Business Sustainability Assessment: Comparing Results of Two Studies
Keywords:business sustainability, sustainability assessment, corporate sustainability, sustainability evaluation, sustainable development, annual statements, availability
AbstractBusiness sustainability assessment requires data, which can be gathered from various information sources. Annual statements are frequently used as a data source, because they are considered to be one of the most important means of the company to communicate with various stakeholders. The document is signed by the management of the company, ensuring that the information in the statement is accurate, and because the statements are audited by an independent thirdparty.The research was intended to solve the problem of the lack of information about the content of Lithuanian companies' annual statements from the perspective of corporate sustainability assessment. Thus, two studies were executed, first analysing annual statements of 15 companies, the second analysing the remaining annual statements of 23 companies, to build understanding of what information is available for further studies of business sustainability assessment. The studies encompassed 38 Lithuanian companies, listed in the Baltic main and secondary lists in Vilnius market in NASDAQ OMX, which constituted 100% of companies. As the studies were done in the beginning of 2010, annual statements for 2008 were used.The methods of the research were logical literature analysis, computer assisted ąuantitative content analysis, comparative analysis.The first part of the paper reviews the research of Lithuanian scientists in the field of sustainable development, and more specifically, various business and industry sectors. The literature review also includes various business sustainability evaluation models, focussing on the structure of the models, the ąuantity of companies analysed and the sources of data, used in the evaluations. In the second parts of the paper, the model of business sustainability evaluation is briefly described to create the basic structure for the research of annual statements of the companies. The third part describes the methodology of the research: what data was analysed, how it was analysed, the structure of the research. In the fourth part of the article, the results of the study are presented, explaining what information was most often found in the annual statements and how freąuently it was found. Eventually, the findings are discussed from the perspective of whether the availability of information is satisfactory to execute corporate sustainability assessment.The model for business sustainability assessment, used in this study, is based on the idea, that companies have an impact on the environment. But it is not always possible to state in advance weather an impact is positive or negative, as it depends on a specific company case analysed. Thus, the model is created grouping the company impacts into positive, negative and situational.Positive impacts cover employee training, employing disabled, employing people with no work experience and elderly ones, workplace safety, family friendly workplace, lab or union existence, taxes paid, salaries paid, profit and donations to charity. Negative impacts cover pollution, product end-of-life pollution, discrimination, corruption, resource depletion, wasted materials, child lab or and fines paid to the government. Situational impacts cover product/service itself, and the delivery of this product or service to the society.The study showed, that the information, present in all the 39 annual statements, is the information about profit, paid taxes, paid salaries, and the product or service the company produces. 82% of the annual statements had the information about employee training, 79% had the information about the materials and resources used, 72% of statements had the information about donations to charities, 69% of statements had information about fines paid, and 67% of annual statements had the information about labour unions. Among the information, that was not found at all in the annual statements is child labour and employing inexperienced, with 0% occurrence, 5% (2 annual statements out of 39) had some information about employing the disabled and corruption.The terms "renewable" and "unrenewable" (Lithuanian eąuivalents) were found mentioned once each, showing, that the information about renewable resources cannot be found in the statements. From the sustainability perspective, this lack of information greatly limits the possibilities to include renewable resources, as one of the indicators, in business sustainability evaluation.The results show, that because of the lack of some information in the annual statements, either the business sustainability assessment model should be simplified and data, that is not available, should be removed or substituted, or other sources of information (such as corporate websites, press releases or interviews) should be employed to gather the data needed for the evaluation of corporate sustainability. The third possibility is executing empirical business sustainability evaluation studies explicitly stating the limitations- what necessary information was not available during the research.
THE ECONOMIC CONDITIONS OF ENTERPRISE FUNCTIONING