Evaluation of the disclosure data of sustainability reports in the context of industry 4.0: A case study in seven countries

rmation. One of 
the most vital drivers is to encourage the progress of social development and raising the 
awareness of corporations about environmental protection. However, with a level of social 
development at the top of the world, it is likely that the stakeholders in Sweden felt it 
unnecessary to have specific sustainability reports. Reasonably, when there is no mandatory 
regulation from the government and customers do not pay too much attention to the 
environmental and social information disclosed by the companies, they have no motivations 
to invest time and money in producing sustainability reports with high quality. 
The story of Finland is a little different. The social corporate sustainability report 
started to appear in Finland since the 1980s. Corporations in Finland used to have different 
approaches in presentation of social and environmental information. Along with time, the 
integrity of sustainability reports in Finland increased and it became one of the nation’s 
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leading in integrating the environmental performance and financial performance (Matias 
Laine, 2009). One of the primary reason may be Finland is a stakeholder of GRI and 
participating extremely active in this organization. In other words, we can say Finland has 
been successful in movements towards an environment-oriented business. The study of
Hannu Schadewitz and Mikael Niskala (2010) also confirmed that the inclusion of corporate 
social responsibility information in annual reports improved the communication between 
Finnish companies and stakeholders, and therefore increase the value of firms. Stora Enso is 
a typical example of how a Finnish firm, after getting acquainted with corporate social 
responsibility, now has considered it as an inevitable goal of business rather than a pure 
responsibility. According to Matias Laine (2009), in Stora Enso Sustainability Report, 2005, 
p. 6, the company defines sustainability as ‘an umbrella term to describe responsible business 
operations that include economic, environmental and social responsibility’.
North American companies in this report have the lowest scores among seven 
countries in the analysis. Regarding the United States, the downturn of the economies and the 
puzzle of financial crisis that originated from this country probably attracted more attention 
from stakeholders than the social corporate responsibility. The goal of sustainable 
development had to be put after the profit growth and economic operating efficiency. 
Therefore, reacting with the demand stakeholders, especially the shareholders, is likely to be 
the most reasonable explanation for the low quality of disclosure of American companies. 
This argument may be supported by a study of Giacomo Boesso (2006) which shows that the 
complexity of the market is one of the factors influencing the sustainability reports of 
American companies. In term of environmental performance indicator, the case of USA 
should be concerned because of its low point. Obviously, the insignificant application of 4.0 
technology makes US companies less “confident” to show data on this indicator. 
The low scores that Japanese companies gain in the scale seem to be a surprise, 
because Japan is one of the most active participants in the trend of sustainability reporting. 
According to data updated by GRI in 2010, the number of sustainability reports in Japan 
following GRI scheme was in the top four of the world, accounting for 7% of the total reports 
globally. However, the cultural differences between Japan, an Asian conventional country 
and European nations, created the different manner and approach to sustainability reports. 
The hesitation to reveal operating data in social aspect is not only popular in the forest and 
paper industry, but is the general situation in all Japanese sectors (A. Kolk, 2005, p.41). As 
the data in this report reveal, Japanese companies tend to focus more on environmental issues 
rather than social problems. This is not unexpected because Japan has always been a 
technology early adopter of improving resource efficiency, recycling and minimizing waste. 
Another reasonable explanation may be because Japanese people, as many other Asian 
countries, have the tradition of not showing too much about the internal problems, in a 
family, or a corporation, to outsiders. The sensitive issues, such as the gender equality, can be 
mentioned in the reports, but rarely with specific data. The traditional culture prevents Japan 
from the complete convergence with the global trend, despite of the growing number of 
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Japanese companies following Europe and the United States to publish sustainability reports 
(Kanji Tanimoto and Kenji Suzuki, 2005). 
6. Conclusion 
The paper concentrates on analysing the disclosure quality of information in the 
sustainability reports of the largest firms in seven countries in the forest and paper industry in 
2013. The limitation of the sample’s small size is unavoidable due to the limited choices of 
large firms publishing sustainability reports in 2013. On the other hand, there are some vital 
implications which still can be withdrawn, and they are not limited only in the sector of forest 
and paper industry. Firstly, we can see that higher level of development of social and 
environmental awareness in a country does not accompany with the disclosure quality. The 
best illustrations are Sweden, Canada and the United States. The only developed nation, 
revealing the high quality in corporate social responsibility reports, is Finland, which can be 
deemed to have reached a real success to some extents in integrating the sustainable 
development with the core business. Among seven countries, Japan seems to be affected 
mostly by conventional culture. Although it is one of the economies following the trend of 
sustainability reporting most enthusiastically, Japan still has a long way to go to apply 
sustainability reporting usefully. 
 In the context of the forest and paper sector, due to its nature of depending largely on 
natural resources and relating closely with local communities, sustainability reporting plays 
an extremely necessary role in evaluating the impacts on environment of business operation. 
The large corporations probably understand this thing clearly, and they use the most of their 
sustainability reports revealing the advanced technology, new applied standards, investment 
in projects to support the local communities. It may be a positive sign, but people should not 
be too optimistic about what is shown in the data published by them. Due to the voluntary 
nature of corporate social responsibility reports, it is reasonable to believe that most of the 
businesses only show what they want the public to know. 
Another meaningful conclusion is that the increasing quantity of sustainability reports 
does not ensure the high quality of information disclosed. As a big picture, there is an 
imbalance between social and environmental data shown in the reports. The social issues 
disclosure is being deemed as a compulsory responsibility, which must be included in the 
report, rather than a necessary and useful part. The gender equality, as one of the most 
unclear aspects of the sample reports, is a typical illustration. In fact, this social issue has 
been a conventionally debated issue in all sectors, and the forest and paper manufacturing is 
not an exception. It is not easy to find a solution to this problem, simply because it has been 
mentioned for a long time, but still appears in almost every nation, every sector in the world, 
in spite of strong efforts of activists, governments, and people against the sexual 
discrimination. However, from our point of view, the stronger regulation on the requirements 
of data disclosure may be an appropriate approach to some extents. The biggest hurdle is 
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possibly the disapproval of business communities with the excuse that the salary is not the 
only indicator of gender equality. On the other hand, if the governments could mandate firms 
to publish data on salary differences between men and women, it would be a vital turning 
point. As a manager answered the interview in the paper of Kate Grosser and Jeremy Moon 
(2008, p.12): “If you uncover something, you have to put it right”. The pressure from 
stakeholders, such as customers and non-government organization, will be the motivation for 
firms to improve the performance of gender equality. And this is when the original purpose of 
sustainability reporting is really achieved. Nevertheless, the mandatory regulation is not the 
only applicable answer. More than any official law, the high awareness of important 
stakeholders, such as customers and shareholders, is the strongest driver to make companies 
disclose data and try to reduce sexual discrimination. The answer to this puzzle must be a 
combination of efforts from all parties, and the target of equal treatment in working place 
cannot be reached in the short term. 
Last but not least, the pulp, paper and forest industry is still at an early phase of 
developing and participating in Industry 4.0. In order to take advantage of the key future 
opportunities, companies should take some of the following steps first. The industry players 
ought to seek greater collaboration with suppliers, customers and other stakeholders in the 
development of their jointly-funded Industry 4.0 pilot projects. In other words, 4.0 strategies 
should be set up not only at one firm, but also in the whole value chain. Firms should unfold 
their accumulated skills and experiences and clearly communicate with other participants in 
the whole value chain. Finally, firms should be proactive to identify the opportunities related 
to Industry 4.0, integrating smart technologies into their strategic management. 
To conclude, the trend of sustainability reporting has been motivated by a number of 
drivers. Its positive effects on the disclosure of social and environmental information are 
undeniable, but the achievement of optimal usefulness is still in progress. It is apparent that 
any firm making applying sustainability reporting hopes to raise their credibility with 
stakeholders. However, the key point is whether they provide accurate information or not. 
The assurance of auditors can partly verify the accuracy of data, but one should bear in mind 
that even with financial auditing with a much longer history, the result is only relatively 
objective. Furthermore, not all firms accept to increase operating expense to employ external 
auditors. Next, it is crucial that the corporations themselves use sustainability report scheme 
to improve their performance in promoting sustainable development. Finally, we offer some 
of the 4.0 initiatives that firms should implement to become paper and forest market leaders 
in the age of automation and digitalization. 
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