Developing a water disclosure index for the food, beverage and tobacco industry: an integrative perspective

PhD (Management Accountancy), North-West University, Potchefstroom Campus, 2019This study was performed on water disclosures in the food, beverage and tobacco industry ? against a backdrop of a growing population and increased water scarcity. The intensity of water use in agriculture, and the fact that water is used throughout the food production chain, brought about the interconnection between water, energy and food ? recognised as the water, energy and food (WEF) nexus. Moreover, stakeholders are demanding to be better informed about the economic, social and environmental impacts of business, and have become increasingly aware of water as a scarce resource. In this sense, sustainability reporting has become an important mode of discourse to firms to report on the triple bottom line (TBL). However, moving away from individual, stand-alone reports, brought about the combination of financial and non-financial information into one report ? known as an integrated report. Water was identified as part of natural capital, and an organisation should provide insight through integrated reporting (IR), about how these resources are used and affected. This study took on an integrative perspective to determine whether the concept of integrated thinking and IR were associated with improved water disclosures in the food, beverage and tobacco industry. Additionally, non-probability, purposive sampling was utilised to select firms from the Johannesburg Securities Exchange (JSE) in South Africa, the ASX in Australia, and global companies listed on the Dow Jones Global Sustainability Index (DJGSI) in the food, beverage and tobacco industry ? in order to compare the water disclosure practices of the three groups. South Africa and Australia are water scarce countries, and a global perspective was added by including firms listed on the DJGSI. A mixed methods research strategy was utilised, as qualitative and quantitative data was collected simultaneously from the integrated, sustainability or environmental reports. In this sense, the research strategy was acknowledged as concurrent and integrative, with a dominant quantitative character. Manual content analysis was implemented as the research design, and qualitative observations from the analyses informed the abductive reasoning research approach. From the literature review, a water disclosure index was developed in three phases ? and was utilised as the measuring instrument. A three-point assessment scale, with a quality description for each element in the water disclosure index, was developed in order to improve the accuracy towards coding every item. Each element in the water disclosure index was deliberated at a colloquium of experienced persons, followed by pilot coding, and a subsequent discussion of the results ? before further analyses commenced. Various hypotheses (Hmain, H? to H?) were formulated from the literature review to evaluate whether IR and integrated thinking, had any value in terms of water reporting. After the water disclosure index was developed, the hypothesis of each construct was further refined. T-tests, Spearman's correlation, and multiple linear regression were implemented as data analyses techniques to test the various hypotheses. Control variables, firm size, assurance, conciseness, and countries were included in the regression analyses, to control for interventions. In order to compare the firms listed on the three indices with each other, analysis of variance (ANOVA) was implemented ? and when significant differences were identified ? Tukey's test was utilised to indicate significant differences. The quantitative results were accompanied by fundamental qualitative observations from the reports throughout the presentation of the findings ? which inferred the conclusions, recommendations and contributions of the study. Improved water-related disclosure was evident from the findings, with the IR group outperforming the non-IR firms in terms of overall performance measured against the entire water disclosure index. Firm size had a unique relationship within the regression model towards total water disclosure, which implied that larger companies produced improved water reporting practices. Significant differences were apparent between the water disclosures among the three groups, which announces the difficulty to compare among countries or firms. The interrelated nature and connection of water reporting practices between the constructs in the water disclosure index were evident, especially when firms were able to disclose on water strategies and future-orientated water information. Companies operating in the food, beverage and tobacco industry should recognise water as a material aspect as an inception process to water disclosures, and an integrated approach or the implementation of IR ? should be purposefully considered. Firms should realise their impact on one another and should drive sustainable water disclosures in their entire supply chain. Subsequent to the empirical analyses, an improved water disclosure index was developed. This water disclosure index should be implemented by firms operating in the food, beverage and tobacco industry, in order to combine the most essential water-related aspects into a holistic and comparable report, which would provide stakeholders with forward-looking and strategic water information. Moreover, the study contributed by confirming that an integrative disclosure approach is fundamental to effective water disclosures in the food, beverage and tobacco industry ? and an integrative disclosure theory is proposed.Doctora