Posted on: 25/04/2017
Some companies are using integrated reports that combine financial, environmental and social performance to try to hide poor performance, according to a study by the University of East Anglia (UEA).
Researchers found that if a firm’s financial performance was weak then the reports tended to be “significantly longer, less readable and concise, and more optimistic – and so less balanced – suggesting attempts to ‘greenwash’ the true performance”.
Businesses with a poor social performance disclosed less information about their environmental behaviour.
The results were published in the Journal of Accounting & Public Policy.
Gaia Melloni, an accountancy lecturer at the UEA, said: “Our evidence implies that early adopters of integrated reporting manipulate the content and tone of their reports as an impression-management strategy.
“One of the main challenges when you are studying communications on sustainability is whether companies are reporting what they are actually doing.
“The big issue here is that companies are using integrated reporting to greenwash, to make up for very poor actions on their environmental and social impact.”