University of Vaasa - Vaasan yliopisto

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None of the companies analyzed has explicitly integrated sustainability into financial
value drivers (Phase 3) so far. However, there were some indications that the phase 2
level companies are developing processes in the direction of phase 3. Examples of
this kind of information are reported discussions on sustainability risks and
opportunities in terms of business strategy, achievement of targets and direct cost
information such as, environmental costs and liabilities, and integration of
sustainability data management to financial data management systems.
For further analysis we went through all the sustainability performance indicators
disclosed in their sustainable reports/annual reports by the sample firms in order to
recognize their value relevance. We limited our analysis to the sustainability
performance indicators which have most use in financial valuation and where a
logical link between sustainability performance and financial performance can be
recognized. When analyzing financial value relevance of sustainability performance
indicators, we utilized the definitions provided by the Finnish Accounting Board
(FAB). In the General Guidance[3] the FAB recommends the disclosure of
sustainability-related performance indicators and other information in the Review of
Operation, when this information is material for financial reporting purposes. In the
FAB guidance the materiality principle for sustainability performance indicators is
expressed in financial terms (table 3 below). The general guidance recommends
disclosure of environmental and social performance indicators and other information
when it is relevant in order to gain and understand a “true and fair view” of the
company’s financial performance, financial position, business development and
achievement of long-term financial targets.
According to the general guidance given, all relevant environmental and employeerelated
sustainability information should be disclosed in the Review of Operations
when this information is material in order to understand company’s financial
situation and factors having impact on business in the future. For this purpose the
general guidance defines 24 sustainability performance indicators as potential
financial value drivers. Of these indicators 20 represent the same sustainability
aspects and performance indicators as defined in the GRI guidelines. These 20
indicators are listed in Table 3, which provides also some examples where the
financial value relevance for each indicator comes from.