Graph use in sustainability reports: a comparative analysis of AuSSI members, cluster leaders and other sustainability reporters in the ASX200

Graphs are a particular visual communication device that can be used attract and focus a reader’s attention, and their use in annual reports is common. As well as providing genuine communication benefits, graphs can also be used in a strategic and rhetorical role to emphasise aspects of performance to serve impression management goals. Beattie and Jones [1992, 1997, 1999] describe three ways in which graphs may be manipulated to serve impression management purposes: through selectivity in graph use, measurement distortion, and presentation distortion. Graph use can be selective, with a variable being graphed when it shows a positive trend but omitted when it does not. Graphs can be distorted or enhanced to accentuate positive trends and to deemphasise negative trends or data points. Omission of gridlines, scales and data values can make precise interpretation of graphed data difficult, enhancing the likelihood that the graph distortion will not be easily detected. Research suggests that selectivity and distortion do occur with annual report graphs in a manner consistent with impression management motivations.

Whilst graph use in corporate annual reports has been well documented, far less is known about graph use in stand-alone sustainability reports, despite the fact that these reports are unregulated. These reports are produced as the result of a discretionary management reporting decision. The voluntary and unaudited nature of such reports potentially makes them an attractive and viable impression management vehicle. Alternately, they might be produced in response a genuine desire to inform stakeholders about the broader aspects related to the sustainability of a company’s operations. If the latter is the case, graph use in these reports should display little of the characteristics potentially associated with impression management motives that have been documented in corporate annual reports.

The objective of this research is three-fold. The first aim is to document the nature and extent of graph use in the stand–alone sustainability reports produced by companies making up the ASX200 share price index. Forty-four of the top 200 companies produced such reports. The second aim is to compare characteristics of graph use in sustainability reports of those companies included in the Australian SAM Sustainability Index (AuSSI) with those not included the index. The AuSSI comprises the top sustainability-driven companies in the ASX200. The specific aim is to determine whether decisions regarding graph use differ systematically between those companies that are included in the AuSSI and those that are not. Thirty-three of the 44 sustainability reporters were included in the AuSSI. Finally, a comparison of industry cluster leaders in the AuSSI with other AuSSI members is undertaken to determine whether the leaders adopt any particular distinctive practices regarding graph use in their sustainability reports. Of the 33 AuSSI sustainability reporters, 14 were cluster leaders.