Sustainability Disclosure after a Crisis: A Text Mining Approach

This research investigates what happens to sustainability disclosure in the light of an industrial disaster. Drawing from legitimacy theory, the disaster is treated as a moment of crisis, in which the relationship of trust between the company and its stakeholders suffers and has to be reconstructed to legitimise the company's operations once more. While past studies revealed an increase in corporate disclosure after a disaster, the authors' results highlight a different behaviour. The analysis focuses on six companies involved in industrial disasters with a global media coverage, before and after the event. The sample includes, among others, Tepco for the leakage of nuclear material from the Fukushima power plant and Carnival Cruise Corporation in relation to the sinking of the Costa Concordia. Findings obtained using text mining techniques suggest that there is a tendency to reduce the quantity of information provided in the year of the disaster, which represents a precise managerial strategy aiming to avoid further drops in corporate legitimacy.