The ESG reporting quality changes in Sweden

Abstract

Motivated by global challenges such as climate change and resource depletion, sustainability has become a crucial focus for businesses. Stakeholders are demanding greater transparency on Environmental, Social and Governance (ESG) issues, making strong ESG reporting essential. This shift has increased the importance of ESG reporting quality, especially in Sweden, which is known for its innovative practices and compliance with the EU ESG reporting directive. The purpose of this qualitative study was to analyze the changes in the quality of ESG reporting for a specific Swedish listed company industry in a series of dynamic environments such as flu and war outbreaks after 2018 as time and related institutions have evolved. In order to do that, the study used the ESG Information Quality Analysis Framework proposed by Arvidsson and Dumay (2022) to assess ESG reporting along three critical concepts: position, development and performance. The analyses indicated an increase in the ESG index and all its sub-dimensions (Environment score, Social score, and Governance score) in 2019 compared to 2018, as reported in previous literature (Arvidsson & Dumay, 2022). This increasing trend continued through 2021 and 2022. It was concluded that the improvement may be due to the impact of dynamic influences, firms are becoming more adept at integrating reporting standards such as the GHG Protocol (Greenhouse Gas Protocol), SDGs (Sustainable Development Goals), UN Global Compact, and GRI index into their reports.