Reporting on long-term value creation by Canadian companies: A longitudinal assessment

In the wake of the global financial crisis, a new wave of stakeholder demands has developed calling on companies to shift focus towards long-term value creation and moving away from a short-term earnings emphasis. Aligned with these demands, urgent calls for more transparency and improved reporting on both financial as well as non-financial reports have been made. The objective of this study was to analyze longitudinal disclosure quality and quantity trends in reporting on long-term value creation of 19 publicly traded Canadian energy and mining companies. Content analysis was conducted in order to assess disclosure on long-term value creation in annual financial and sustainability reports. The empirical results show that the companies experienced a substantial increase in the reporting disclosure quality and quantity. This was true for both disclosure in the annual financial reports as well as in the sustainability reports. These results supported the hypotheses that Canadian public energy and mining companies had increased their quantity and quality of long-term value creation disclosure in 2014 as compared to 2012. Even though increases in disclosure quality could be observed (especially in the areas of governance, responsible work practices, outside relationships and risk management), overall disclosure quality (especially in areas such as connectivity between financials and sustainability sections, materiality analysis, projects with high climate risk exposure, cost of energy, responsible work practices, incentives and remuneration) were still at a low level. Therefore, recommendations were developed to introduce globally accepted reporting standards and an external assurance framework in order to restore and sustain stakeholder confidence and trust. In the short-term, a collaborative approach of reporting framework development was proposed while in the long run, mandatory implementation of global standards and assurance is urgently recommended. This early mover study contributes to the existing literature by providing a first of its kind longitudinal analysis of quality and quantity of long-term value creation reporting for publicly listed Canadian companies in the mining and energy industry sector.