Question

What incentives and disincentives do companies have to report sustainability information?

Answer 1

Throug sustainability reporting, company gets following incentives:

1. It exists for the society as a whole and although aim is maximizing revenue but it also has to give something back to the society. The report highlights various ways in which company has repaid the society.

2. Such a report enhances the brand value of a company.

3. It increases confidence of various stakeholders.

4. It provides more confidence to the public at large.

However the disincentives are:

1. Not everybody is interested to read this report so the target audience may not be reachable.

2. Not all issues highlighted are of importance to stakeholders.