating the relationship between publishing reports and environmental responsibility, this study underscores the importance of assessing transparency as an indirect means of evaluating the veracity of sustainability reports. It suggests that enterprises with robust transparency policies are more likely to produce accurate and reliable reports.

Resarch limitations. This study is subject to several limitations, underscoring the need to interpret the results with caution. Firstly, there are statistical limitations stemming from the unclear definition of the universe (enterprises aligned with CSR), leading to inadequate delineation of the sample. Non-random sampling diminishes the robustness of statistical techniques, which typically rely on randomly selected samples. Moreover, the small sample size resulted in high margins of error and hindered the attainment of more suitable significance levels in statistical tests (≤0.05). Additionally, the limited sample size precluded the exploration of a greater number of segments for the size variable. Secondly, the research relied on previously available information from a pre-existing database. The questionnaire used to create the database was initially designed as a self-evaluation tool for CSR policies, lacking specificity for this investigation. Consequently, operationalizing main variables like environmental responsibility and transparency required adaptation to the database’s indicators. While environmental responsibility indicators covered CSR’s four dimensions outlined in the ISO 26000 guide, transparency operationalization was primarily based on information policies directed at three stakeholders. Thirdly, due to the absence of information on report veracity, environmental responsibility was used as an approximation. This study operated under the assumption that enterprises with good environmental performance are likely to include truthful information in their reports. However, this assumption may not be robust. Lastly, the information available on sustainability reports was limited to whether enterprises published reports and whether they adhered to the GRI standard in said reports. Factors such as materiality, legibility, and independent verification of report contents were not analyzed. Consequently, this study has a preliminary and exploratory nature due to these limitations.