5.4.1 Types of Hypothesis
Hypotheses can be stated either in the null or alternative form. Null hypotheses are statements that are expressed as a definitive, exact relationship between two variables with no significant relationship between the variables. Whilst alternative hypotheses are the opposite of the null, they are statements expressing a relationship between two variables or indicating differences between groups (Cavana et al. 2001). For the purposes of this research, both null and alternate hypotheses were developed as guided by prior literature.
5.4.2 Linking the Hypotheses to the Mail Survey Questions
The first research question in this study sought to determine the extent to which sustainability is being reported in the local government sector in Australia. Hypotheses 1, 2 and 3 have been developed to respond to this research question. As a result of previous research (Farneti and Guthrie 2009; Herbohn and Griffiths 2008; Jigsaw Services 2004; Potts 2004), it is expected that whilst sustainability reporting in the local government sector may be minimal, local governments in Australia do, in fact, report on sustainability. Consequently, Hypothesis 1 is stated as follows.
113 H1: Sustainability reporting is undertaken by local government organizations in
Australia.
To test this hypothesis, the responses to questions 5, 6 and 7, and questions 36 and 37 in the mail survey were analyzed3. These questions were as follows.
Do you report any voluntary sustainability information to your external
stakeholders? (Q5)
In what year did you commence reporting this voluntary information? (Q6)
Why did you report this information? (factors provided) (Q7)
What is the likelihood that in the future you will report voluntary sustainability information to your stakeholders? (Q36)
If you plan on reporting voluntary sustainability information in the future, compared to previous years, will the information be reduced, similar or expanded? (Q37)
It is anticipated that whilst sustainability reporting is being conducted in the local government sector in Australia, there will be no consistency in the choice of reporting media used to report this information. This expectation is consistent with prior research (Farneti and Guthrie 2009; Herbohn and Griffiths 2008; Jones et al. 2005). Hypothesis 2 is stated as follows.
H2: There is no consistency in the choice of media used to report sustainability information across the local government sector in Australia.
To test this hypothesis, the responses to questions 8 and 9 were analyzed. These questions were as follows.
How important are each of the following reporting medium to your organization
in reporting information to your stakeholders? (Q8)
114
In what reporting medium(s) is your organization’s voluntary sustainability information being reported? (Q9).
It is believed that local government organizations may focus on a particular component of sustainability reporting rather than focus on an integrated approach. This expectation was derived from prior research (GRI 2004; ICLEI 2001; Lewis 2000; Whittaker 1996), which found that there was an emphasis towards environmental sustainability reporting. Thus, Hypothesis 3 is stated as follows.
H3: The focus of sustainability reporting across the local government sector in Australia is an integrated approach to sustainability, focusing on environmental, social and economic factors.
H3 was sub-divided to capture each of the elements of sustainable development as follows.
H3A: The focus of reporting across the local government sector in Australia is environmental sustainability.
H3B: The focus of reporting across the local government sector in Australia is social sustainability.
H3C: The focus of reporting across the local government sector in Australia is economic sustainability.
To test these hypotheses, the responses to questions 10 and 11 in the mail survey were analyzed. These questions were as follows.
How important is each of these voluntary sustainability reporting approaches to your organization? (Q10)
For the most important approach, please explain why you consider it is more important for your organization in comparison to the other approaches (Q11).
115 The second research question investigated whether there were any differences in the level of sustainability reporting between urban and rural local governments in Australia. No known research has investigated integrated sustainability reporting from a rural viewpoint and the differences between urban and rural sustainability reporting. LA21 studies were reviewed and it was found that there was a limited number of local government studies that focused on one component of sustainability, environmental. These studies (Pini et
al. 2007; Bajracharya and Khan 2004; Kupke 1996) provide insights into the differences
in urban and rural up-take of LA21 processes. Based on these differences, it is expected that there will be differences in the levels of sustainability reporting between urban and local governments. Accordingly, Hypothesis 4 is stated as follows.
H4: There will be a significant difference in the levels of sustainability reporting between urban and rural local government authorities in Australia.
To test this hypothesis, the responses to questions 4, 5, 12 and 13 were analyzed. These questions were as follows.
According to the Australian Classification of Local Government (ACLG),
o What classification is your organization?
o What is the residential population of your local government area? (Q4)
Do you report any voluntary sustainability information to your external
stakeholders? (Q5)
In view of your organizations priorities and commitments, how important is reporting on sustainability to your organization? (Q12)
How significant is each of the following factors in restricting or preventing sustainability reporting in your organization? (Q13)
The third research question seeks to determine the key factors that help to bring about sustainability reporting in local government in Australia. Based on prior research, (Farneti and Guthrie 2009; Sciulli 2011; Herbohn and Griffiths 2008; Hughey and
116 Coleman 2007; Dickinson et al. 2005; Marcuccio and Steccolini 2005; Jigsaw Services 2004; Vandenberg 2002; Ministry for the Environment 2002) it is expected that there will be two primary factors driving the establishment of sustainability reporting in Australia. Consequently, Hypotheses 5 and 6 are stated as follows.
H5: Key leadership support is necessary to drive the establishment of sustainability reporting in local government authorities.
To test this hypothesis, the responses to questions 14 and 15 were analyzed. These questions were as follows.
How important is key leadership support in the establishment of voluntary sustainability reporting practices? (Q14)
At what level does key leadership support need to originate? (Q15)
H6: Stakeholder engagement is critical to the successful establishment of sustainability reporting in local government authorities.
The questions that relate to Hypothesis 6 were questions 16 and 17. These questions were as follows.
How important is stakeholder engagement in the establishment of voluntary sustainability reporting? (Q16)
Which stakeholders are important to engage with in the establishment of
voluntary sustainability reporting practices? (Q17)
The fourth research question explored the issue of whether there is a lack of accounting expertise being utilized in sustainability reporting in local government in Australia. Based on prior research (Farneti and Guthrie 2009; Sciulli 2011; Herbohn and Griffiths 2008; Ball 2005, 2002; Ball and Seal 2005; Dickinson et al. 2005; Telford 2005; Bowerman and Hutchinson 1998; Whittaker 1996), it is expected that accountants will have a minimal involvement in the preparation of sustainability reports. Accordingly, Hypothesis 7 is stated as follows.
117 H7: Accountants are not being utilized in the sustainability reporting process by
local government authorities in Australia
To test this hypothesis, the responses to questions 19 to 23 were analyzed. These questions were as follows.
Which department prepares your voluntary sustainability report/information?
(Q19)
Were accountants utilized in preparing the sustainability report/information? (Q20)
Why are accountants used in the sustainability reporting process? (factors listed) (Q21)
What level of involvement has the accountant in the sustainability reporting process? (Q22)
Why do you not use accountants in the sustainability reporting process? (Q23)
The fifth research question was concerned with what sustainability frameworks are currently being used in local government in Australia. Hypotheses 8, 9, 10 and 11 were developed to respond to this research question. Research that has been conducted in Australia is restricted to a small number of case study projects where it was found that local authorities are utilizing different frameworks (Herbohn and Griffiths 2008; Marr 2006; Potts 2004). The research conducted, though, is limited in both number of case study projects and number of participants in each case study (for example, Herbohn and Griffiths 2008; Marr 2006; and Potts 2004 examined a maximum of four local authorities each). Therefore, international research was examined to provide a wider viewpoint of this issue. Dickinson et al. (2005) found that the dominant framework used by mail
survey respondents was the GRI framework (confirmed in Dumay et al. 2010) with 70%
of respondents having heard of the guidelines and 50% of respondents having referred to this framework. Further, whilst this mail survey was conducted from an international perspective, it is interesting to note that 55% of respondents were from Australia.
118 For this current research study, it is predicted that this international trend will continue when Australian local organizations are examined from a wider perspective. It is expected that the leading framework in Australian local government will also be the GRI framework. Therefore, Hypothesis 8 is stated as follows.
H8: Local government authorities in Australia utilize the GRI framework in their sustainability reporting practices
To test this hypothesis, the responses to questions 25 to 28, and question 33 in the mail survey were analyzed. These questions were as follows.
Have you heard of the Global Reporting Initiative (GRI) or the GRI Public Agency Sector Supplement (PASS)? (Q25)
Do you use the GRI or PASS recommended guidelines in preparing the external
voluntary sustainability reports? (Q26)
How important are the GRI and PASS in the preparation of your voluntary sustainability report/information? (Q27)
Why do you use the GRI/PASS guidelines? (factors listed) (Q28)
Do you refer to any other reporting guideline(s) in the preparation of your voluntary sustainability report/information? (Q33)
It was anticipated that there would be a lack of consistency in the reporting indicators being utilized in sustainability reporting as found in prior research (Tort 2010; Sciulli 2009; Guthrie and Farneti 2008; Herbohn and Griffiths 2008; Lamprinidi and Kubo 2008; Mladenovic and van der Laan 2007; Mercer and Jotkowitz 2000). Thus, Hypothesis 9 is stated as follows.
H9: There is no consistent core of reporting indicators being utilized in sustainability reporting by the local government sector in Australia.
119 To test this hypothesis, the responses to questions 31 and 32 in the mail survey were analyzed. These questions were as follows.
How important do you consider the reporting of each of the following elements in
regards to voluntary sustainability reporting to your external stakeholders? (Q31)
Of those reporting elements considered most important, how significant is each of
the following factors in explaining why they are important to your organization? (Q32)
Hypothesis 9 leads to the development of Hypothesis 10. With Guthrie and Farneti (2008) concluding that the GRI framework is too generic for all public sector organizations, it is anticipated that the lack of consistency in reporting elements is due to the GRI reporting framework not being specific to the needs of local government in Australia. Thus, Hypothesis 10 is developed as follows.
H10: The GRI reporting framework is not specific to the needs of the local government sector in Australia.
To test this hypothesis, the responses to questions 24, 29 and 30 in the mail survey were analyzed. These questions were as follows.
What type of reporting method(s) do you predominantly use in reporting
voluntary sustainability information? (Q24)
How important is each of the following factors in restricting the use of either or both of these guidelines? (Q29)
How important are each of the following factors in explaining why you do not utilize the GRI or PASS recommended guidelines? (Q30)
Prior research has indicated that the term sustainable development has different meanings to different users (Farneti and Guthrie 2009; Guthrie and Farneti 2008). It is expected that no consistent definition of sustainable development is being utilized in local government in Australia. Therefore, Hypothesis 11 is developed as follows.
120 H11: There is no consistent definition of sustainable development being used by local government authorities in Australia.
To test this hypothesis, the response to questions 34 in the mail survey were analyzed with further explanation of why authorities are using particular definitions provided in question 35. These questions were as follows.
What definition of sustainable development do you use to guide the preparation of
your voluntary sustainability report/information? (Q34)
How important is each of the following factors in explaining why you have chosen this definition of sustainable development? (Q35)
To provide additional insight into sustainability reporting in local government in Australia, interviews were conducted. The process undertaken in planning and undertaking the interviews will now be examined.