Corporate Sustainability Reporting A New Approach for Stakeholder Communication.

Martha Fani Cahyandito

Corporate Sustainability Reporting

Martha Fani Cahyandito

Corporate Sustainability Reporting
A New Approach for Stakeholder Communication

Schriften aus dem Institut für Forstökonomie
der Universität Freiburg
Band 23
www.forstbuch.de

Mit Unterstützung der

Corporate Sustainability & Citizenship ‐ Nachhaltigkeitskommunikation 

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i

Table of Contents
List of Figures and Tables _______________________________________ v
Abstract ____________________________________________________ viii
Zusammenfassung ____________________________________________ x

1

INTRODUCTION _________________________________1
1.1 Research Background ______________________________1
1.2 Research Goal and Questions ________________________5

1.3 Research Approach ________________________________6
1.4 Research Structure_________________________________6

2

THEORETICAL FRAMEWORK_______________________9
2.1 The Corporation and Its Stakeholders___________________9
2.1.1 Corporation ______________________________________ 9
2.1.2 Stakeholders and the Stakeholder Model ______________ 11
2.1.3 Mutual Relationships between the Corporation and its
Stakeholders as a Precondition for Business Success ____ 18

2.2 Communication and Corporate Communication __________22
2.2.1 Communication __________________________________
2.2.2 Corporate Communication _________________________
2.2.2.1 Corporate Identity and Organisational Identity ___
2.2.2.2 Corporate Image __________________________

22
28

30
34

2.3 Sustainability Reporting ____________________________38
2.3.1 Overview of Sustainability Reporting _________________ 38
2.3.2 Benefits of Sustainability Reporting __________________ 39
2.3.3 Pressures on Companies to Produce Sustainability Reports 41
2.3.3.1 Pressures exerted by Corporate Stakeholders___ 41
2.3.3.2 Pressure exerted by Governments and Authorities 42
2.3.3.3 Pressures exerted by International Organisations 43
2.3.4 Guidelines for Sustainability Reporting ________________ 45
2.3.5 Contents of Sustainability Reports ___________________ 47
2.3.6 Trustworthy Sustainability Reporting__________________ 53
2.3.6.1 Inclusion of Stakeholder Interests in the Report __ 53
2.3.6.2 Verification from External Parties _____________ 55

ii
2.3.6.3 Stakeholder Comments ____________________ 56
2.3.7 Publication of Sustainability Reports__________________ 56

2.4 Exploring the Effectiveness of Communication by means of
a Sustainability Report ____________________________ 58
2.4.1 Phases of Communication Effects ___________________ 58
2.4.2 Step Models of Communication Effects _______________ 60
2.4.3 How to Explore the Effectiveness of Communication by
means of a Sustainability Report_____________________ 68

3

METHODOLOGICAL FRAMEWORK OF THE CASE
STUDIES ______________________________________ 79
3.1 Collection of Social Data ___________________________ 79
3.1.1 Selection of Companies as Research Objects __________
3.1.2 Selection of Respondents __________________________
3.1.2.1 Population _______________________________
3.1.2.2 Sampling ________________________________
3.1.3 Interviews as a Data Collection Technique _____________
3.1.3.1 Interview Types: Oral or Written ______________
3.1.3.2 Form/Situation of Interview: Weakly, Semi and
Fully Structured___________________________

3.1.3.3 Questionnaire as an Interview Guideline _______
3.1.3.4 Scaling _________________________________

79
82
82
84
88
90
93
94
96

3.2 Recording of Social Data __________________________ 98
3.3 Valuation and Analysis of Social Data_________________ 98
3.3.1 Content Analysis as Data Analysis Technique __________ 99
3.3.2 Statistical Methods: Frequency Distribution and
Contingency Coefficient __________________________ 100

4

RESULTS AND DISCUSSIONS OF CASE STUDY 1:
SUSTAINABILITY REPORTING AT DEUTSCHE
TELEKOM AG _________________________________ 105
4.1 Deutsche Telekom AG ___________________________ 105
4.2 The Effectiveness of Deutsche Telekom’s Sustainability
Reporting _____________________________________ 107
4.2.1 The Interview Partners ___________________________
4.2.2 Managers’ Perception of the Sustainability Report and the
Corporate Stakeholders __________________________
4.2.2.1 Understanding the Term ‘Sustainability Report’ _
4.2.2.2 The Importance and Value of Sustainability
Reporting_______________________________

107
108
109
109

iii

4.2.2.3
4.2.2.4
4.2.2.5
4.2.2.6

Motives for and Goals of Sustainability Reporting
The Most Important Stakeholders____________
The Making Process ______________________
The Contents of the Report and Communicated
Sustainability Issues ______________________
4.2.2.7 The Distribution Process___________________
4.2.2.8 Corporate Image from the Managers’ Point of
View __________________________________
4.2.2.9 Improving the Sustainability Report __________
4.2.3 Pre-communicative Phase: Stakeholders’ Perception of
the Corporation and Sustainability Report ____________
4.2.3.1 Familiarity ______________________________
4.2.3.2 Interest in Sustainability Reports ____________
4.2.4 Communicative Phase: Stakeholders’ Acceptance of the
Report ______________________________________

4.2.4.1 Comprehension__________________________
4.2.4.2 Preference______________________________
4.2.4.3 Conviction ______________________________
4.2.5 Post-communicative Phase: Effects of Communication by
means of the Sustainability Report __________________
4.2.5.1 Understanding the Corporation and its Activities
4.2.5.2 Image _________________________________
4.2.5.3 Intention/Behavioural tendencies ____________

109
110
110
111
114
115
116
116
117
126
127

128
138
146
150
151
152
155

4.3 The Interrelations of the Communication Components of
Telekom’s Sustainability Report _____________________157

5

RESULTS AND DISCUSSIONS OF CASE STUDY 2:
SUSTAINABILITY REPORTING AT WELEDA AG ______164
5.1 Weleda AG _____________________________________164
5.2 The Effectiveness of Weleda’s Sustainability Reporting ___165
5.2.1 The Interview Partners ___________________________
5.2.2 Managers’ Perceptions of the Sustainability Report and
Corporate Stakeholders __________________________

5.2.2.1 Understanding the Term ‘Sustainability Report’ _
5.2.2.2 The Importance and Value of Sustainability
Reporting_______________________________
5.2.2.3 Motives for and Goals of Sustainability Reporting
5.2.2.4 The Most Important Stakeholders____________
5.2.2.5 The Making Process ______________________
5.2.2.6 The Contents of the Report and Communicated
Sustainability Issues ______________________
5.2.2.7 The Distribution Process___________________
5.2.2.8 Corporate Image from the Managers’ Point of
View __________________________________

166
167
167
167
168
169
169
170
173
174

iv
5.2.2.9 Improving the Sustainability Report __________
5.2.3 Pre-communicative Phase: Stakeholders’ Perception of
the Corporation and Sustainability Report ____________
5.2.3.1 Familiarity ______________________________
5.2.3.2 Interest in Sustainability Reports ____________
5.2.4 Communicative Phase: Stakeholders’ Acceptance of the
Report ______________________________________
5.2.4.1 Comprehension__________________________
5.2.4.2 Preference______________________________
5.2.4.3 Conviction ______________________________
5.2.5 Post-communicative Phase: Effects of Communication
with the Sustainability Report ______________________
5.2.5.1 Understanding the Corporation and its Activities
5.2.5.2 Image _________________________________
5.2.5.3 Intention/Behavioural tendencies ____________

175
175
176
183
184
184
194
203
207
207
208
211

5.3 The Interrelations of the Communication Components of
Weleda’s Sustainability Report _____________________ 212

6

SYNTHESIS, CONCLUSIONS AND
RECOMMENDATIONS __________________________ 217
6.1 Synthesis _____________________________________ 217
6.1.1
6.1.2
6.1.3
6.1.4

Point of Departure _______________________________
Contents of the SR ______________________________
Layout / Understandability_________________________
Style and Communication Method __________________

217
221
223
226

6.2 Recommendations ______________________________ 228
6.2.1 Recommendations to Design and Contents of the SR ___ 228
6.2.2 Reception of the Sustainability Report _______________ 229

List of Literatures _____________________________________________231
List of Appendices ____________________________________________248

v

List of Figures and Tables
List of Figures
Figure 1: Research Structure ______________________________________ 8
Figure 2: The Corporation and Its Stakeholders _______________________ 15
Figure 3: ‘One-sided Communication’ Model (Asymmetric) ______________ 23
Figure 4: ‘Two-sided/Reciprocal Communication’ Model (Symmetric) ______ 25
Figure 5: Communication Scheme _________________________________ 26
Figure 6: Elements of the Corporate Identity Mix ______________________ 33
Figure 7: Relation between Corporate Identity and Corporate Image_______ 35
Figure 8: Benefits of Sustainability Reporting _________________________ 40
Figure 9: Relationship between Communication Effect Categories ________ 60
Figure 10: Models of Communication Effects _________________________ 65
Figure 11: Communication Scheme of a Sustainability Report ____________ 70
Figure 12: Interview Situation as a Reaction System ___________________ 89
Figure 13: Questions and Answers as a Process ______________________ 90
Figure 14: Data Collection Process________________________________ 104
Figure 15: Stakeholders’ Association with Deutsche Telekom (n=24) _____ 118
Figure 16: Telekom Stakeholders’ Understanding of the Term ‘Sustainability
Report’ (n=30) _______________________________________ 122
Figure 17: SR in Comparison with Other Kinds of Reports from Telekom
Stakeholders’ Point of View (n=29) _______________________ 123
Figure 18: Feeling of Being Addressed by Telekom’s SR (n=32) _________ 124
Figure 19: The Interest of Telekom Stakeholders in Sustainability Report
(n=31)______________________________________________ 126
Figure 20: Percentage of Telekom’s SR Read (n=31) _________________ 128
Figure 21: Time Spent on Reading the Telekom’s SR (n=31)____________ 129
Figure 22: Structure/Theme Classification of Telekom’s SR (n=31) _______ 130
Figure 23: Language Style of Telekom’s SR (n=31) ___________________ 131
Figure 24: Font Type and Size in Telekom’ SR (n=31) _________________ 132
Figure 25: Length of the Telekom’s SR (n=31) _______________________ 133
Figure 26: Favoured Amount of Pages of Telekom’s SR (n=11)__________ 134
Figure 27: Readability of Telekom’s SR (n=31)_______________________ 134
Figure 28: Design and Colour of Telekom’s SR (n=31)_________________ 135
Figure 29: Reading Enjoyment of Telekom’s SR (n=31) ________________ 136
Figure 30: Distribution of the Telekom’s SR (n=31) ___________________ 137
Figure 31: Percentage of the Environmental Issues Found in Telekom’s SR
(n=26)______________________________________________ 138
Figure 32: Expected Environmental Issues Found in Telekom’s SR (n=26)_ 139
Figure 33: Missing or Poorly Presented Environmental Issues in Telekom’s
SR (n=26)___________________________________________ 140
Figure 34: Percentage of the Social Issues Found in Telekom’s SR (n=27)_ 141
Figure 35: Expected Social Issues Found in Telekom’s SR (n=27) _______ 142

vi
Figure 36: Missing or Poorly Presented Social Issues in Telekom’s SR
(n=27)______________________________________________
Figure 37: Percentage of the Economic Issues Found in Telekom’s SR
(n=17)______________________________________________
Figure 38: Expected Economic Issues Found in Telekom’s SR (n=17) ____
Figure 39: Missing or Poorly Presented Economic Issues in Telekom’s SR
(n=17)______________________________________________
Figure 40: Reliability of Telekom’s SR (n=28) ________________________
Figure 41: Improving the Reliability of Telekom’s SR and Making It Look
More Interesting (n=32) ________________________________
Figure 42: Comparison with the Previous Telekom’s SR (n=31)__________
Figure 43: Stakeholders’ Understanding of Deutsche Telekom and Its
Activities (n=31) ______________________________________
Figure 44: Cloud Figure Showing the Relation between the Two Variables
‘Length of the Report’ and ‘Percentage Read’ _______________
Figure 45: The Interrelation of the Communication Components of
Sustainability Reporting at Deutsche Telekom AG ___________
Figure 46: Stakeholders’ Association with Weleda (n=23) ______________
Figure 47: Weleda stakeholders’ Understanding of the Term ‘Sustainability
Report’ (n=12) _______________________________________
Figure 48: SR in Comparison with Other Kinds of Reports from Weleda
Stakeholders’ Point of View (n=25) _______________________
Figure 49: Feeling of Being Addressed by Weleda’s SR (n=30) __________
Figure 50: The Interest of Weleda Stakeholders in Sustainability Report
(n=29)______________________________________________
Figure 51: Percentage of Weleda’s SR Read (n=27) __________________
Figure 52: Time Spent on Reading the Weleda’s SR (n=27) ____________
Figure 53: Structure/Theme Classification of Weleda’s SR (n=27)________
Figure 54: Language Style of Weleda’s SR (n=27) ____________________
Figure 55: Font Type and Size in Weleda’ SR (n=27)__________________
Figure 56: Length of the Weleda’s SR (n=27) ________________________
Figure 57: Favoured Amount of Pages of Weleda’s SR (n=19) __________
Figure 58: Readability of Weleda’s SR (n=27) _______________________
Figure 59: Design and Colour of Weleda’s SR (n=27) _________________
Figure 60: Reading Enjoyment of Weleda’s SR (n=27)_________________
Figure 61: Distribution of the Weleda’s SR (n=30) ____________________
Figure 62: Percentage of the Environmental Issues Found in Weleda’s SR
(n=26)______________________________________________
Figure 63: Expected Environmental Issues Found in Weleda’s SR (n=26) _
Figure 64: Missing or Poorly Presented Environmental Issues in Weleda’s
SR (n=26)___________________________________________
Figure 65: Percentage of the Social Issues Found in Weleda’s SR (n=22) _
Figure 66: Expected Social Issues Found in Weleda’s SR (n=22) ________
Figure 67: Missing or Poorly Presented Social Issues in Weleda’s SR
(n=22)______________________________________________
Figure 68: Percentage of the Economic Issues Found in Weleda’s SR
(n=17)______________________________________________

143
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145
147
149
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159
161
177
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182
183
185
186
186
187
188
189
190
190
191
192
193
195
196
197
198
199
200
201

vii
Figure 69: Expected Economic Issues Found in Weleda’s SR (n=17) _____ 201
Figure 70: Missing or Poorly Presented Economic Issues in Weleda’s SR
(n=17)______________________________________________ 202
Figure 71: Reliability of Weleda’s SR (n=30)_________________________ 203
Figure 72: Improving the Reliability of Weleda’s SR and Making it Look
More Interesting (n=26) ________________________________ 205
Figure 73: Comparison with the Previous Weleda’s SR (n=27) __________ 207
Figure 74: Stakeholders’ Understanding of Weleda and Its Activities (n=27) 208
Figure 75: The Interrelation of the Communication Components of Weleda’s
Sustainability Reporting ________________________________ 214

List of Tables
Table 1: Stakeholder Demands and Contributions to Business Success ____ 13
Table 2: Content Matrix of the SR Guidelines _________________________ 52
Table 3: Step Models of Communication Effects with a Sustainability Report 67
Table 4: Questions of the Stakeholder Interviews______________________ 77
Table 5: Types of Interviews ______________________________________ 94
Table 6: Corporate Stakeholders of the Deutsche Telekom AG __________ 110
Table 7: Contents of the Deutsche Telekom’s SR “Future-driven: The 2003
Human Resources and Sustainability Report”_______________ 113
Table 8: Stakeholders’ Trust in Deutsche Telekom (n=31) ______________ 120
Table 9: The Corporate Image of Deutsche Telekom according to Each
Stakeholder Group (n=31) ______________________________ 153
Table 10: Comparison between ‘Stakeholders’ Trust in the Company’ and
‘Corporate Image’ of Deutsche Telekom ___________________ 154
Table 11: Contingency Coefficient Table of the Relation between ‘Length
of the Report’ and ‘Percentage Read’ of Deutsche Telekom’s SR
(n = 31)_____________________________________________ 158
Table 12: Corporate Stakeholders of Weleda AG _____________________ 169
Table 13: Contents of the Weleda’s SR ‘Transparenz 3’________________ 172
Table 14: Stakeholder Trust in Weleda (n=30) _______________________ 178
Table 15: The Corporate Image of Weleda According to Each Stakeholder
Group (n=27) ________________________________________ 209
Table 16: Comparison between ‘Stakeholders’ Trust in the Company’ and
‘Corporate Image’ of Weleda ____________________________ 210

viii

Abstract
The discussions and debates in the field of sustainability management point out
that communication and transparency play an important role in demonstrating
corporate responsibilities to the society. Furthermore, communication and
transparency are not only considered as corporate responsibility towards the
stakeholders, but communication and transparency are also considered to have
a large role in building business competitiveness.
One corporate communication instrument which is now gaining its popularity is
the sustainability reporting. Pressures to corporation in particular multinational
and medium-sized enterprise are coming from their stakeholders who demand
transparency and require information about the corporate activities in all aspects
of sustainability. Despite all discussions and developed guidelines for sustainability reporting, e.g. Guidelines from the Global Reporting Initiative (GRI), Corporate Social Responsibility (CSR), Institute of Ecological Economy Research/Institute of Market Environment and Society (IÖW/imug), and World
Business Council for Sustainable Development (WBCSD), the next question
arises: is sustainability reporting an effective communication instrument bet-

ween a corporation and its stakeholders?
The study at hand is an attempt to explore the effectiveness of corporate sustainability reporting as a communication instrument between a corporation and
its stakeholders. The case studies were conducted with the Deutsche Telekom
AG and Weleda AG – two pioneers of German industries in sustainability performances, who have been actively producing and publishing sustainability reports since years ago. The selection of Deutsche Telekom and Weleda is not
designated to make a comparison between these two corporations but rather
two have two representative studies from two different company sectors in
Germany to see how effective can the sustainability report function as communication instrument.
In exploring the effectiveness of sustainability reporting as a communication
instrument, the step models of communication effects (i.e. Bruhn 2003, KotlerBliemel 2001, Meffert 2000, Beger et al. 1989, Kroeber-Riel 1986) and the
model of communication with a sustainability report based on the two-sided
communication model (i.e. Naschold 1973, Aufermann 1973, Merten 1977,
Bentele 1984, Linke et al. 1996) were developed. The telephone interviews
were conducted with 8 managers and 44 stakeholders of Telekom and 5
managers and 48 stakeholders of Weleda during September 2003 and January
2004 to find out how the communication with the SR in both companies work –
how the managers’ understanding about the sustainability report and the
stakeholders and how the stakeholders’ understanding and acceptance of the
sustainability report and the company correlate to each other.

ix
Using the two-sided communication model it can be found out that there were
many differences between the understanding of the company about the stakeholders and the understanding of the stakeholders about the company, and also
between the understanding of the company about the sustainability report and
the understanding of the stakeholders about the sustainability report such as:
•

Part of the stakeholders did not know the company that good and did
not feel as the right addressee of the report. The degree of stakeholder
trust in the company varied also.

•

According to the managers, sustainability report is important and has
definitely more values, but part of the stakeholders did not even familiar
and understood what sustainability report is. They did not know the
function of sustainability report. Not all of them believed that sustainability report has more values than other reports and the interest in
sustainability report was also not found in each stakeholder.

•

The managers have tried their best in fulfilling the desires and information needs of the stakeholders. Unfortunately, not all stakeholders read
the report made by the company. Only a small amount of respondents
who get in touch with the report, read the report completely. Part of the
stakeholders could not understand the report contents easily. The
stakeholders meant that the report could not completely satisfy the desires and information needs of each stakeholder and the degree of report‘s reliability varied.

These findings show that the sustainability report has not functioned effectively
as a communication instrument between a company and its stakeholders. Several things hindered the effectiveness of sustainability report as communication
instrument between a company and its stakeholders. The research results point
out that the main problem lies not on the report itself but the main problem lies
on the reception of the report. Some reasons are for example the stakeholders
did not feel as addressee of the report, not all stakeholders have a high interest
in sustainability report so that they read the report only because of the upcoming
interview, and what is pretty sad to find is that only a very small amount of
stakeholders read the report completely.
Thus, besides the report appearance and contents, the matter of reception of
the report must be seriously handled by the company, because it does not matter how good and how beautiful the company makes its sustainability report or in
other words even if the appearance and contents of the report fulfils 100% the
desires and preferences of the stakeholders, these will bring no communication
effect whatsoever if the sustainability report is not even read by the stakeholders.

x

Zusammenfassung
Die vorgelegte Studie versucht, die Effektivität von Nachhaltigkeitsberichten als
Kommunikationsinstrument zwischen Unternehmen und deren Stakeholdern zu
erforschen. Die Fallstudien wurden in Zusammenarbeit mit der Deutschen Telekom AG und der Weleda AG durchgeführt – zwei Unternehmen, die zu den Vorreitern bezüglich nachhaltiger Unternehmensführung zählen und seit Jahren
aktiv die Herstellung und Veröffentlichung von Nachhaltigkeitsberichte betreiben. Die Auswahl der zwei Unternehmen hatte nicht den Zweck, einen Unternehmensvergleich durchzuführen, sondern zwei repräsentative Studien zu zwei
unterschiedlichen Industriebereichen in Deutschland vorzulegen.
Die Beurteilung der Effektivität des Nachhaltigkeitsberichtes als Kommunikationsinstrument basiert dabei auf dem sog. „Stufen-Modell der Kommunikationswirkung“ (i.e. Bruhn 2003, Kotler-Bliemel 2001, Meffert 2000, Beger et al.
1989, Kroeber-Riel 1986) und dem Modell der „Zweiseitigen Kommunikation“
(i.e. Naschold 1973, Aufermann 1973, Merten 1977, Bentele 1984, Linke et al.
1996).
Für den empirischen Teil der Untersuchung wurde eine telefonische Befragung
mit 8 Managern und 44 Stakeholdern von Telekom und 5 Managern und 48
Stakeholdern von Weleda im September 2003 und Januar 2004 durchgeführt;
Ziel der Befragung war es, Ablauf und Funktion der Kommunikation mittels
Nachhaltigkeitsbericht in den zwei Unternehmen darzustellen und zu analysieren, Erwartungen und Kommunikationsziele seitens des Managements und der
Stakeholder zu ermitteln und zu kontrastieren sowie zu untersuchen, in wieweit
die Wirksamkeit von Nachhaltigkeitsbericht im Kreis der Stakeholder mit der
Akzeptanz des Unternehmens korreliert ist.
Vor dem Hintergrund des „Zweiseitigen Kommunikationsmodells“ konnte aufgezeigt werden, dass es gravierende Unterschiede zwischen der Wahrnehmung
der Stakeholder seitens des Unternehmens und der Wahrnehmung des Unternehmens seitens der Stakeholder über das Unternehmen gibt, dass Selbst—und
Fremdwahrnehmung des Unternehmens auseinanderklaffen und dass Nachhaltigkeitsbericht unterschiedlich wahrgenommen werden:
•

Ein Teil der Stakeholder kannte das Unternehmen nicht besonders gut
und fühlte sich nicht als richtiger Adressat des Berichtes. Auch der Grad
des Stakeholdervertrauens gegenüber dem Unternehmen variierte.

•

In der Wahrnehmung der Managern spielen Nachhaltigkeitsberichte
eine sehr wichtige Rolle und die Erwartungen an ihre Wirkung sind
dementsprechend hoch - ein großer Teil der Stakeholder waren jedoch
mit dem Instrument „Nachhaltigkeitsbericht“ nicht vertraut und hatten

xi
zudem Verständnisprobleme. Nicht alle Stakeholder waren mithin davon überzeugt, dass Nachhaltigkeitsberichte besonderen Wert besitzen
und zeigten kein gesteigertes Interesse an ihrer Lektüre.
•

Die Manager haben große Aufmerksamkeit darauf gelegt, die Wünsche
und Informationsbedürfnisse der Stakeholder zu erfüllen; dennoch hat
nur ein kleiner Teil der Ansprechpartner, der mit dem Bericht in Berührung kam, den Bericht vollständig gelesen. Ein Teil der Stakeholder
konnte den Berichtsinhalt nicht problemlos verstehen. Die Stakeholder
waren nur selten der Auffassung, dass der Bericht die eigenen Wünsche und Informationsbedürfnisse vollständig erfüllt und dass die dargestellten Inhalte stets vertrauenswürdig sind.

Diese Befunde zeigen, dass die Effektivität von Nachhaltigkeitsberichten als
Kommunikationsinstrument zwischen Unternehmen und dessen Stakeholdern
deutlich verbesserbar ist. Einige Punkte haben die Effektivität des Nachhaltigkeitsberichtes als Kommunikationsinstrument zwischen einem Unternehmen
und dessen Stakeholdern gemindert. Die Untersuchungsergebnisse weisen
jedoch darauf hin, dass das Hauptproblem nicht in der Gestaltung des Berichtes
selbst liegt, sondern mit der mangelnden oder fehlenden Rezeption des Berichtes zu tun hat: Stakeholders fühlten sich oft nicht als Adressat des Berichtes,
nicht alle Stakeholder sind mit dem Instrument „Nachhaltigkeitsbericht“ vertraut
und reagieren mit Desinteresse (und lasen im Rahmen der empirischen Untersuchung den Bericht nur wegen des bevorstehenden Interviews).
Das Problem der mangelnden oder fehlenden Rezeption des Berichtes muss
von dem Unternehmen ernsthaft angegangen werden, möchte man die Möglichkeiten der Nachhaltigkeitsberichterstattung im Sinne einer effektiven Public
Relation ausschöpfen. Auch wenn das Auftreten und der Inhalt des Berichts
100-prozentig die Wünsche und Bedürfnisse der Stakeholder erfüllen, wird dies
keinerlei Kommunikationswirkung erbringen, wenn der Nachhaltigkeitsbericht
nicht einmal von den Stakeholdern gelesen wird.

Introduction

1

INTRODUCTION

1.1

Research Background

1

Since the Rio-Conference in 1992 corporations are increasingly challenged to
constructively deal with the vision of sustainability and to contribute to it. A
number of programmes and approaches were developed at different company
levels. Internally, at the management or organisational level, as well as externally, with respect to the relationship between the company and society. All
these programmes and approaches highlight a greater sense of responsibility of
the companies with regard to sustainable development. In other words, it is the
company’s responsibility towards society.
The issue of social responsibility has been discussed in various fields of the
social science, business administration and management theory, for example,
1
regarding the concept of corporate ethics . Apart from the rather theoretical
debate on corporate ethics in the management science, several practical approaches to management are also discussed. For example, the implementation
of new approaches in the field of environmental management (ISO 14001 and
2
EMAS) at the organisational level, which has been internationally discussed
3
since 1993 . A completely different approach is a sustainability programme,
which focuses on the products (IPP, Product Stewardship)4.
Furthermore, comprehensive international and policy-oriented approaches
which concentrate on the relationship between the company and society are of
growing importance. Approaches which are based on the idea of ‘Corporate
Governance’5, ‘Corporate Social Responsibility (CSR)’6 or ‘Corporate Citizenship’7 are often discussed separately, but at least when discussing the relation8
ship between the company and society, they seem to possess common origins .
Corporate governance deals with management in a narrow sense, for example
with leadership and the control of a company. Various other concepts suggest
that the definition of concrete company goals and policies leads to a balancing
Cf. e.g. as overview Beschorner et al. 2004, Leisinger 1997.
See ISO 1996, EMAS 2001.
3 See e.g. BMU 1999, Rubik 2004, 2003, 2002, Rubik and Teichert 1997.
4 See e.g. Rubik 2003.
5 Cf. e.g. Theisen 2003, Witt 2000.
6 Cf. e.g. Commission of the European Communities 2001:6, 2002:5, Witt 2000, Theisen 2003.
7 Whereby Schrader (2003:64-67) emphasises, that in literature the distinction between Corporate
Social Responsibility and Corporate Citizenship is not clear at all.
8 Pfriem 2004.
1
2

2

Introduction

of the different interests of the company’s stakeholders’, mostly of the shareholders, lenders, employees and the management 9. The concepts of ‘Corporate
Social Responsibility’ (CSR) or ‘Corporate Citizenship’ are based on a similar
idea. The concept of CSR highlights the aspect of responsibility, but, without
accentuating the company’s role in modern society. On the contrary, according
to the Corporate Citizenship concept the company plays a central role in civil
society, which is already indicated by the term Corporate Citizenship itself. In
this view, the company has rights, which it can claim, but it must also fulfil its
10
obligations, so that a community may function . Herewith, the company has its
part in the social control; an approach that goes beyond the classical microeconomic schemes “in which product efficiency dominated and communication
11
intelligence was of peripheral importance” .
Based on the analysis of the theoretical and practical discussions of the approaches to corporate sustainability management, it may be concluded that both
the essentials of the company’s sustainability management system and the
sustainability communication system are important. However, summarising the
above examples, it seems that communication within the company and between
the company and society receives a clearly stronger value as a new-art management task. In this context, communication becomes an important instrument
of sustainability management. For this, a row of normative rules are developed,
12
which can be found in the guidelines for corporate communication (GRI) .
Moreover, the Global Compact was established as the first global forum to address critical issues related to globalisation. It calls on companies to adopt the
nine universal principles of human rights, labour standards and the environ13
ment . As a result the research will focus on the corporate communication dealing with issues of sustainability.

Sustainability communication can be described as an open and comprehensive
dialogue with internal and external stakeholders on the company’s performance
and activities, as well as their effects14. It is primarily a matter of demonstrating
the company’s responsibility towards society and improving the company’s
reputation through its willingness to communicate and transparency. This
‘communication factor’ is essential for the corporation in winning a competitive
15
advantage . For example Davies (2003), Schönborn (2001), and Bruhn (1995)
highlight that the implementation of communication instruments enables the
Witt 2000:159.
Schrader 2003:9ff (See also Matten and Crane 2004).
11 Pfriem 2004.
12 See GRI 2000, 2002a, 2002b (See also http://www.globalreporting.org), PricewaterhouseCoopers
2001.
13 Global Compact Office-UN 2001 (See also http://www.unglobalcompact.org).
14 Hardtke and Prehn 2001:216.
15 Bruhn 1995:2.
9

10

Introduction

3

company to create a positive image or reputation in the eyes of the actual and
potential customers and other stakeholder groups. Additionally, the company is
able to differentiate itself from the others16.
This could be the reason, why a growing number of business leaders are acknowledging the power of long-term, positive stakeholder relationships. John
Browne, CEO of British Petroleum talked about the importance of building mutually beneficial stakeholder relationships in a Harvard Business Review article
(September/October 1997). He wrote,

“You can’t create an enduring business by viewing relationships as
a bazaar activity – in which I try to get the best of you and you of me
– or in which you pass off as much risk as you can to the other guy.
Rather, we must view relationships as a coming together that allows us to do something no other two parties could do – something
that makes the pie bigger and is to your advantage and to my advantage” 17
It seems clear that nowadays communication is one of the key factors and a
portal for achieving business success18. Disregarding the importance of
communication will decrease stakeholders’ trust in the company which most
19
probably leads to a negative impact on the financial success .
One corporate communication instrument which is now gaining its popularity is
the so-called sustainability reporting. Sustainability reporting is the action of
producing and publishing a sustainability report (SR).
According to the World Business Council for Sustainable Development
(WBCSD) (2003), at present key stakeholders, such as employees,
shareholders, suppliers and customers exert increasing pressure on the companies to be transparent about their values, principles and performances with
20
regard to sustainable development .
Dr. Erich Becker, President of the Austrian Business Council for Sustainable
Development (ABCSD) stated that a sustainable corporation, which enters a
trustworthy dialogue with its environment, recognises warning signals at an
early stage and can thus avoid risks and use opportunities. It was also pointed
out that reliable external communication is evidence of the corporation’s ability
to survive21. A study published by ‘Kommunalkredit Austria’ (Communal Credit
Austria) in 2003 dealing with the success of 170 companies quoted on the stock
Bruhn 1995:2, Davies et al. 2003::xi, Schönborn and Steinert 2001:VI.
Prokesch 1997:154, Svendsen 1998:2.
18 Bruhn 1995:2, Kim 2003:1, Schönborn and Steinert 2001:VI.
19 Davies et al. 2003:201, Münderlein 2002:100.
20 WBCSD 2002:3.
21 Becker 2002:6 (http://www.nachhaltigkeit.at/reportagen.php3id=22).

16

17

4

Introduction

exchange, which are also members of the World Business Council for Sustainable Development, concluded: “Companies that have prescribed itself with the

concept of sustainable business show an entirely better performance than the
total market”22. The superiority of a company that implements sustainability
management and communication is also reflected in the Dow Jones Sustainability Index (DJSI). A comparison between the Dow Jones Global Index (DJGI)
and the DJSI between January 1997 and April 2002 also showed that the Sus23
tainability Index significantly outperformed the former .
So, nowadays, it is realised that sustainability reporting is an essential condition
for success in business. Sustainability reporting is becoming a worldwide trend
and every corporation or organisation wants to join in and does not want to be
left behind. Also, in Germany all sectors take the matter of sustainability reporting seriously. The Federation of German Industry (BDI) established a ‘Forum for
Sustainable Development (Econsense)’ in July 2000 to agree on a common
sustainability concept and its integration into their business strategies. The fo24
rum is designed to offer a platform for stakeholder dialogues . In April 2001, the
German government established the ‘German Council for Sustainable Development’ (RNE) to promote sustainability as an issue of public discussions and
to support the German government in all matters of sustainability (including
25
sustainability reporting) . Around the world many studies were conducted to
26
discuss and develop guidelines for sustainability reporting .
This unique challenge and opportunity of sustainability reporting is indeed recognised by academicians, politicians and practitioners. But, unfortunately the
matter of how to make use of sustainability reporting effectively has hardly been
explored yet.
Kanatschnig et al. 2003:5.
Schönborn and Steinert 2001:5, WBCSD 2002:9.
24 Econsense (http://www.econsense.de/eng/mitglieder.htm).
25 Office of the German Council for Sustainable Development (RNE)
(http://www.nachhaltigkeitsrat.de/council/index.html).
26 Relevant research on sustainability reporting : (a) studies on the Guideline for sustainability
reporting from the Global Reporting Initiative/GRI (GRI 2000, 2002a, 2002b), Institute for
Ecological Economy Research Berlin/IÖW & Institute for Market-Environment-Society
Hannover/imug (Clausen et al. 2001a), Corporate Social Responsibility/CSR (CSR 2000),
Austrian Business Council for Sustainable Development (Kanatschnig et al. 2003) (b)
studies on preparing assistance tools to pursue sustainability from the Institute for Energy and
Environment/ifeu Heidelberg (Frings 2003), Deloitte Tohmatsu (Lehni and Pedersen
2002) (c) studies on ranking of companies sustainability reports from the SustainAbility Ltd.
(SustainAbility/UNEP 2003) (d) studies on defining stakeholder groups for sustainability report
from Hoppe and Ferdinand (Hoppe and Ferdinand 2002), Kim (Kim 2003) (e) studies on
international survey about stakeholders’ preferences on sustainability report from the ECC Kohtes
Klewes GmbH (ECC Kohtes Klewes 2002) and ECC Kohtes Klewes GmbH and
Fishburn Hedges Ltd. (ECC Kohtes Klewes and Fishburn Hedges 2003).
22
23

Introduction

1.2

5

Research Goal and Questions

This study aims to explore the effectiveness27 of sustainability reporting as a
communication instrument between a corporation and its stakeholders. It attempts to investigate if sustainability reporting affects the company image.
By means of empirical research, the following research questions will be dealt
with28:
1. The stakeholders as the message receivers of the SR: Is the SR received by the intended stakeholders?
2. The stakeholders’ willingness to read the SR: Do the variables ‘interest
in SR’, ‘trust in the company’, and ‘feeling of being an addressee of the
report’ play an important role in prompting stakeholders to read the SR?
3. The readability of the SR: Do the stakeholders understand the information in the sustainability report? Does the structure of the report play an
important role in making the report easy to read?
4. The contents of the SR (Relevance of the information to the needs and
desires of stakeholders): Do the contents of SR meet the information
needs of stakeholders with regard to the environmental, social and economic dimension? Which sustainability dimension do the stakeholders
mainly expect? What are the variables that influence the ‘reading enjoyment’ of the SR?
5. The trustworthiness of the information in the SR (reliability): Do the
stakeholders trust the information in the report?
6. Communication effects of the SR (Effects of SR on the company image
and the stakeholders’ behaviour towards the company): Is SR an effective communication instrument to improve or maintain the company
image? Is SR an effective communication instrument to maintain the
relationships between the company and its stakeholders? Does the
communication with an SR have different effects on the various stakeholder groups? If yes, which stakeholder group is affected most by the
SR in relation to the company image?

The term ‘communication effectiveness’ was defined by Bruhn 2003:389, Farace et al. 1992, QMLexikon (http://www.quality.de/lexikon/wirksamkeit.htm).
28 The research questions are partially adapted from the “Qualitative characteristics of Information
Quality” from Schaltegger 1997:89-95 and the “The Criteria of Good Communication” from Steidl
and Emery 1997:76.
27

6

Introduction

1.3

Research Approach

This study adopts an explorative research approach based on empirical analyses and focuses on corporate communication by means of a special communication instrument, the ‘sustainability report’. The effectiveness of sustainability
reporting as a communication instrument between a company and its stakeholders will be analysed.
29

Explorative research also includes a theoretical framework . For this, a
comprehensive literature study is required. Accordingly, the study starts with the
theoretical part, in which a heuristic analytical framework for analysing the effectiveness of sustainability reporting as a communication instrument between a
corporation and its stakeholders will be developed. A communication model and
step by step models of communication effects are developed and serve as a
basis for the heuristic approach.
Heuristics often play an important role in solving problems, because in most
complex situations there is no algorithmic solution, as is the case in this study.
The heuristic approach can only point in a rough direction and does not gua30
rantee straightforward results .
Based on the research theme, the defined targets of this study, as well as the
heuristic approach, case studies will be conducted to illustrate the application of
the theoretical framework. The findings will be supported by statistical data.

1.4

Research Structure

Chapter 1 presents the research background, which describes the efforts of the
companies to act according to its responsibilities towards society. Furthermore,
it emphasises the importance of communication and transparency for the
achievement of business success. This is followed by a description of sustainability reporting which is a popular instrument used by corporations to communicate with their stakeholders. This chapter also presents the major research
goal of analysing the effectiveness of SR as a communication instrument to
improve or maintain corporate image, the research questions and the methodology.
Chapter 2 presents the research theoretical framework. It deals with the communication between a corporation and its stakeholders by means of a ‘sustain29
30

Cf. Bortz and Döring 2002, Schwaninger 1989.
Cf. Bortz and Döring 2002:360.

Introduction

7

ability report’. Thus, this chapter presents theories of corporate and relational
asset, stakeholders and stakeholder models, communication and corporate
communication, image and reputation, and sustainability report. The last part of
this chapter explains the approach to exploring sustainability report’s communication effectiveness, which is mostly based on communication and marketing
theories.
Chapter 3 presents the research methodology. It explains how the companies of
the case studies were selected and which managers and stakeholders served
as data sources. Additionally, the process of data collection, recording, evaluation and analysis including all the supporting theories is described.
The results of the case studies are presented in Chapter 4 and 5. In these
chapters, it is clarified: who participated in the sustainability reporting process,
how the communication process by means of an SR can be described, what the
motives for and goals of an SR are, what the expectations of the stakeholders
with regard to the SR are, which communication components of SR influence
the improvement or the maintenance of the corporate image, etc.. The interpretations of the research results are based on communication theories and will
also be dealt with in this chapter.
Finally, in Chapter 6 conclusions are drawn. The analysis of the sustainability
report’s effectiveness as a communication instrument between a corporation
and its stakeholders will be reviewed and certain answers to the research questions will be highlighted. Criticism and suggestions to optimise SR are also presented in this chapter. The research structure can be illustrated as follows:

8

Introduction

Figure 1: Research Structure
CHAPTER 1: INTRODUCTION

CHAPTER 2: THEORETICAL FRAMEWORK
Chapter 2.1: Corporation and Its Stakeholders
Chapter 2.2: Communication and Corporate Communication

Chapter 2.3: Sustainability Reporting
Chapter 2.4: Exploring the Effectiveness of Communication by means of a Sustainability Report

CHAPTER 3: METHODOLOGICAL FRAMEWORK FOR THE CASE STUDIES
Chapter 3.1: Collection of Social Data
Chapter 3.2: Recording of Social Data

Chapter 3.3: Evaluation and Analysis of Social Data

CHAPTER 4: RESULTS AND
DISCUSSIONS OF CASE STUDY 1:
SUSTAINABILITY REPORTING AT
DEUTSCHE TELEKOM AG

CHAPTER 5: RESULTS AND
DISCUSSIONS OF CASE STUDY 2:
SUSTAINABILITY REPORTING AT
WELEDA AG

Chapter 4.1: Deutsche Telekom AG

Chapter 5.1: Weleda AG

Chapter 4.2: The Effectiveness of
Telekom’s Sustainability Reporting

Chapter 5.2: The Effectiveness of
Weleda’s Sustainability Reporting

Chapter 4.3: The Interrelation of the
Communication Components of
Telekom’s Sustainability Report

Chapter 5.3: The Interrelations of the
Communication Components of Weleda’s
Sustainability Report

CHAPTER 6: SYNTHESIS, CONCLUSIONS AND RECOMMENDATIONS

Theoretical Framework

2

THEORETICAL FRAMEWORK

2.1

The Corporation and Its Stakeholders

9

The aim of this chapter is to present, first, the readers with an overview of the
company’s dependence on its stakeholders and, second, the importance of
relationships and trust between the company and its stakeholders to achieve the
company goals. Thus, the company goals, the stakeholder model, the benefits
of mutual relationships and the role of trust will be described.
In the next section, the role of the communication instrument ‘sustainability report’ is introduced. It will be examined how it influences the company image and
prompts the company and the stakeholders to enter a relationship. First of all,
an elaboration on communication will be presented, followed by explanations
dealing with the corporate communication, sustainability reporting and the
communication effects of the sustainability report on the company image.

2.1.1

Corporation

The current discussions on approaches regarding a sustainable management or
ethical management went away from traditionally sight of companies, by highlighting that corporation’s goal not only in the production and activity of some
kind of service or in profit attainment, but also in fulfilling the needs of the vari31
ous stakeholders . At their best, firms try to create wealth for their employees in
the form of compensations, working conditions, and career opportunities; for
their customers in the form of products and services, which benefit them; for
investors, either as shareholders or lenders; for suppliers, communities, and
32
governments .
Compared to less successful companies, wealthier firms can pay higher wages
and offer better career opportunities, take greater risks, provide greater customer benefits, respond better to adversity, provide more values for shareholders, and maintain better relationships with their stakeholders. They can also
increase their capacity to generate wealth in the future by reinvesting in their

Cf. Schaltegger and Sturm 1992:11 (See also e.g. Albach et al. 2000, Fandel et al. 2004, Casson
1996, Porter 1980, Sveiby 1997).
32 Post et al. 2002:35.

31

10

Theoretical Framework

business, launching new and innovative ventures, buying other companies, and
creating their own internal enterprises.
In regard to the Resource Based View33, Post et al (2002) and Sveiby (1997)
mentioned that a company could utilise the following three resources as capital
to create wealth34:
•

The market value of physical and financial assets or less liabilities
(tangible assets)

•

The value of individually separable intangible assets such as specific
human capital, patents and licences

•

The value of relational assets both internal and external, involving
stakeholder linkages, collaborations, processes and reputational factors
(relational assets may combine both tangible and intangible elements,
as in the case of collaborative R&D projects).

Scholars and practitioners in the field of management, strategic management
and marketing management are aware of the fact that there are sources of corporate value other than physical and financial assets. At the moment the
achievement of business success greatly depends on the contribution of relational assets35. This is also confirmed by KPMG Germany and the Stakeholder
Reporting GmbH (2002), who said