Social and Environmental Risk disclosure in Sustainability reporting. What does preliminary evidence suggest?

Recently, the new European Directive on non-financial disclosure, the American Sustainability Accounting Standard Board (SASB), the Global Reporting Initiative GRI G4 and the International Integrated Reporting Council (IIRC) have stressed the importance of extending the disclosure of ethical, social and environmental risks inside social and environmental reporting. Institutional pressure has been notably increased among organisations, especially those already recognized for their sustainability practice. Given such challenges, the reaction of corporations in providing additional sustainability risk disclosure shall be examined. Our study aims at addressing such issues from an exploratory perspective. We based our analysis on a sample of organisations that in accordance with the new GRI4 guidelines issued related disclosure in2015. The study examined the reports and provided a risk disclosure metric to be analysed against other relevant variables. Consistently with the recent literature, we found that sustainability leaders provide a significant volume of reporting and that the quality of risk disclosure is significantly influenced by their international presence and their sustainability reporting experience. However, if we consider specific risk related areas of disclosure, only few of them seems to consistently link strategy, measures and disclosure. Moreover, organisations that face high social and environmental risks because of their business sectors behave differently. In conclusion, we aim at demonstrating the level of sustainability reporting usefulness as an external tool for banks, investors, rating agencies, and all the stakeholder interested in those internal processes and mechanisms which can affect corporate performances against risk avoidance.