Human bias in corporate sustainability reporting
Kozlova, Liubov (2023)
2023
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2023060521194
https://urn.fi/URN:NBN:fi:amk-2023060521194
Tiivistelmä
Accounting for sustainability has been in an ambiguous position between financial accounting and marketing materials for decades. Recently, there has been a global push for standardising and regulating the field of sustainability reporting. Despite the emergence of several reporting frameworks, the risk of subjectivity, bias and greenwashing in annual sustainability reports remains high.
The goal of this thesis was to establish whether human bias plays a role in the annual sustainability reporting process, how significant is this impact, and how to mitigate it. This was done through a qualitative analysis of annual reports of largest publicly trading Finnish companies. Statements made in the reports were grouped by tone and medium to expose the inconsistencies between the reported data and the message conveyed.
This research showed the significant and consistently present gap between the available validated data and the amount of positive statements. It further showed that this disparity entered the reporting process during the writing of the annual report, confirming the decisions made by the employees in the re-porting team as the cause for bias. Additionally, it exposed several key ways in which reported statements become biased.
Based on these findings, suggestions for eliminating human bias from the annual reports were provided. The focus is on improving clarity, validity, and providing better context for the statements. As the reporting frameworks leave room for ambiguity in reporting, it remains the individual responsibility of every company to attain high quality in its corporate social responsibility statements.
The goal of this thesis was to establish whether human bias plays a role in the annual sustainability reporting process, how significant is this impact, and how to mitigate it. This was done through a qualitative analysis of annual reports of largest publicly trading Finnish companies. Statements made in the reports were grouped by tone and medium to expose the inconsistencies between the reported data and the message conveyed.
This research showed the significant and consistently present gap between the available validated data and the amount of positive statements. It further showed that this disparity entered the reporting process during the writing of the annual report, confirming the decisions made by the employees in the re-porting team as the cause for bias. Additionally, it exposed several key ways in which reported statements become biased.
Based on these findings, suggestions for eliminating human bias from the annual reports were provided. The focus is on improving clarity, validity, and providing better context for the statements. As the reporting frameworks leave room for ambiguity in reporting, it remains the individual responsibility of every company to attain high quality in its corporate social responsibility statements.