Trends and Patterns in Sustainability Reporting: A Content Analysis of Icelandic Banks‘ Sustainability Reports

The pressure from society, investors, and other stakeholders for companies to report on sustainability has increased throughout the years. Previously companies of certain types were required to report on sustainability related matters, based on the EU Non-financial Reporting Directive (NFDR, but were able to choose their preferred sustainability standards or guidelines to report with. With the Corporate Sustainability Reporting Directive (CSRD), set by the European Union (EU), reporting using the European Sustainability Reporting Standards becomes mandatory. It should be noted that the CSRD replaces the EU Non-financial Reporting Directive (NFDR) which was introduced in 2014 but came into effect in 2016 in Iceland. The CSRD includes comprehensive reporting standards, the European Sustainability Reporting Standards (ESRS), that companies will have to follow when disclosing sustainability related information. The objective of the thesis is twofold. Firstly, to examine the content of sustainability reports of the three biggest commercial banks in Iceland and see how closely the information in the current reports fulfil the requirements of the ESRS standards. Secondly, to investigate whether some inconsistencies in disclosed sustainability information and actual performance among the three banks can be found. The content of the sustainability reports was analysed by employing content analysis, the data was colour coded based on the comprehensiveness of the information found in the sustainability reports and presented in corresponding analytical frameworks. The results suggest that certain sustainability topics are prioritised, whereas some other topics seem to be overlooked. Topics that receive the most attention within all three banks are climate change, business conduct, and the banks’ own workforce. Topics that need to be paid closer attention to if the objective is to fulfil the ESRS include pollution, workers in the value chain, and affected communities. The theoretical implication of the study demonstrates a gap within sustainability reporting among Icelandic banks based on requirements of the Corporate Sustainability Reporting Directive (CSRD) and the subsequent ERSR standards. The thesis provides an insight into the preparedness of Icelandic banksto comply with the European Sustainability Reporting Standards and contributes to the literature of a new era of sustainability reporting. Keywords: sustainability reporting, corporate sustainability reporting directive, European sustainability reporting standards, content analysis, Icelandic bank