Question

The motivations/challenges in providing voluntary sustainability disclosures.

Please find two journal articles and write a paragraph summary of each journal. Include APA citation of each article

Answer 1

Summary of the first article:

The primary motivation for companies and organizations in providing voluntary sustainability disclosures is the motivation of increasing shareholder value. The second important motivation comes in the form of reputation management. Sustainability reporting is important to a set of shareholders particularly the institutional investors i.e. both the domestic institutional investors as well as the foreign institutional investors. By making sustainability disclosures the management aims to appeal to these investors and aims at adding more value for them. The second primary motivation is in the form of reputation management. Management often go for voluntary sustainability disclosures in order to be perceived as an environmentally-responsible company. Developing such an image and such a projection will help the company to gain the trust and confidence of not only its customers but other stakeholders (like vendors, suppliers, employees, etc.) as well. (Miji Kim, 2011)

Summary of the second article:

The second article talks about some additional motivations like improved access to capital and increased efficiency and waste reduction. Companies and organizations that provide voluntary sustainability disclosures face fewer capital constraints when compared to companies that do not provide these disclosures. Secondly companies providing voluntary sustainability disclosures will witness increased efficiency and waste reduction in the long run and in a tangible manner. In terms of challenges the main challenges are with regards to compiling reports that often require substantial commitment in terms of time and resources from the organization. This is more so the case in with regards to small and medium enterprises that have constrained resources at their disposal to work with. (DeRose John, 2016)

References:

(1): Kim M. (2011). Motivations for engaging in Corporate Social Responsibility reporting. Retrieved from http://www.diva-portal.org/smash/get/diva2:525164/FULLTEXT02.pdf

(2): DeRose J. (2016). Value of sustainability reporting. Retrieved from https://www.ey.com/Publication/vwLUAssets/EY_-_Value_of_sustainability_reporting/$FILE/EY-Value-of-Sustainability-Reporting.pdf