Companies, regulators, and stakeholders shape sustainability reporting

Sustainability reporting may appear primarily as a compliance requirement or communication practice, but behind reporting requirements lies a longer process through which practices and expectations develop and gradually become established. In her doctoral thesis, Piia Korri studies the factors shaping the institutionalisation of sustainability reporting.

Political priorities differ across jurisdictions, contributing to different regulatory environments for sustainability reporting. In the U.S., sustainability reporting is less regulated at the federal level than in the EU.

“When reporting is less standardised, there is more room for corporate culture to influence disclosure practices and ESG ratings, potentially affecting investors and others who rely on this information,” Korri explains.

Regulatory differences across jurisdictions do not, however, mean that firms are influenced only by the rules of their home jurisdiction. Korri finds that regulation can also have cross-border effects: following the implementation of the EU’s Non-Financial Reporting Directive, U.S. firms with EU subsidiaries showed greater improvements in sustainability transparency and performance than the comparison firms.

“Foreign subsidiaries can expose multinational firms to regulatory developments outside their home jurisdiction. These effects can extend to the parent company, even when it falls outside the regulation’s direct scope,” Korri says.

Even in the EU, where sustainability reporting has become increasingly regulated over time, standardisation involves trade-offs. Stakeholders involved in developing sustainability reporting standards bring different priorities and perspectives to the process. This can create tensions between ambitions for broader change and established ways of working, as well as between flexibility and more prescriptive reporting requirements.

“The same requirements can support the aims of some stakeholder groups while imposing costs or constraints on others,” Korri explains.

Overall, the findings show that sustainability reporting is shaped by several factors: corporate culture and practices, the cross-border spillover effects of regulation, and interactions among stakeholders involved in standard-setting.

You can read the whole thesis here: Essays on the Institutionalization of Sustainability Reporting

More information:

Piia Korri
E-mail: piia.korri@hanken.fi

Piia Korri will defend her thesis “Essays on the Institutionalization of Sustainability Reporting” on 28 August 2026 at noon at Hanken School of Economics, Arkadiankatu 22, Helsinki. The doctoral defence will be held on site in auditorium Futurum and will not be available online.

Opponent: Laura Muro, professor of accounting and international business sustainability, Saint Louis University Madrid
 Custos: Hanna Silvola, associate professor, Hanken School of Economics