Abstract
To provide a fair view of their sustainability performance, companies are supposed to report on their ESG contributions. However, as reporting controversial ESG incidents can damage reputations, it is questionable how detailed such incidents are disclosed. To address these questions, we use conceptual content analysis to examine the disclosure of 190 controversies from the pharmaceutical and textile industries, covering a three-year period from 2018-2020. Our findings show that ESG incidents are usually only disclosed if they concern very sensitive issues or if litigation is expected. Moreover, we find that most controversies are only reported in the annual report. The quality of disclosure is comparably higher in the pharmaceutical industry than in the textile industry, and neither independent assurance nor the application of sustainability reporting standards seem to positively impact the disclosure behaviour. Our findings contribute to a deeper understanding of sustainability reporting and offer important implications for practitioners and policy-makers.