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This perspective on the relationship between organization and stakeholders is more suitable to explainning the emergence of sustainability reporting.

Can someone find a word to "suitable"? It doesn't sound academic.

Thank you.

BarbaraPA · Accepted Answer

Hi Kanonathena

I don't understand what this sentence is trying to say. As one of the people working on sustainability reporting at my company, I am familiar with the ideas, but not with what you're trying to say here.

Kanonathena · Answer

I'm trying to say that there are different accounting theory that can explain why sustainability is popular today. Positive Accounting Theory assume people are all driven by self-interest, so it's contrary to the idea of sustainability reporting which focuses on the collective interest of the society. An alternative to this theory called legitimacy theroy asserts that in order to survive, coperations must release information(such as sustainability reports) that shows they have met the expectation of the stakeholders, so as to become legitimate. This theory is more relevant in justifying the existance of sustainability reporting as it looks at corperations and stakeholders as a system and what the corperations' activities have impact on the system as a whole.

I don't know if I have made the idea clear enough.

BarbaraPA · Answer

The legitimacy theory, which views corporations and stakeholders as a system, explains the drive for sustainability reporting, which looks beyond economic performance to consider the relationship the corporation has on society and the environment.

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