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Scoring Sustainability Reports using GRI indicators: A Study based on ISE and
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Article  in  Journal of Management Research · June 2014

DOI: 10.5296/jmr.v6i3.5333

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 Journal of Management Research
ISSN 1941-899X
2014, Vol. 6, No. 3

Scoring Sustainability Reports using GRI indicators: A

Study based on ISE and FTSE4Good Price Indexes
Hong Yuh Ching (Corresponding author)
Business Department, Centro Universitário da FEI (Brazil)
Av. Humberto de Alencar Castelo Branco, 3972, São Bernardo do Campo, 09850-901, Brazil
Tel: 55-11-4353 2900 E-mail: [email protected]

Fábio Gerab
Mathematics Department, Centro Universitário da FEI (Brazil)
Tel: 55-11-4353 2900 E-mail: [email protected]

Thiago Henrique Toste

Research Student, Centro Universitário da FEI (Brazil)
Tel: 55-11-4353 2900 E-mail: [email protected]

Received: March 21, 2014 Accepted: May 4, 2014 Published: July 1, 2014
doi:10.5296/jmr.v6i3.5333 URL: http://dx.doi.org/10.5296/jmr.v6i3.5333

Abstract
The objective of this research is to verify the level of adherence to the GRI indicators that
Brazilian companies listed in ISE and those listed in FTSE4Good are using in their 2011
sustainability reports and what are the differences between these two groups. The research
design combines both quantitative and qualitative methods. The target population consists of
70 companies, 35 from ISE and 35 from FTSE4Good. Content analysis was used to analyze
the indicators disclosed in the reports and the information presented was classified in three
categories of scoring according to its level of disclosure. On average, ISE companies scored
0,5867 and FTSE4Good scored 0,4451. The best company scored 0,924 and the worst of 70
companies scored 0,105. Overall, our statistical results show that ISE companies are more
adherent to the GRI indicators than FTSE4Good companies, mainly in the economic and
social dimensions. Yet, the companies spay similar attention in all 3 dimensions, regardless of
economic sector and index. We can say that good sustainability reports showing deeper

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sustainability concerns and business practices related are acting accordingly to the
Stakeholder and Legitimacy theories, regardless of their level of adherence to GRI
Keywords: Sustainability reports, ISE, FTSE4Good, GRI guidelines, Sustainability
dimensions

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1. Introduction
Sustainability issues are being broadly integrated in different organizational functions and
being seen as an important performance assessment. Additionally to financial information,
sustainability has been introduced as a reporting subject for companies worldwide in the last
few years, addressing the goal of creating a sustainable economy, environment and society.
Companies that wish to build a sustainable image are keener on adopting the common
practice of elaborating sustainability reports. According to Aktas, Kayalidere and Kargin
(2013), reporting sustainability is a key process to inform stakeholders whether the firm is
achieving sustainable growth and value for their interest. Stubbs, Higgins and Milne
findings (2012) suggest that the route to encouraging greater and better quality uptake of
sustainability reporting rests on stakeholders exerting pressure for better and more detailed
disclosure from business firms. Although companies rate their performance on
communication highly, efforts regarding formal reporting are less advanced. Just 22% of
Economist Intelligence Unit EIU (2008) survey respondents issue formal reports on their
environmental and social impact and performance, along with their financial performance
(the so-called Triple Bottom Line). Others are preparing to do so: 40% expect to publish such
documents in the next five years. The other 38% have no plans to, although this does not
mean that they are not monitoring these issues.
Corporate sustainability increases market value on the long run, which means that the efforts
of taking sustainability into the company strategy seem valuable (Lo and Sheu, 2007). The
use of a standard framework for reporting is essentially important for investors, as they get to
analyze the reports and compare companies. A standard framework eliminates the risk of
uncertainty in measuring different sorts of information (CERES, 2010). Following the same
thinking, Isarksson and Staimle (2009) state that reporting guidelines become necessary, since
transparency is essential to satisfy and reassure customers and stakeholders expectations with
those reports.
The effort to develop guidelines to report and measure sustainability was assessed by some
organizations such as Federation des Experts Comptables Europeens FEE (1998), focused on
environmental accounting guidance procedures, Public Environmental Reporting Initiative
Guidelines PERI (1993), issuing reporting guidelines to help organizations in improving
environmental reporting and UNEP-SustainAbility (2000), a scoring system based on 50
topics. The International Integrated Reporting Council IIRC (2013) released its framework
recently, offering a set of guidelines to more deeply integrate sustainability into corporate
objectives and to holistically account for the value businesses create. Integrated reporting is
on its way to becoming the new norm for reporting.
Over time, the reporting guideline that emerged as the dominant framework is the Global
Reporting Initiative (GRI). The GRI guidelines are being used by most companies around the
world to develop their sustainability reports (Davys and Searcy, 2010). The GRI is the most
relevant institution in the sustainability reporting context. GRI hosted in September 2013 in
their website 5605 organizations’ profile and 14950 sustainability reports of which 14059 are
based on GRI framework (data extracted from their website).

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Companies that integrate sustainability in their core business practices and view the subject
as an essential long-term performance factor are on radar of investors (KPMG, 2011).
Investors’ belief that strategies taking sustainability criteria into account have the capacity to
create long-term value led to the appearance of sustainability-related indexes linked to
financial markets (López et al, 2007). The Dow Jones Sustainability Index (DJSI) was the
pioneer in gathering sustainable companies into a unified index, but other stock exchanges,
such as Financial Times (in UK) and BM&FBovespa (in Brazil), have already separate price
indexes. Many of these companies make use of sustainability reports as a tool to measure
their own performance on the subject (Caron & Turcotte, 2009).
The objective of this research is to verify the level of adherence to the GRI indicators that
Brazilian companies listed in ISE and those listed in FTSE4Good Global Index are using in
their 2011 sustainability reports and what are the differences between these two groups. ISE
Indice de Sustentabilidade Empresarial is the sustainability related price index at
BM&FBovespa (Brazilian stock exchange) while FTSE4Good Global Index is part of
London Stock Exchange FTSE4Good Index series. Both indexes are a good tool for asset
owners, investment banks when assessing responsible investment companies.
We test hypotheses relating to whether significant differences exist in the level of adherence
to the GRI indicators of companies included in ISE and those in FTSE4Good (hereby
identified to as the benchmark sample). They are:
H1 – Reports of companies listed in the FTSE4Good Global Index are more adherent to GRI
indicators than those of companies listed in ISE for the economic dimension.
H2 - Reports of companies listed in the FTSE4Good Global Index are more adherent to GRI
indicators than those of companies listed in ISE for the environmental aspect.
H3 - Reports of companies listed in the FTSE4Good Global Index are more adherent to GRI
indicators than those of companies listed in ISE for the social dimension.
H4 – The level of adherence to the GRI indicators is equivalent for every sustainability
dimension within companies of the same index.
The assumption behind the first three hypotheses lies on the fact that FTSE4Good is a more
experienced index than ISE (the first was created in 2001, while the latter in 2005) and is
associated to a stock exchange with more expressive values when compared to
BM&FBovespa, both in terms of market capitalization (US$ 15,89 trillion versus US$ 0,50
trillion approximately as of December, 31, 2013) as number of companies listed (729 versus
38).
The remainder of the paper is organized into four other main sections. The next section is the
literature review on studies regarding sustainability and sustainability reports. Methodology
and data collection are presented, providing the context necessary for the following section,
which presents the discussion of the results and compares them with the ones found in the
literature. Finally, the paper finishes with a brief conclusion that summarizes the objectives
and findings of this study.

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Our contribution to the sustainability literature is twofold: a) we measure how well corporate
sustainability reports from listed companies in two sustainability-related price indexes do
regarding the reporting of GRI indicators; b) we demonstrate whether there are differences in
sustainability reports comprehensiveness between the three sustainability dimensions and
also between four economic sectors.
2. Literature review
There is a widely recognized need for individuals, organizations and societies to find tools for
assessing the extent to which current activities are unsustainable (Singh et al, 2009). The
sustainability report is one of these tools (Caron & Turcotte, 2009). This trend has been
analyzed under the scope of two theories, the Legitimacy theory and the Stakeholder theory.
The Legitimacy theory states that, in order to maintain its business activities, companies need
to behave as to what is expected from society (O’Donovan, 2002). The need to legitimate its
actions drive companies into making sustainability reports, as the information disclosed in
these documents is important to change society’s perception towards the company (Deegan,
2002). Cho and Patten (2007) also support the argument that companies use disclosure as a
legitimizing tool.
The stakeholder theory presumes that the values of the companies are an important factor as
how they do business, so they need to explicitly alert its stakeholders of those values in order
to build a meaningful relationship between them (Freeman et al, 2004). Under that scope,
Gray et al (1996) say that companies use the sustainability report to shape stakeholders
opinions in a positive way, opening doors for them to keep conducting their business
activities. Konar and Cohen (2001) state that major companies tend to voluntarily comply
with environmental regulations and externally portray an image of being environmentally
concerned, being rewarded in the marketplace for taking these actions.
Hedberg and Malmborg (2003) have found, in their empirical evidence from Swedish
companies, that they produce corporate sustainability reports to seek organizational
legitimacy. They were particularly interested in reporting their environmental and
ethical/social statistics to their financiers. Roca and Searcy (2012) identified a wide variety
by theme and sector in the indicators disclosed, which they link to the Legitimacy theory,
stating companies’ disclosure practices aim to maintain its legitimacy. They also identified
that all TBL dimensions were disclosed with relatively equal frequency.
This legitimacy issue was also covered in Stubbs et al study (2012). The drivers for
sustainability report differ for the very largest firms. They would see it contributing to
reputation, corporate image, competitive advantage and credibility, some want to be listed on
the sustainability indexes. Despite studies pointing to legitimacy as a key motivating driver,
the firms in their sample do not experience sustained, societal and stakeholder pressure about
their social/environmental performance, nor are there stakeholder demands for information
about their performance. Perhaps legitimacy is something relevant to only the very largest
firms, or is something that is no longer perceived as being obtainable through extended
disclosure and sustainability reporting.
Regardless what drives companies to produce sustainability reports and the fact that they are

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not a mandatory report in most countries, these documents are being integrated in the culture
of big companies over time (Sridhar, 2012). In fact, the ability to build a performance
appraisal system and information management system that provides information about the
balance of social, environmental and financial information is essential to maintain the
company’s culture of sustainability (Rahardjo et al, 2013).
Despite there are various international efforts to measure sustainability, few of them have an
approach taking into account environmental, economic and social aspects (Singh et al, 2009),
as it is the case of Global Reporting Initiative (GRI).
Considering that companies from the same economic sectors would be more likely to report
the same indicators when using the GRI framework in their reports, Sherman and Diguilio
(2010) analyzed the reports from 2008-2009 of eight big companies. They found that
companies, even the ones classified as Application Level A, do not disclose the same
indicators, leaving a wide range of discrepancy between the indicators reported. Sampaio et
al (2012) also tried to identify some kind of isomorphic process in the reports of mining
companies between 2005 and 2009, concluding that no such process occurred, even when
companies used the GRI guidelines. On a similar approach, Wang and Huang (2010)
analyzed the reports of 116 Chinese companies from 2002-2008 and found that the content
reported continued to diverge over the years.
Tiong and Ananthamaran (2011) drew attention to the fact that, apart from the low disclosure
levels, even Application Level A companies didn’t justify the omitted indicators, which is
recommended on the GRI guidelines. Analyzing quantity and quality levels of the reports
from six Brazilian companies classified as Application Level A+, Leite Filho et al (2009)
identified no traces of a good level of disclosure to justify such Application Level whatsoever.
Adding to that, Aktas et al (2013) concluded that GRI’s indicators are inconsistent within
companies stating the same Application Level.
The major similarity between these studies is that all the companies don’t seem to follow the
guidelines proposed. Application Level A companies would be expected to have a higher
level of commitment to the guidelines, which is not apparent in the analyzed reports.
Ching et al (2013) compared the sustainability reports of companies listed on ISE to those of
listed in Novo Mercado NM (Brazilian price index of companies with the highest level of
corporate governance practices). ISE companies tend to disclose more information in a more
adequate way than NM and that all the three TBL aspects are addressed with same quality
level.
Morhardt, Baird and Freeman (2002) evaluated the extent to which corporate environmental
reports meet the requirement of GRI 2000 guidelines and ISO 14031 performance evaluation
standard. They assigned scores to each topic of the guidelines as 0, not mentioned; 1,
anecdotal or briefly mentioned; 2, more detail, but characterizing only selected facilities or
using only self-comparison metrics; 3, company-wide absolute or relative metrics that could
be compared with other companies. They selected the 1999 reports of 40 of the largest global
industrial companies. Their most striking result was that the economic and social indicators

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achieved 4,1%, the environmental indicators achieved 3,6% of the total possible points in
GRI score. Also, organizational features and general performance indicators completed the
score with 47,9% and 44,3% respectively.
On the other hand, Perez and Sanchez (2009) undertake the evolution of sustainability reports
of four mining companies, from 2001-2006, identifying that the social aspect was the most
reported by those companies, followed by the environmental and economic aspects.
Despite the evidences shown above, Moneva, Archel and Correa (2006) state that GRI
guidelines are used in a biased way in the sense that some organizations that label themselves
as GRI reporters do not behave in a responsible way with respect to social equity, human
rights or gas emissions. For them, the concept of sustainability that underlies the GRI
guidelines presents some shortfalls and weaknesses that contribute to perceive it in a simple
manner limited to a disclosure of a collection of non-integrated indicators corresponding to
the current year.
3. Methodology and Data Collection
The companies were chosen due to the nature of the stock exchange indexes: both ISE and
FTSE4Good Global Index represent groups of companies that meet globally recognized
social and environmental responsibility standards. They are part of BM&FBovespa (Brazilian
Stock Exchange) and LSE (London Stock Exchange) indexes respectively.
We worked with companies that used GRI guidelines on their 2011 sustainability reports.
Therefore, only 35 out of 38 companies of ISE were considered. We set that as our
comparative number, so the logic approach was to select 35 sustainability reports from
companies listed in FTSE4Good Global Index. The following distribution by economic sector
of ISE companies is as follows: 8 companies for Financial, 15 for Infrastructure, 10 for
Industrial and 2 for Services.
The FTSE4Good Global Index comprises of 729 companies, 511 of those are from the United
Kingdom, Japan, France, USA and Australia. These countries were selected due to its
representativeness of the price index. We have been through the websites of all these 511
companies to find that only 120 of them used GRI guidelines in 2011. We weighted the
representation of each country using the number of reports available from companies located
in this index. See table 1 below.
Table 1. Country weights assigned by number of reports in the FTSE4Good sample
Number of
Position Country Weight Reports
1º USA 31% 37
2º JAPAN 24% 29
3º UK 21% 25
4º FRA 13% 15
5º AUS 11% 14
Total 120

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To compare both indexes, ISE and FTSE4Good, using the same number of companies, the
weight for each country presented in Table 1 was considered for each economic sector.
Example: Japan has a weight of 24%, so the ideal sample would have at least two Japanese
companies for the financial sector (24% x 8 = 1,92), four for the infrastructure sector (24% x
15 = 3,6), two for the industrial sector (24% x 10 = 2,4) and zero companies for the services
sector (24% x 2 = 0,42). Numbers were rounded up to the next unit when the second decimal
place was higher or equal to 0,5. Having then calculated the number of companies by
economic sector and by country, the companies were selected in a random sort. The final
sample is presented in Table 2.

Table 2. FTSE4Good Sample

JA USA UK FRA AU Total
Financials 0 3 2 2 1 8
Infrastructure 4 2 4 2 3 15
Industrial 3 3 3 0 1 10
Services 0 1 1 0 0 2

The 70 companies were divided into four sectors - Financial, Industrial, Infrastructure and
Services (Table 3).

Table 3. Reports Divided by index and Economic sector

ISE FTSE4Good Total
Financial 8 8 16
Infrastructure 15 15 30
Industrial 10 10 20
Services 2 2 4
Total 35 35 70

3.1 Content Analysis

The qualitative method chosen to conduct our study was content analysis. It consists in
collecting and classifying quantitative and qualitative data into pre-defined categories in
order to find patterns between the information selected (Guthrie & Abeysereka, 2006).
We have used GRI pre-defined aspects as per Ching et al (2013) to classify the information
found in the reports. The framework proposed by GRI consists in the TBL (economic, social
and environmental dimensions) divided in aspects and the indicators under the aspects. For
example, the EN1 indicator is inside the category Materials, which is inside the
Environmental aspect. The EN1 indicator represents “materials used by weight or volume”.
We classified the indicators present in the reports in three categories: fully reported (when all

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information required by the indicator was disclosed, partially reported (the indicator was
partially reported) and not reported (when no information of the indicator was disclosed in
the report). Each of these categories has its own score attached (1, 0,5 and 0, respectively).
Example: BicBanco (ISE) reported the EN1 indicator disclosing the amount of paper
consumed during the year of 2011, along with the percentage of it that was recycled,
receiving the classification fully reported. Northern Trust (FTSE4Good), however, disclosed
the indicator informing only the amount of material recycled (without specifying which
material is that) and added some vague statements about their commitment with recycling. It
was not what the indicator asked, but as it had some relation to the topic and made sense
considering the whole of the report, it was classified as partially reported. On the other hand,
Bradesco (ISE) and British Land (FTSE4Good) didn’t report anything on this indicator,
which left them with the classification not reported.
The indicators were used instead of its definition. Similar structures were used by Poser et al
(2007) and Morhardt et al (2002). This approach made possible for us to identify the stage of
adherence to GRI in the sustainability reports, by analyzing if companies disclosed the
indicators and how they disclosed them. Declaring the level of disclosure in these
classifications is similar to what GRI proposes companies to do in their reports.
3.2 Methodology to calculate the scores and use of statistical techniques
Reporting guidelines are quite incipient scoring systems and Ching et al (2013) took
advantage of this to produce a new scoring methodology. We have adopted the same
methodology proposed in 4 levels to calculate the scores. The bottom level, with the 79
indicators. We calculated scores (from 0 to 1) for each information of the 70 companies
individually, based on content analysis. These 79 indicators were aggregated, in an upper
level, by aspect (as defined by the GRI guidelines) and the scores, in each aspect, were
calculated using arithmetic mean of their respective indicators. Moving up, the aspects were
aggregated by dimension (the second level) and their scores were composed using arithmetic
mean of their respective aspects. Finally the overall score gathering the scores of the 3
dimensions is the top level. Exception was made for the social dimension, where there is a
category level as suggested by GRI guidelines.
By using arithmetic mean, we say that every indicator, to compose the score in each aspect
and every aspect in each dimension, has the same weight, despite they (the aspects and
dimensions) have greater or lesser amount of indicators.
For instance, the 4 topics of aspect Economic performance together have the same weight as
the group of 3 topics of aspect Market presence and as the 2 topics of the aspect Indirect
economic impacts. And these 3 aspects in the economic dimension have together the same
importance as the 9 aspects of the environmental dimension.
Having the scores calculated, a quantitative approach is employed for statistical analysis. To
verify whether the data sets follow a normal distribution, Shapiro-Wilk tests were applied. As
we will show later, not all data sets are normally distributed. So, non-parametric statistical
tests, as Mann-Whitney and Kruskal-Wallis, were applied. Together with Kruskal-Wallis,

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once statistically significant differences are detected, post-hoc test was used as suggested by
Siegel and Castellan (1988) and Daniel (1978).
4. Findings and Discussion
4.1Ranking the companies
The analysis of the reports resulted in a ranking, which summarizes the level of adherence to
the GRI indicators that companies achieved in all the triple bottom line dimensions. The top
12 companies are listed in Table 4, and the complete list of companies can be seen in the
appendix.

Table 4. 12 top General Adherence Level

Position Company Sector Country Index Score
1º Natura Ind BR ISE 0,924
2º Fibria Ind BR ISE 0,911
3º Energias BR Infra BR ISE 0,899
4º Sul America Fin BR ISE 0,867
5º Cemig Infra BR ISE 0,848
6º Itaú Unibanco Fin BR ISE 0,835
7º Coelce Infra BR ISE 0,835
8º AGL Energy Infra AU FTSE4Good 0,816
9º CRH Ind UK FTSE4Good 0,797
10º Banco do Brasil Fin BR ISE 0,785
11º Anglo American Infra UK FTSE4Good 0,785
12º Suzano Papel Ind BR ISE 0,759

ISE companies occupy nine of top 12 first positions in the ranking, while the only three
FTSE4Good companies occupy the 8th, 9th and 11th positions. Five companies are from the
Infrastructure sector, four from the Industrial sector and three from the Financial sector.
Looking to the whole sample, the quality scenario is as follows: 17% achieved score above
0.75; 33% between 0.51 and 0.75; 44% between 0.26 and 0.5 and 6% scored below 0.25.
As shown in Figure 1, FTSE4Good Global Index companies presented 1067 fully reported
indicators (39%), 439 partially reported (16%) and 1259 not reported (46%), with an average
of 43 indicators per report. ISE companies presented 1425 fully reported indicators (52%),
389 partially reported (14%) and 951 not reported (34%), with an average of 52 indicators per
report.
The high percentage of indicators not reported (in both indexes) goes against GRI
recommendation. Tiong and Ananthamaran (2011) and Leite et all (2009) also drew attention
that companies do not justify the omitted indicators.

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Figure 1. Reporting comparison between ISE and FTSE4Good

The most disclosed indicators of all the reports (appearing in more than 53 reports, which
represent 75% of the total sample) are presented in Table 5. These sixteen indicators represent
17% of the total amount of reported indicators. Eight of then are form social aspect, seven
from environmental and one from economic aspect. This finding is in line with Perez and
Sanchez (2009) where the social aspect was the most reported, followed by environmental
and economic. Moreover, LA1, EN16 and EC1 were also noted by Roca and Searcy (2012)
as three of the most reported indicators in their study.

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Table 5. Most frequent indicators disclosed and their respective descriptions

Indicator
Frequency Description
Code

LA1 66 Total workforce by employment type, employment contract, and region.

N16 64 Total direct and indirect greenhouse gas emissions by weight.

Composition of governance bodies and breakdown of employees per category

LA13 64 according to gender, age group, minority group membership, and other
indicators of diversity.

EN3 58 Direct energy consumption by primary energy source.

EN18 58 Initiatives to reduce greenhouse gas emissions and reductions achieved.

Education, training, counseling, prevention, and risk-control programs in

LA8 58 place to assist workforce members, their families, or community members
regarding serious diseases.

Initiatives to mitigate environmental impacts of products and services, and

EN26 57
extent of impact mitigation.

Nature, scope, and effectiveness of any programs and practices that assess and
SO1 57 manage the impacts of operations on communities, including entering,
operating, and exiting.

Direct economic value generated and distributed, including revenues,

operating costs, employee compensation, donations and other community
EC1 56
investments, retained earnings, and payments to capital providers and
governments.
EN22 55 Total weight of waste by type and disposal method.

LA4 55 Percentage of employees covered by collective bargaining agreements.

Rates of injury, occupational diseases, lost days, and absenteeism, and
LA7 55
number of work related fatalities by region.
Percentage of employees receiving regular performance and career
LA12 55
development reviews.

EN4 54 Indirect energy consumption by primary source.

Public policy positions and participation in public policy development and
SO5 54
lobbying.
EN8 53 Total water withdrawal by source.

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4.2 Adherence level per economic sector and index

Table 6 shows a descriptive statistics of the total sample (70 companies), of each index group
(ISE and FTSE4Good) and of each economic sector. The score of the total sample was of
0.5159. ISE companies achieved a higher score than FTSE4Good companies, 0.5867 and
0.4451 respectively. These results are in line with those in table 2, in which nine of top 12
companies with the best scores are from ISE. By economic sector, infrastructure has the
highest score (0.5626) followed by industrial (0.5117), financial (0.4942) and services
(0.2724).

Table 6. Descriptive summary for the score of the company subsets

Subset N Mean Std. Deviation Std. Error Minimum Maximum

AllCompanies 70 .5159 .2181 - .1046 .9484

Fin 16 .4942 .2066 .0516 .2344 .8684

Infra 30 .5626 .2104 .0384 .1046 .8819

Ind 20 .5117 .2313 .0517 .2237 .9484

Serv 4 .2724 .1034 .0517 .1943 .4245

ISE 35 .5867 .2199 .0371 .2237 .9484

FTSE4Good 35 .4451 .1946 .0329 .1046 .8314

The next step is to decide the use of parametric or nonparametric statistical approach in our
sample. Shapiro-Wilk nonparametric normality test was applied and table 7 shows the
goodness of fit results when all companies are taken together and when they are separated in
economic sectors and in index groups.
Using a 0.05 significance level, all the results for total sample, by index group and by
economic sector, do not present as a normal probability distribution. This can be seen in the
p-value column. When p-value is lower than the significance level assumed for the test the
null hypothesis is rejected. So, assuming a conservative approach, the analysis will be
performed using nonparametric statistical tests, such as Kuskal-Wallis and Mann-Whitney.

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Table 7. Normality test

Companies Shapiro-Wilk
subsets Statistic DF p. value
Financial .869 16 .026
Infrastructure .956 30 .241
Industrial .922 20 .106
Services .804 4 .110
ISE .945 35 .082
FTSE4Good .937 35 .044

Table 8 shows the multiple comparison Kruskal-Wallis nonparametric test across the four
distinct economic sectors. Using 0.05 significance level, this test points that there is no
significant differences in the sectors, as can be seen in the Asymp. p-value. In other words,
results show that the level of adherence to the GRI indicators is the same across all sectors.

Table 8. Kruskal-Wallis multiple comparison among the four economic sectors

Sector N MeanRank Test Statisticsa.b
Financial 16 33.69 Chi-Square 7.683
Infra 30 40.37 Df 3
Industrial 20 34.55 Asymp. p-value .053
Services 4 11.00
Total 70
a. Kruskal Wallis Test
b. Grouping Variable: Sector

4.3 Analysis of quality of information disclosed by 3 sustainability dimensions

Table 9 shows a descriptive statistics of the total sample (70 companies) in each dimension.
The scores of the three dimensions are relatively even. Companies that reported in the
economic, environmental and social dimensions scored 0.5214, 0.4957 and 0.5305
respectively.

Table 9. Descriptive summary of the sustainability dimensions

Dimension N Mean Std. Deviation Std. Error Minimum Maximum

Economical 70 .5214 .2602 .0311 .0000 1.0000

Envrironmental 70 .4957 .2487 .0297 .0555 .9944
Social 70 .5305 .2395 .0286 .1101 .9458

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When separated by index, the Kruskal-wallis test revealed that there is no difference in the
adherence level among the dimensions (Table 10). Therefore, hypothesis 4 is accepted: the
level of adherence is equivalent for every sustainability dimension within companies of the
same index.

Table 10. Kruskal-wallis test for each dimension per index

Dimension N Mean Rank Test Statisticsa.b
ISE Economical 35 55.03 Chi-Square 1.573
Environmental 35 47.77 Df 2
Social 35 56.20 Asymp. p-value .455
Total 105
FTSE Economical 35 51.03 Chi-Square .562
Environmental 35 56.11 Df 2
Social 35 51.86 Asymp. p-value .755
Total 105

Roca and Searcy (2012) and Ching et al (2014) came to the same results thal all TBL aspects
are disclosed with same quality level.
Table 11 shows the goodness of fit results using 0.05 significance level. All the dimensions
results cannot be considered as normally distributed variables. This can be seen in the p-value
column. Based on this finding, the non-parametric Kruskal-Wallis comparison test was
applied (Table 12).

Table 11. Normality tests for all dimensions and indexes

Dimension Shapiro-Wilk
Statistic Df p-value
Economical
ISE .969 35 .416
FTSE .972 35 .492
Environmental
ISE .923 35 .017
FTSE .963 35 .276
Social
ISE .959 35 .215
FTSE .889 35 .002

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Table 12. Kruskal-Wallis test for each index and sustainability aspect
Aspect Sector N Mean Rank Test Statisticsa.b
Economical Financcial 16 34.56 Chi-Square 4.153
Infrastructure 30 38.73 Df 3
Industrial 20 35.13 Asymp. p-value .245
Services 4 16.88
Environmental Financcial 16 32.28 Chi-Square 9.489
Infrastructure 30 40.32 Df 3
Industrial 20 36.38 Asymp. p-value .023
Services 4 7.88
Social Financcial 16 35.28 Chi-Square 3.177
Infrastructure 30 38.48 Df 3
Industrial 20 34.40 Asymp. p-value .365
Services 4 19.50
a. Kruskal Wallis Test
b. Grouping Variable: Dimension

This test points to a difference observed in the environmental dimension in the GRI
adherence between the companies, as can be seen in the Asymp. p-value (see table 12).
Kruskal-Wallis test, however, does not indicate in which sector this difference can be found.
In order to find this, the post-hoc tests suggested by Siegel and Castellan (1988) and Daniel
(1978) were applied. The results revealed that the Infrastructure sector is more adherent than
the Services sector for the Environmental dimension. Sampaio et al (2012) and Davys and
Searcy (2010) indicated in their studies that infrastructure companies are the ones with the
higher number of reports and have a tendency to be more adherent to worldwide frameworks
(such as GRI).
We found significant differences in the quality of the sustainability reports in the two index
groups. ISE companies present reports more adherent in the economic and social dimensions
than FTSE4Good (see table 13) Therefore, H1 and H3 hypotheses are rejected. The data
provide no conclusion regarding the environmental dimension (H2).

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Table 13. Mann-Whitney tests for all dimensions and indexes

Group N Mean Rank Sum of Ranks Mann-Whitney Test
Econômico ISE 35 42.29 1480.00 Mann-Whitney U 375.000
FTSE 35 28.71 1005.00 Wilcoxon W 1005.000
Total 70 Z -2.791
Asymp. p-value (2-tailed) ,005
Ambiental ISE 35 38.20 1337.00 Mann-Whitney U 518.000
FTSE 35 32.80 1148.00 Wilcoxon W 1148.000
Total 70 Z -1.110
Asymp. p-value (2-tailed) ,267
Social ISE 35 42.64 1492.50 Mann-Whitney U 362.500
FTSE 35 28.36 992.50 Wilcoxon W 992.500
Total 70 Z -2.937
Asymp. p-value (2-tailed) ,003

5. Conclusion
This paper analyzed companies´ sustainability reports from two index: FTSE4Good and ISE.
Despite GRI framework is globally accepted and used by most companies around the world,
only 23% of the FTSE4Good sample adopted GRI guidelines. This shows there is not yet a
well established world standard framework to report sustainability. Also, results showed that,
in general, less than 50% of the GRI indicators are fully reported and 40% of them are not
reported at all. Companies need to disclose their information in a more integrated way,
addressing sustainability issues under the scope of business strategy.
We examined the sustainability reports of seventy companies and, based on content analysis,
developed a scoring system (from 0 to 1) reflecting the adherence to GRI indicators in those
reports in order to test two types of hypothesis:
The companies listed in a benchmark sample (FTSE4Good) are more adherent to the GRI
indicators in all sustainability dimensions (economic, environmental and social) than those
companies listed in a newer index (ISE);
The level of adherence to GRI indicators, within the companies listed in the same index is
equivalent for every sustainability dimension.
According to first hypothesis type, FTSE4Good companies were expected to have more
adherences to GRI than ISE because of the reasons displayed: it is a global index, while ISE
is a local index; has more expressive values in market capitalization and has also bigger
number of companies. This did not prove quite right, however there is still room for
improvement for both indexes. The results revealed no distinction in the environmental
dimension. Two possible explanations for this finding could be offered: a) because the ISE
index is more recent, it was built based on experiences of other indexes that preceded and
may have inherited their good practices; b) due to the fact that companies from both indexes
compete globally to attract investments and ISE companies are in emerging market, the latter

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are giving a credibility aspect to their reports to attract investors. ISE companies presented a
higher level of adherence to the GRI indicators in the economic and social dimensions. Good
sustainability reports showing deeper sustainability concerns and business practices related
are aligned to the Stakeholder and Legitimacy theories.
Within the same index, companies are reporting the indicators in all the three dimensions
with equivalent adherence, which accepts the second type of hypothesis of this study. A good
sustainability report is directly related to the good content in all the tree dimensions. Also, the
companies, regardless of economic sector, pay similar attention in all dimensions. This
behavior confirms Ching et al study (2013) and it is present again in FTSE4Good sample.
Furthermore, considering the whole sample and the sectors in which the companies were
divided, the Infrastructure sector presents more adherences to the environmental dimension
when compared to the Service sector.
In any case, as stated by Okoye et al (2013), managing the social and environmental cravings
of the stakeholders is essential to maintain a long term relationship between these
stakeholders and the company. We can say that, by disclosing sustainability reports,
companies are acting according to the Stakeholder and Legitimacy theories, regardless of
their level of adherence to GRI and/or compliance with reporting standards.
As suggestion for a future study, this research could be repeated comparing with other price
indexes, such as Dow Jones, Tokyo Stock Exchange or Frankfurt Stock Exchange.
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Appendix
Appendix 1. Complete list of analyzed companies
Company Name Sector Country Index Company Name Sector Country Index
AES Tietê Infra BR ISE AGL Energy Infra AU FTSE4Good
Anhanguera Serv BR ISE Air Products And Chemcom Infra USA FTSE4Good
Banco do Brasil Fin BR ISE Amcor Ind AU FTSE4Good
BicBanco Fin BR ISE Anglo American Infra UK FTSE4Good
Bradesco Fin BR ISE Asahi Kasei Corporation Infra JA FTSE4Good
Braskem Ind BR ISE BHP Billiton Infra UK FTSE4Good
BRF Foods Ind BR ISE British Land Fin UK FTSE4Good
Cemig Infra BR ISE CRH Ind UK FTSE4Good
Cesp Infra BR ISE Foncière des Regions Fin FRA FTSE4Good
Coelce Infra BR ISE HCP Fin USA FTSE4Good
Copasa Infra BR ISE InterContinental Hotels Group Serv UK FTSE4Good
Copel Infra BR ISE International Paper Infra USA FTSE4Good
CPFL Energia Infra BR ISE Johnson Matthey Infra UK FTSE4Good
Duratex Ind BR ISE Kimberly-Clark Ind USA FTSE4Good
Eletrobrás Infra BR ISE Lloyds Banking Fin UK FTSE4Good
Eletropaulo Infra BR ISE Lonmin Infra UK FTSE4Good
Embraer Ind BR ISE Man Group Ind UK FTSE4Good
Energias BR Infra BR ISE Marriott International Serv USA FTSE4Good
Even Serv BR ISE Mitsubishi Chemical Holdings Infra JA FTSE4Good

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Fibria Ind BR ISE Mohawk Industies Ind USA FTSE4Good

Industrias Romi Ind BR ISE Natixis Fin FRA FTSE4Good
Itaú S.A Fin BR ISE Nikon Corp Ind JA FTSE4Good
Itaú Unibanco Fin BR ISE Northern Trust Fin USA FTSE4Good
Light S/A Infra BR ISE NTT Docomo Infra JA FTSE4Good
Natura Ind BR ISE Orica Infra AU FTSE4Good
Oi (Telemar) Infra BR ISE Panasonic Corp Ind JA FTSE4Good
Redecard Fin BR ISE Procter & Gamble Ind USA FTSE4Good
Sabesp Infra BR ISE Reckitt Benckiser Group Ind UK FTSE4Good
Santander Brasil Fin BR ISE Stockland Fin AU FTSE4Good
Sul America Fin BR ISE Suez Environment Infra FRA FTSE4Good
Suzano Papel Ind BR ISE Sumitomo Chemical Infra JA FTSE4Good
TIM Infra BR ISE Telstra Corp Infra AU FTSE4Good
Tractabel Infra BR ISE Total Infra FRA FTSE4Good
Ultrapar Ind BR ISE Toyota Motor Ind JA FTSE4Good
Vale Ind BR ISE Wells Fargo Fin USA FTSE4Good

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