This paper explores sustainability reporting in the Australian Commonwealth public sector through the focus on departments with a primary responsibility for social and environmental issues. The research moves beyond existing theorisation for social and environmental reporting and adopts new institutional theory in order to assess the extent to which coercive, mimetic and normative influences impact sustainability reporting in the public sector. The practices of the two selected departments for this study are assessed through interviews and documentary data. Our findings are consistent with new institutional theory but also highlight the impact of internal perspectives on public sector sustainability reporting.
Research into sustainability reporting has emerged to prominence as a result of the increasing emphasis on social and environmental issues in contemporary society (Unerman et al, 2007). Even though the focus of sustainability reporting is on organizations, the majority of the literature has concentrated on the corporate sector (see for instance, Patten, 1992, Gray et al., 1995, Deegan and Bloomqusit, 2006, De Villiers and Van Staden, 2006, Cho and Patten, 2007, Aerts and Cormier, 2009).
Legitimacy theory (Dowling and Pfeffer, 1975, Lindblom, 1993) has been used to explain the motives for sustainability reporting in the private sector (Deegan, 2002, 2007). A number of studies have emerged over time which highlight that companies seek to legitimise their existence to society by voluntarily disclosing social and environmental information in a range of media (see for instance, Patten, 1992, Deegan & Gordon, 1996, O’Donovan, 1999, 2002, Wilmshurst and Frost, 2000, Cormier and Gordon, 2001, Lodhia, 2005, De Villiers and Van Staden, 2006, Cho and Patten, 2007, Aerts and Cormier, 2009, Tilling and Tilt, 2010)
There is clearly a lack of literature into public sector sustainability reporting (Ball and Grubnic, 2007), even though the public sector provides a theoretically useful context for such research. Public sector settings face particular forms of visibility and demand for legitimacy. In addition to the voluntary pressures from society for responsible behaviour that corporations usually face, sustainability reporting in the public sector could also be subject to mandatory pressures such as regulation. For instance, in Australia, there is a mandatory requirement for Commonwealth Federal government departments for sustainability reporting. Moreover, public expectations are expected to be significantly higher for public sector entities when compared to the private sector (Ball and Grubnic, 2007). Whist private sector entities have useful voluntary mechanisms such as the Global Reporting Initiative (GRI) to guide reporting (GRI, 2006), these principles could also be used in the public sector. More recently, the Public Agency Sector Supplement (PASS) for the GRI was developed to provide guidance to public sector entities on sustainability reporting. These developments suggest that sustainability reporting in the public sector is subject to both voluntary and mandatory pressures and requires a need for extensions to the existing theorisation of sustainability reporting.
It is argued in this paper that legitimacy theory explanations are inadequate in providing a complete understanding of the influences on sustainability reporting in the public sector. Using a case study of the Australian Commonwealth public sector, the paper investigates a range of possible influences on their sustainability reporting practice. In line with Larinaga-Gonzalez (2007) and Ball and Craig (2010), the paper applies Neo-institutionalism to social and environmental accounting research. New Institutional theory (Meyer and Rowan, 1977; DiMaggio and Powell, 1983, 1991; Scott, 1987, 2008; Carruthers,...