Incorporating Local Communities into Sustainability Reporting: A Grey Systems-Based Analysis of Brazilian Companies

This paper aims to evaluate the maturity of Brazilian companies regarding the inclusion of local communities in sustainability reporting. The analysis was based on sustainability reports from a sample of 26 companies listed on the Brazilian stock exchange sustainability index. The study employs a mixed-methods approach and includes the following sequential steps: literature review and content analysis of sustainability reporting standards to identify critical success factors; application of the CRITIC method to define weights for decision criteria; analysis of corporate practices related to the inclusion of local communities in sustainability reports performed by Brazilian companies to determine maturity levels using the Grey Fixed Weighted Clustering method and the Kernel technique. The findings reveal that transparency, comprehensive assessment, and accountability are the most critical factors of sustainability reporting maturity regarding local communities. The analysis shows that companies in the energy sector perform better and can serve as a benchmark for companies in other sectors, such as manufacturing, in which most companies present low maturity. Key corporate practices are identified and discussed for improving engagement with local communities aiming to enhance corporate social responsibility and sustainability reporting. This study advances the understanding of corporate sustainability by highlighting the role of businesses in fostering socio-economic development through the inclusion of local communities in sustainability reporting. It extends theoretical discussions on corporate social responsibility by emphasizing transparency, accountability, and comprehensive assessment as critical factors for sustainability reporting. Practically, the findings provide insights for companies seeking to enhance engagement with local communities, offering a benchmark for industries with lower maturity levels. By demonstrating how sustainability reporting can serve as a strategic tool for social impact, the study reinforces the broader role of businesses in sustainable development.