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1 – 10 of over 32000R.N.K. Soysa, Asankha Pallegedara, A.S. Kumara, D.M. Jayasena and M.K.S.M. Samaranayake
Although publicly listed firms in Sri Lanka have been increasingly adapting sustainability reporting into their annual reporting practices, a limited number of firms prepare…
Abstract
Purpose
Although publicly listed firms in Sri Lanka have been increasingly adapting sustainability reporting into their annual reporting practices, a limited number of firms prepare sustainability reports by integrating sustainable development goals (SDGs) into reporting mechanisms. This study attempts to develop an index to monitor firms' sustainability reporting practices based on Global Reporting Institute (GRI) guidelines integrating SDGs.
Design/methodology/approach
This paper develops a sustainability score index using the 17 SDGs utilising the results of content analysis of corporate annual reports of a selected sample of 100 firms listed on the Colombo Stock Exchange (CSE). Principal component analysis was employed to examine the reliability of data in the developed index.
Findings
Findings show that the developed scoring index is efficient for evaluating the contents of the sustainability reports of Sri Lankan firms. Sustainability reporting practises with regard to the SDGs were observed to have a turbulent period from 2015 to 2019 and the SDGs 12 and 15 were identified to be mostly reported in Sri Lankan corporate sustainability reports.
Research limitations/implications
The results of the study add to knowledge on the monitoring of sustainability reporting practises with reference to SDGs. The study outcomes are useful for the investors, stakeholders, and statutory bodies to measure the sustainable performance of business firms and assess the firm’s commitment towards the global sustainability agenda.
Originality/value
To the best of our knowledge, this is the first study that constructs a sustainability reporting score index integrating SDGs.
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This study aims to explore the relationship between sustainability reporting and the financial performance of companies listed on the Saudi Stock Exchange as one of the emerging…
Abstract
Purpose
This study aims to explore the relationship between sustainability reporting and the financial performance of companies listed on the Saudi Stock Exchange as one of the emerging markets.
Design/methodology/approach
The study collects data from the corporate annual reports of a sample of 67 companies listed on the Saudi stock exchanges during the period 2016–2019. Financial performance has been measured using four accounting-based measures: return on assets, return on equity, return on capital employed and earnings per share. The relationship between financial performance and sustainability reporting has been estimated using a sustainability index that includes three dimensions (environment, health and safety, and social responsibility).
Findings
The results reveal that the sustainability reporting of Saudi companies, in general, is low. The results also indicate that there is a positive relationship between corporate financial performance and sustainability reporting, whether for the composite index or the three sub-indexes. However, this positive relationship is not statistically significant.
Research limitations/implications
Results of this study are limited to the context in which the study was conducted, which is the Saudi stock exchange from 2016 to 2019, and then the generalization of the results may be limited to listed companies operating in a similar social and economic context. The study also depends on accounting-based measures for financial performance without using market-based measures.
Originality/value
This study comes at the appropriate time with Saudi Arabia's adoption of a comprehensive economic plan called “Saudi Vision 2030”, of which sustainability is at the heart. Despite the efforts of the Saudi government to support sustainability, studies on this issue are still very few.
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Tricia Ong, Terri Trireksani and Hadrian Geri Djajadikerta
Although studies in corporate sustainability have been vastly growing, there has been an increasing demand for more industry-specific sustainability reporting studies to develop a…
Abstract
Purpose
Although studies in corporate sustainability have been vastly growing, there has been an increasing demand for more industry-specific sustainability reporting studies to develop a greater understanding of industry differences in sustainability reporting practice. This study aims to measure the quality of sustainability disclosures in the current leading environmentally sensitive industry in Australia – the resources industry.
Design/methodology/approach
A scoring index was developed to measure economic, social and environmental aspects of sustainability by integrating the fundamental principles of the hard and soft disclosure items from Clarkson et al.’s (2008) environmental index into the social and economic aspects of the Global Reporting Initiative framework. Subsequently, the index was used to assess sustainability disclosures in the annual and sustainability reports of resources companies in Australia.
Findings
The main findings show that companies report more of soft disclosure items than the hard ones. It is also found that companies report most sustainability information in the economic aspect rather than the social and the environmental aspects of sustainability. Most companies disclose sustainability information in their annual reports with few companies producing stand-alone sustainability reports.
Originality/value
This study addresses the need for more industry-specific sustainability studies by focusing on Australia’s resources industry. It also contributes to the lack of an existing tool to measure disclosures based on companies’ true contributions to sustainability by developing a new scoring index for hard and soft sustainability disclosures, which includes all three aspects of sustainability (i.e. economic, environmental and social).
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Andreas Christofi, Petros Christofi and Seleshi Sisaye
The purpose of this paper is to compare the sustainability disclosure methods‐instruments practiced by the two most widely employed indexes/instruments (DJSI World and GRI‐G3…
Abstract
Purpose
The purpose of this paper is to compare the sustainability disclosure methods‐instruments practiced by the two most widely employed indexes/instruments (DJSI World and GRI‐G3 Guidelines). The paper suggests that the newly created triple bottom line (TBL) reporting practices need to undergo further standardization and enforcement to avoid, or give early warnings about, future corporate mismanagement that leads to socio‐economic consequences detrimental to investors and consumers in general.
Design/methodology/approach
This paper utilizes sample firms from the DJSI World Index and the GRI‐G3 Sustainability Guidelines membership list to draw inferences on sustainability indicators of performance. The authors compare the GRI reporting guidelines with the disclosure indicators of the DJSI World.
Findings
The authors' findings suggest that TBL reporting has made enormous progress over the last two decades. However, the two widely used sustainability reporting instruments/indexes (DJSI World and GRI‐G3 Guidelines) differ in disclosure practice‐methods and the authors recommend that further standardization and enforcement is necessary. The authors' view is that the Securities and Exchange Commission (SEC) and Financial Accounting Standards Board (FASB) should become actively involved with the issue of standardization and enforcement of corporate socio‐environmental disclosures. The paper presents evidence that investors have neither rewarded nor penalized firms for adhering to or violating sustainability matters in their corporate decisions.
Practical implications
The authors argue for further standardization and enforcement with regard to the disclosure methods of the two widely used (GRI and DJSI) sustainability indicators in order to avoid future corporate mismanagement that leads to (systemic) economic and socio‐environmental consequences detrimental to citizen investors and consumers in general.
Originality/value
The research is of interest to academicians and practitioners who are interested in the theory and practice of sustainability reporting or TBL reporting. The findings suggest that this newly created disclosure instrument needs to undergo further standardization and enforcement for meaningful and accurate disclosure of economic‐social and environmental performance. The authors' view is that the SEC and FASB should become actively involved with the issue of standardization and enforcement of socio‐environmental disclosure of corporate sustainability.
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Sita deliyana Firmialy and Yunieta Anny Nainggolan
This study aims to focus on developing the sustainability reporting index (SRI) with combined perspectives from varied social rating agencies, along with integrated combined…
Abstract
Purpose
This study aims to focus on developing the sustainability reporting index (SRI) with combined perspectives from varied social rating agencies, along with integrated combined perspectives from academics experts and Indonesian companies.
Design/methodology/approach
The first section discusses the theoretical framework along with the sustainability challenges faced by companies in Indonesia. The second section develops the methodology of the study to measure the SRI by considering practical and theoretical perspectives, starting from the identification of initial disclosure, selecting the final disclosure and developing the hierarchical framework. Lastly, the third section confirms the validity of the study’s framework by the exploratory factor analysis method and its comparability by comparing the content analysis result of the study with the Kinder–Lydenberg–Domini (KLD) method. The content analysis was used to analyze annual reports, sustainability reports and companies’ websites based on indicators found in the resulted model.
Findings
The main finding is the SRI framework (SRIF) of the study, which is built on the basis of the stakeholder relationship theory and is focused on three main dimensions (social, economic and environmental). Specifically, the framework consists of 17 indicators and 93 sub-indicators. On the basis of factor analysis method, it can be safely said that the study’s SRIF is quite valid. The high score of correlations between the SRIF and KLD results at the composite and dimension levels, along with the statistically significant results show that the study’s SRIF results and KLD results are fairly similar.
Research limitations/implications
The present study has its limitation as it only gathers data from publicly available reports issued by the firms (secondary data). Owing to time limitation, primary data are not collected. However, this is also the strength of this research as it will allow investors to replicate the study’s methodology to measure companies’ sustainability.
Practical implications
The study is useful to organizations and statutory bodies toward finding a replicable method to measure the Indonesian companies’ social performance. In addition, the study also introduced the usefulness of the qualitative program Atlas TI to perform content analysis, the exploratory factor analysis method to ensure validity and comparability by comparing it to the KLD methodology, which is known globally as the most widely accepted methodology to measures social performance. Lastly, this study will provide implications to the Government to ascertain the level of SRI reporting among the Indonesian public-listed companies.
Originality/value
The resulted framework in this study simultaneously considers social, environmental and economic factors in the context of companies in Indonesia, while previous researchers have constructed reporting index separately (i.e. Sumiani et al., 2007; Zhao et al., 2012). Especially in the context of Indonesia, there is no such index simultaneously focused on the three main dimensions, namely, social, environmental and economics. The current study tries to fill the gap by using the constructed SRI index based on three perspectives combined, namely, social rating agencies, academic theorist and Indonesian companies.
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This paper aims to investigate the moderating effect of sustainability reporting on the relationship between the independent variables of board diversity, and earnings management…
Abstract
Purpose
This paper aims to investigate the moderating effect of sustainability reporting on the relationship between the independent variables of board diversity, and earnings management and the dependent variable of readability of financial statements.
Design/methodology/approach
The study panel data regression analysis involved 36 Kenyan-listed companies from 2016 to 2020.
Findings
Key findings were that increased board diversity was found to significantly improve the readability of financial statements. Discretionary earnings management was found to significantly reduce the readability of financial statements. Sustainability reporting was found to significantly increase the readability of financial statements, and it moderated the relationship between board diversity, earnings management and financial statements readability in Kenya.
Research limitations/implications
The study sample of 36 non-financial listed in the Nairobi Securities Exchange was very small and was affected by the problem of thin trading; hence, caution should be adopted when interpreting the findings.
Practical implications
The Capital Markets Authorities (CMA) as a policymaker should enforce sustainability reporting by Kenyan listed firms as there is evidence that the reporting enhances the readability of financial statements. The Institute of Certified Public Accountants as a policymaker should closely monitor the published financial statements of firms for earnings management and punish the perpetrators, as there is empirical evidence that the practice reduces the readability of financial statements.
Social implications
Sustainability reporting is successful as a moderating variable between readability of financial statements and determinants of readability of financial statements.
Originality/value
This study contributes to knowledge by studying sustainability reporting as a moderating variable between the independent variables of board diversity and earnings management and the dependent variable of readability of financial statements and measured sustainability reporting using a dummy variable for the period before and after the enactment and release of CMA code of 2016 on corporate governance that required sustainability reporting by Kenyan listed companies.
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Shubham Singhania, Jagvinder Singh, Deepti Aggrawal and Sudhir Rana
With growing environmental and social issues worldwide, sustainability disclosures and reporting have become a focal point of discussion. This study aims to investigate the role…
Abstract
Purpose
With growing environmental and social issues worldwide, sustainability disclosures and reporting have become a focal point of discussion. This study aims to investigate the role played by gender diversity in sustainability disclosures in the context of India, over a period of eight years.
Design/methodology/approach
The study devises a unique sustainability reporting quality index and employs the generalized ordered logit model, which ensures that results are parsimonious even if the assumptions under a logit model are violated.
Findings
The results suggest that with an increase in the percentage of women directors and the number of independent women directors on board, the sustainability reporting quality is likely to improve.
Practical implications
The results of the study shall play a significant role for the corporate houses established in India, as it encourages them to modify their directors' selection process and ensure that women are able to break the “glass ceiling” to reach the upper echelon in the firms.
Social implications
The study gives an insight into the role played by women directors in sustainability reporting quality aspect, and therefore, the regulatory bodies, as well as policymakers of the Indian economy, shall formulate such regulations which can advance the presence of women on the board and in the decision-making process.
Originality/value
This study is among the first to investigate the relationship between gender diversity and sustainability reporting quality using the generalized ordered logit model which is an improvement over the previously used techniques. Moreover, the unique cultural and institutional setting offered by India, which is an emerging economy, provides a fertile ground for understanding the role of women leaders in the workforce.
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Wan Nurul Karimah Wan Ahmad, Marisa P. de Brito and Lóránt A. Tavasszy
The purpose of this paper is to assess the sustainability reporting practices of oil and gas (O & G) companies and the integration of sustainability in the management of…
Abstract
Purpose
The purpose of this paper is to assess the sustainability reporting practices of oil and gas (O & G) companies and the integration of sustainability in the management of their supply chain.
Design/methodology/approach
A content analysis of sustainability report of 30 companies was conducted based on the Pacific Sustainability Index that contains 21 topics on social and environmental reporting. An analysis was also conducted on supply chain management (SCM) topics related to supplier management, product stewardship and logistics management.
Findings
There is inconsistency in the sustainability reporting practices among the O & G companies studied. While 63 percent of the companies expressed higher environmental intent compared to social intent, their reporting of environmental performance is lagging behind social performance reporting. There is also a lack of supply chain indicators in the sustainability reporting guidelines. This affects the companies ability to report their supply chain practices objectively.
Practical implications
The findings of this study can be used as a guideline to improve the sustainability reporting practices and to identify relevant supply chain indicators that can be incorporated in a sustainability reporting index.
Originality/value
There is a lack of research on sustainability reporting practices in the O & G industry context, especially in terms of SCM. Previous studies focussed on companies in specific countries and/or do not incorporate all sustainability dimensions, namely, economic, environmental and social factor. We think that this is the first comprehensive study on the sustainability reporting practices and the integration of sustainability in SCM in the O & G industry.
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Jamal A. Nazari, Irene M. Herremans and Hussein A. Warsame
The purpose of this study is to investigate the role of internal variables, such as strategic governance and operational controls, along with external variables that influence…
Abstract
Purpose
The purpose of this study is to investigate the role of internal variables, such as strategic governance and operational controls, along with external variables that influence sustainability reporting.
Design/methodology/approach
Building on the corporate governance and sustainability reporting literature, the authors develop a model to integrate external motivators and internal facilitators to determine their impact on sustainability reporting. The authors also control for a number of financial and non-financial variables that may influence sustainability reporting. The authors limit their sample to the companies in extractive industries that report their greenhouse gas emission to the Government of Canada. The authors collected the data from several data sources including secondary archival databases, newspapers, Web sites and annual reports.
Findings
Using a sample of companies in high-polluting industries, the authors found that variables representing both external pressures that act as motivators and internal controls that act as facilitators are significantly associated with enhanced sustainability reporting.
Practical implications
Considering the formation of several international initiatives such as International Integrated Reporting Council to improve sustainability reporting for decision-making, the authors’ research provides interesting insights both to policymakers and managers about organizational characteristics that are important to make reporting useful and relevant.
Originality/value
Little academic research has investigated the role of internal variables in facilitating sustainability reporting. The authors use a robust model that combines external and internal variables to more thoroughly understand the reporting process.
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Omar Al Farooque and Helena Ahulu
This paper aims to provide new insights on the determinants of social and economic sustainability reportings of multinational enterprises (MNEs) in three Anglo-Saxon countries…
Abstract
Purpose
This paper aims to provide new insights on the determinants of social and economic sustainability reportings of multinational enterprises (MNEs) in three Anglo-Saxon countries, mainly Australia, the UK and South Africa, from the perspective of corporate governance, stakeholder and corporate legitimacy.
Design/methodology/approach
This paper examines stand-alone sustainability reports of 67 large MNEs from three countries available in the Global Reporting Initiative (GRI) website for the period of 2008-2009. It undertakes two distinct methodological approaches: first, principal component analysis (PCA) of GRI guidelines (G3) on social and economic indicators to identify the most appropriate dependent variables, and second, hierarchical multiple regression for the hypotheses testing and finding determinants of respective dependent variables on social and economic reportings.
Findings
The results from the PCA of GRI guidelines (G3) provide an alternative way of categorizing the social and economic indicators when compared to the categories given by the GRI. Again, the results from hierarchical multiple regression indicate the industry sector as the dominant determinant of social and economic reportings. In particular, the positive, significant association of board independence, assurance and employee performance variables with economic reporting confirms the significant roles of corporate governance, stakeholders and corporate legitimacy in determining economic reporting. The findings also suggest the complementary nature of relevant theories in corporate voluntary disclosures relating to economic performance. However, social reporting shows no such relations, which rather relies more on firm-specific/financial variables of MNEs including firm size and age.
Research limitations/implications
The sample of this study is limited to two-year periods and large MNEs available in the GRI website with stand-alone sustainability reports only.
Practical implications
The PCA focuses on most relevant and specific categories of social and economic reportings as opposed to GRI generic categories. The PCA findings also suggest the GRI to contemplate reducing the social and economic indicators for future guidelines. The hierarchical multiple regression results highlight specific areas of emphasis that MNEs should focus on when reporting social and economic information.
Originality/value
This study adds value to the existing literature on GRI-based social and economic reportings as well as the complementary nature of corporate governance, stakeholders and corporate legitimacy perspectives.
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