Sampling

The chosen sample covers 15 Finnish listed companies that, on 7th October 2020, were included in the OMXH15 index. OMXH15 is a stock market index that includes companies whose stocks are most exchanged on the Helsinki Stock Exchange. When a sample is chosen like this, based on subjective judgment, a non-probability sampling strategy is adopted (Saunders et al. 2000,170).

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Sampling

Devise analytical categories

Coding

Define the unit of analysis

• Purposive sampling; OMXH15

• Analyzed years; 2013, 2016, 2019

• Data collection; Separate sustainability report, combined

annual report, or annual report

• Areas; Economic, Environment, Human rights, Labor practices and decent work, Product

responsibility and Society

• Information type; Vision and goals, Management approach and Performance indicators

• Sentence

• Excel

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There are different non-probability sampling techniques to choose from. However, purposive sampling was adopted since these companies will presumably provide the best chance to answer research questions (Saunders et al. 2000,174). Therefore the small sample size is justified as the goal was to choose a sample that would be most informative (Neuman 2005, 272). Additionally, a small sample size is acceptable, as a larger number of studied companies would have been out of reach in terms of available time and the degree’s scope.

The reasoning for this particular choice of sample is that these companies are large, well-known (i.e., media visibility) companies in Finland, and it is more likely that these companies report more sustainability-related disclosures than, for example, smaller companies. Additionally, since these companies’ shares are the most exchanged stocks in Finland, guarantee that these companies are widely held and therefore have a broad audience of stakeholders. While sustainability reporting is gaining popularity, it is also more likely that these companies have started sustainability reporting already in the early days, and therefore assessing development is possible. If random sampling had been used, the ability to answer research questions could have been compromised.

However, two companies, Sampo Group and Neles needed to be left out of the sample. The reasoning for this was that Sampo Group consists of the parent company Sampo plc and three of its subsidiary companies. Sampo Group (2017, 37) states that corporate responsibility work is carried out mainly at the subsidiary level. Sampo Group had not conducted sustainability reporting at a group level at all, not until 2017, when the Group published its first non-financial report. (Sampo Group 2017, 37) As the goal of this thesis is to discover how sustainability reporting has developed, based on this fact, the company is not suitable for analysis and the purpose of this thesis.

Additionally, Neles was founded only in 2020, when Metso Flow Control was separated in a demerger of Metso Minerals and Outotec and started operations under the new name (Metso Corporation 2019, 17). As the company has no sustainability reports nor annual reports of its own, but only reports from Metso origins, it is not suitable for the sample. This resulted in a decision to leave these companies from the sample, as assessing development would not have been feasible.

The final sample companies were broken down into environmentally sensitive and non-environmentally sensitive industries. Following Branco & Rodriques (2008, 691) and Reverte (2009, 358), the system to classify industries is based on industries’ being either

“more sensitive” or “less sensitive” based on the risk of being criticized for their operations.

As described earlier, industries seen with more impacts cover Energy, Basic Materials, Industrials, Utilities. All other industries are seen as “less sensitive” and hence, non-environmentally sensitive industries. These cover Health care, Telecommunications, Consumer discretionary, and Financials. The final 13 companies and the industries these companies represent are shown in Table 3 below.

Table 3 The final sample companies

The content analysis framework developed by Bouten et al. (2011, 190) can be applied to analyze any written text, which is crucial in this situation as the corporate reporting practices alter plenty. Indeed, three types of documents were used for the analysis, and Figure 6 points out the selection process. The analyzed data consisted of secondary data in the form of separate sustainability reports, combined reports, or annual reports collected from the company websites.

Environmentally sensitive companies (n=8) Industry

Neste Energy

Outokumpu Basic materials

Stora Enso Basic materials

UPM-Kymmene Basic materials

Kone Industrials

Valmet Industrials

Wärtsilä Industrials

Fortum Utilities

Non-environmentally sensitive companies (n=5)

Nokian Tyres Consumer discretionary

Orion Health care

Elisa Telecommunications

Nokia Telecommunications

Nordea Financials

Figure 6 Used documents in analysis

While Bouten et al. (2011) used annual reports from 2005 as their main source of data for the analysis, this thesis aimed to use separate sustainability reports as the primary source.

Bouten et al. (2011, 190-191) argued that annual reports are the most useful data source as annual reports are the most important communication tool and that separate sustainability reports are not as popular as combined annual reports. However, as this thesis analyzes years starting from 2013, GRI Guidelines have gained global popularity, and therefore separate sustainability reports are more common than before. This is also evident in Table 4, which covers what document was used per company per year in the analysis. Therefore, as separate sustainability reports are more likely to disclose more sustainability information than annual reports and grant a better chance to answer the research questions, they are used as the first choice of data in this thesis.

If a company did not publish a separate sustainability report, an combined annual report was used instead. It is essential to separate these two documents from each other, as in some cases, companies published both of these documents. The company’s annual report was considered combined if it had a distinctive sustainability portion included in the report and included financial information. Of course, judging what a distinctive portion of the report is, depends on the reader. In this thesis, a distinctive portion pointed to a chapter of sustainability-related information covering the areas of economic, environmental, and

If not available Separate Sustainability

Report

Combined Annual Report

If not available

Annual Report

social. As stated in Figure 6, a separate sustainability report was preferred over a combined annual report.

Finally, if neither of these was available, a regular annual report covering mainly financial data was used. Therefore, the goal of Table 4 is to demonstrate what documents were used for the analysis on a company level and illustrate how reporting practices vary between companies.

Table 4 Company reporting practices and used data