From the fiscal year of 2017 and onwards, large companies in Sweden will be obligated by
law to publish a sustainability report. Amendment (2016:947) to the Annual Account Act
(1995:1554) is based upon an EU directive, which aims to create transparency and openness
among companies. The amendment will affect about 1600 Swedish companies and aims to
make companies more transparent and thus consider how their businesses affect the world.
Scandals and crises from all over the world are contributing to the increasing demands and
expectations on companies taking responsibilities for their actions. The sustainability reports
aims not only to help companies operate a more sustainable business, but also to
communicate their sustainable progress to stakeholders. Sustainability is a current issue and
poses major challenges for companies, at which the amendment aims to respond. Hence the
research question is: how does the amendment (2016:947) to the Annual Account Act
(1995:1554) affect the sustainability reporting of large companies? To answer the research
question we have assumed a qualitative method with inductive approach. An empirical study
has been conducted with both visit and telephone interviews with six respondents responsible
for the sustainability reporting on six different companies affected by the amendment. An
additional three interviews have been conducted with auditors working with advisory and
review of sustainability reports. The study shows that the largest companies are unlikely to be
affected by the amendment due to the fact that they are already producing a detailed
sustainability report. The smaller of the companies concerned and the companies that are
unlisted will probably need to either develop the existing report or start up a sustainability
report from scratch. When establishing a sustainability report, companies experience
problems regarding validation and assurance of the published information. The study shows
that auditing would be effective in response to this challenge, but auditing is not statutory for
the sustainability report. As external demands and expectations are increasing, the
implementation of sustainability in the businesses of companies is growing in importance.
The study shows that since more companies are obligated to produce a sustainability report,
the sustainable activities of the company will evolve, which ultimately leads to a more
sustainable development.