Different materiality for different purposes: Co-operative sustainability reporting with different frameworks and tools

Introduction: The appointment of the International Co-operative Alliance (ICA) representative to the International Financial Reporting Standards Advisory Council or co-operatives being among fore runners applying... [ view full abstract ]

Introduction: The appointment of the International Co-operative Alliance (ICA) representative to the International Financial Reporting Standards Advisory Council or co-operatives being among fore runners applying sustainability reporting are examples of increasing role of the co-operative movement also in the field of reporting standard setting processes. In 2013, the ICA emphasized the increasing need for co-operatives to capture, verify and more transparently communicate their sustainability related performance (ICA 2013; cf. Rixon & Beaubien 2015).

Sustainability matters are multi- and cross level research questions. This full paper concentrates on micro level as accounting and reporting functions are conducted at the firm level. However, sustainability accounting and reporting standards are converging towards mandatory rules that could enable system level sustainability reforms, which can be observed at all levels of analysis (e.g. Searcy & Buslovich 2014; Van der Laan Smith et al 2014; Bebbington & Larrinaga 2014; Steyn 2014; Hahn & Kühnen 2013). The concept of materiality raises different issues according to different frameworks, which in turn have effects on incentive frameworks (cf. Edgley et al. 2015; Zicari 2014).

Sustainability reporting is advancing beyond conventional legalistic structures (c.f. Burritt & Schaltegger 2014; Henrÿ 2012). The new GRI G4 standard requires value-chain assessment regardless the reporter's ownership control. The necessary materiality assessments can be realized with established methodologies (e.g. (Social) Life Cycle Assessment techniques). A reporter may also use different boundary for different issues. A concern is that reporters screen out materiality issues differently and comparability between reports may weaken (cf. e.g. Boiral & Henri, 2015; Searcy & Buslovich, 2014).

Objective, data and methodology: This exploratory paper examines interconnectedness enacted in the cooperatives' financial and sustainability reporting by focusing on the use of different frameworks and tools for defining and analysing materiality issues. Material information is essential to be useful for sustainability reporting purposes and for the co-operative's own strategic and operational functions and especially for the use of members. Varied potential internal and external uses of sustainability related reporting are gathered keeping in mind both materiality and comparability perspectives for better understanding of strengths and limitations concerning proceeding integrated sustainability reporting context.

The study exploits both archival data using comparative content analysis from GRI-reporting co-operatives (GRI-reporting database) and the largest co-operatives reports in the world (Euricse 2015) and presents findings from the semi-structured interviews in two case cooperatives.

Keywords: cooperatives, sustainability, material, reporting, interconnectedness.