The Effects of Publicly Disclosing the Corporate Sustainability Management Practices on its Stakeholders' Satisfaction and Trustworthiness to the Corporations

This study examined effects on stakeholder satisfaction and reliability and how stakeholders become aware of by disclosing sustainability management public activities being promoted or has been promoted by a corporate through empirical analysis. The study examined effects on satisfaction and reliability by examining level of awareness on growth index, profit index along with governance, risk management corresponding to economical activities and environment management, responding to climate changes, green products, green logistics corresponding to environmental activities and finally social contribution, human rights protection, consumer information protection, growth with partners corresponding to social activities out of sustainability management. The study also examined effects according to demographical characteristics and types of life styles. Subjects for study were employees of LG Household & Health Care a manufacturer of consumer goods, partners, institutional investors and consumers using Google Docs program and conducted surveys on 43 items and study period was from Nov 10 to 30 of 2011 through online. Hypothesis was verified using SAS statistics program for empirical analysis and statistical methods applied was regression analysis and correlation analysis and variance analysis. The results from this study can be summarized as followings. First, the effects on stakeholder satisfaction by disclosing performance of sustainability management were analyzed as having positive (+) effects on stakeholder satisfaction by all factors of economical, environmental, social activities which are triple bottom lines of corporate sustainable activities. The study showed that the awareness on performance especially on environmental responsibilities affected greatly in stakeholder satisfaction. Second, the effects on stakeholder reliability by disclosing performance of sustainability management were analyzed as having positive (+) effects on stakeholder satisfaction by all factors of economical, environmental, social activities which are triple bottom lines of corporate sustainable activities. The study showed that the awareness on performance especially on social responsibilities affected greatly in stakeholder satisfaction. Third, the effects on stakeholder satisfaction and reliability on the awareness of performance of sustainability management according to the types of stakeholder did not show meaningful results. The awareness on performance of sustainability management was higher for employees than other stakeholders thus forecasted that satisfaction or reliability according to this would be high but could not find meaningful differences between stakeholder groups but showed higher satisfaction from shareholders and institutional investors. This is believed that the disclosure of sustainability management is required for institutions for analyzing, evaluating and making investments on corporate and providing information. Fourth, disclosed data on sustainability management was analyzed as having significantly positive (+) effects on third party verifications and reliability. The study showed that reliability on environment and social data was high. This is because there are hardly any reports on disclosed corporate environmental and social contributions and the contents were at the level of promotional materials by corresponding organizations while reports on sustainability management published by third party verifications were trusted more. Fifth, the relationship between stakeholder satisfaction and reliability on sustainability management showed no statistically meaningful results between two groups after analyzing satisfaction and reliability between groups with high interest and low interest in sustainability management. The effects on stakeholder satisfaction and reliability on the awareness and the interest on performance of sustainability management showed that the interest on sustainability management has no meaningful effects. In conclusion, the awareness on performance of sustainability management (economical, environmental, social responsibilities) has significant effects on stakeholder satisfaction and reliability but the interest on sustainability management on stakeholder satisfaction and reliability did not show any statistically meaningful results. This is interpreted as the group with interests in sustainability management was not satisfied relatively against the results after becoming aware because satisfaction and reliability by this group is already high by performance perceived in advance.