Sustainability Reporting in Service Companies: a Responsible Commitment or an Emerging Trend?

Abstract

With the increase in social concerns, companies are considering social reporting as an innovative and effective reporting tool that includes non-financial information. Social reporting has been receiving a lot of attention in academic and professional literature. Therefore, this study aims to examine the reasoning behind the adoption of a social reporting approach with a focus on service companies based in emerging countries. Based on a literature review and legitimacy theory, we attempt to define the underlying motivations behind CSR disclosure in service companies. The results show that meeting stakeholders ‘expectations, ensuring legitimacy, and improving financial, social, and environmental performance are the main factors influencing CSR reporting. The results also indicate that when examining the content of the CSR reports, little to no environmental information can be found. This finding confirms the need to introduce an appropriate framework that regulates social reporting practices in service companies operating in developing countries.