An evaluation of environmental, social, and governance reporting in the agricultural sector

Abstract

Stakeholders require transparency that companies are conducting business sustain-ably, which can be provided through non-financial disclosures. Businesses that act on environmental, social, and governance (ESG) matters can attain a competitive advan-tage. ESG has become necessary in the agricultural sector as agribusinesses are con-sidered high-impact companies. The lack of uniformity in reporting guidelines leads to inconsistent and overloading of information. The objective of this paper is to con-duct an evaluation and comparison of the current ESG reporting practices of listed agribusinesses in South Africa, Australia, and Chile. To support the quality and quan-tity of reporting, the concept of materiality is addressed by recognising what is mate-rial to be disclosed to stakeholders. The study evaluates how agribusinesses have incorporated the proposed material topics of the new GRI 13 sector standard into their current reporting practices. A qualitative content analysis was done to identify the presence or absence of the 34 proposed material topics in their reports. The find-ings indicate a distinct lack of harmonisation in the agri-food sector disclosures. Topics hardly mentioned included the rights of indigenous people, living income, and climate adaptation. Low disclosures of the keywords Climate adaptation with 3.3%and Climate resilience with 7.0% on average, for all three countries, were reported. It is recommended that the newly proposed GRI 13 sector standard must be implemen-ted as companies can seize this opportunity for increased transparency and gain a strategic advantage. Emphasis on the materiality concept is needed as it connects with the stakeholder theory to disclose only important information