Corporate sustainability disclosure’s importance in China: financial analysts’ perception

2019 ◽  
Vol 16 (8) ◽  
pp. 1169-1189
Author(s):  
Jhunru Zhang ◽  
Hadrian Geri Djajadikerta ◽  
Terri Trireksani
Keyword(s):  
Corporate Sustainability ◽  
Financial Analysts ◽  
Health And Safety ◽  
Sustainability Reporting ◽  
Global Reporting Initiative ◽  
Environmental Aspect ◽  
Content Type ◽  
Sustainability Disclosure ◽  
The Social ◽  
Level Of Importance

Purpose Corporate sustainability in China has become a subject of increasing international concern. Corporate sustainability disclosure (CSD) is considered a useful tool to facilitate the empowerment and acknowledgement of stakeholders in the quest for sustainability. However, the degree of cultural and political influences for being sustainably orientated can be significantly different between countries. This study aims to examine the perception of financial analysts, as CSD report users, in China about the level of importance of various indicators of corporate sustainability described in the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines. Design/methodology/approach A set of questionnaires was developed based on GRI G4 guidelines to measure the perception of financial analysts in China on the level of importance of each sustainability indicator described in the GRI G4. A five-point Likert scale was used to measure the report users’ perceptions of each of the indicators. Findings The findings of this study increase our understanding of how Chinese CSD report users perceive corporate sustainability differently from the GRI guidelines. The main results show that the environmental aspect of sustainability was seen to be important in China, followed by the social and economic aspects. Indicator-wise, “water”, “effluents and waste”, “emissions”, “compliance” and “energy” were perceived as vital in the environmental category, while “customer health and safety”, “customer privacy” and “compliance” were considered significant in the social category. Originality/value This study addresses the need for differing corporate sustainability guidelines for different nations and cultures, specifically within the Chinese context. It also contributes to the corporate sustainability literature by adding to our understanding of how financial analysts in China, as CSD report users, perceive aspects of sustainability.

Hard and soft sustainability disclosures: Australia’s resources industry

2016 ◽  
Vol 29 (2) ◽  
pp. 198-217 ◽  
Author(s):  
Tricia Ong ◽  
Terri Trireksani ◽  
Hadrian Geri Djajadikerta
Keyword(s):  
Corporate Sustainability ◽  
Sustainability Reporting ◽  
Annual Reports ◽  
Global Reporting Initiative ◽  
Environmental Aspects ◽  
Environmental Index ◽  
Content Type ◽  
The Social ◽  
Sustainability Reports ◽  
Scoring Index

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).

scholarly journals Approaches on the Screening Methods for Materiality in Sustainability Reporting

2018 ◽  
Vol 10 (9) ◽  
pp. 3233 ◽  
Author(s):  
Susie Wu ◽  
Changliang Shao ◽  
Jiquan Chen
Keyword(s):  
Corporate Sustainability ◽  
Accounting Standards ◽  
Social Sustainability ◽  
Sustainability Reporting ◽  
Global Reporting Initiative ◽  
Screening Methods ◽  
Comparison Study ◽  
Life Cycle Perspective ◽  
Sustainability Disclosure ◽  
Different Levels

Recent decades have seen a surge in corporate sustainability reports (SRs); their proliferation, however, does not ensure effective and consistent reporting on materiality. To improve the completeness, consistency and uniformity of SRs, this study aims at providing a review on the definition and identification of materiality and to propose screening methods for materiality assessments using publicly available resources. We found that most acknowledged standards and initiatives diverge in their definitions and approaches towards materiality. Four screening methods are proposed, including two that are directly usable: (1) Sustainability Accounting Standards Board Materiality Map™ and (2) Global Reporting Initiative (GRI) Sustainability Topics for Sectors; and two involving more desktop research: (3) GRI’s Sustainability Disclosure Database and (4) modeling from a life-cycle perspective. The second and third approaches are tested through a comparison study for the apparel and energy industries in selected regions using content analysis. The results indicate that the two approaches, with different levels of complexity, yield inconsistency in obtaining the most (i.e., the top three) material topics. The GRI’s Sustainability Disclosure Database is recommended for practitioners due to its balanced disclosure on management, economic, environmental and social sustainability themes.

Factors influencing corporate sustainability disclosure practices: empirical evidence from Indian National Stock Exchange

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kishore Kumar ◽  
Ranjita Kumari ◽  
Archana Poonia ◽  
Rakesh Kumar
Keyword(s):  
Empirical Evidence ◽  
Information Disclosure ◽  
Corporate Sustainability ◽  
Sustainability Reporting ◽  
Free Cash Flow ◽  
Government Ownership ◽  
Content Type ◽  
Flow Capacity ◽  
Sustainability Disclosure ◽  
The Impact

Purpose This study aims to evaluate the nature and extent of sustainability disclosure practices of publicly listed companies in India. Further, it investigates the impact of potential determinants on the sustainability disclosure of companies. Design/methodology/approach The study analyzes data of 75 top listed nonbanking companies operating in India included in NIFTY100 Index for the years 2014-2015 to 2018-2019. In the present study, environment, social and governance disclosure dimensions were considered to evaluate the sustainability reporting performance of companies using content analysis. Panel data analysis was conducted to investigate the impact of various factors on the extent of sustainability information disclosure. Findings Results indicate that environmentally polluting industries disclose significantly higher sustainability information than non-polluting industries in India. The empirical findings suggest that determinants such as company size, age, free cash flow capacity, government ownership and global reporting initiative (GRI) usage positively related to the extent of corporate sustainability disclosure. Contrary to the expectations, financial leverage and profitability were found to be negatively related to the sustainability disclosure of companies in India. Practical implications This study provides empirical evidence for regulators, practitioners and corporate strategists to assess the progress in the sustainability reporting landscape in India. The finding implies that large and established companies can reduce legitimacy costs through higher sustainability information disclosure. Interestingly, this premise did not hold in the case of high leveraged and profitable companies. Overall findings can also help policymakers to incorporate necessary reforms to improve sustainability reporting in India. Originality/value This study is one of the first studies to investigate the nature, extent and potential determinants of corporate sustainability disclosure in India. The paper adds to the existing literature on sustainability reporting by providing empirical evidence on the relationship between sustainability reporting and potential determinants such as government ownership, size, leverage, profitability, age, free cash flow capacity, industry and GRI usage.

Consequences of corporate sustainability reporting: evidence from an emerging market

2020 ◽  
Vol 62 (3) ◽  
pp. 243-265
Author(s):  
RMNC Swarnapali
Keyword(s):  
Financial Reporting ◽  
Firm Value ◽  
Stock Exchange ◽  
Emerging Market ◽  
Earnings Quality ◽  
Corporate Sustainability ◽  
Market Value ◽  
Sustainability Reporting ◽  
Content Type ◽  
Sustainability Disclosure

Purpose The purpose of this paper is to discover whether corporate sustainability disclosure has a potential impact on the market value and earnings quality of firms in an emerging market. Design/methodology/approach The data were collected from 220 companies listed in the Colombo Stock Exchange (CSE) in Sri Lanka during the period 2012-2016. Firm value proxies by Tobin’s Q, while earnings quality proxies by discretionary accruals (DAC). The study is premised on value-enhancing theory for firm value and transparent financial reporting perspective for earnings quality. Regression analyses are executed on the panel data to achieve the study objectives. Findings The results reveal a positive relationship between sustainability reporting (SR) and firm market value, accepting the value-enhancing theory while rejecting the value-destroying theory. This finding suggests that investors pay a premium in the financial markets for firms that perform in an environmentally and socially responsible manner, compared to firms that do not perform in a similar manner. In the same vein, the results reveal that sustainability disclosure and DAC are negatively and significantly associated, resulting in high-quality earnings. The result is consistent with the transparent financial reporting hypothesis, which is also in line with the managers’ integrity motivation. Originality/value This is the first study investigating the consequences of SR that is specific to the Sri Lankan context. Owing to the sparse studies on consequences of SR, this study contributes significantly to the extant literature by broadening the geographical coverage to include a developing country setting.

scholarly journals A Cross-Country Investigation of Corporate Governance and Corporate Sustainability Disclosure: A Signaling Theory Perspective

2018 ◽  
Vol 10 (8) ◽  
pp. 2611 ◽  
Author(s):  
Seong Bae ◽  
Md. Masud ◽  
Jong Kim
Keyword(s):  
Corporate Governance ◽  
South Asian ◽  
Corporate Sustainability ◽  
Sustainability Reporting ◽  
Global Reporting Initiative ◽  
Board Independence ◽  
Asian Countries ◽  
Honest Signals ◽  
Sustainability Disclosure ◽  
Cross Country

There is a dearth of research on corporate governance and total sustainability disclosure (economic, environmental, and social) in developing, particularly South Asian, countries. This is unique cross-country research on South Asian countries’ corporate governance elements and total sustainability disclosure practices. The study considers a set of insightful theories, namely, the signaling and agency theories of understanding the motives and drivers of sustainability reporting. Based on data from the Global Reporting Initiative database, the study analyzes Bangladesh, India, and Pakistan. We have collected annual report and sustainability reports from the GRI database for the period between 2009 and 2016. Based on the signaling and agency theories, the study investigates how board and shareholding structures convey signals to the market and different stakeholders. Our empirical results find that total sustainability disclosure has a positive and significant relationship with foreign shareholding, institutional shareholding, board independence, and board size. On the other hand, we document that director shareholding is negatively but significantly associated with total sustainability disclosure. Therefore, we conclude that corporate governance elements have very strong influential power to send positive signals to the market that lead to reduced information asymmetry and ensuring honest signals from different stakeholders.

Board involvement in corporate sustainability reporting: evidence from Sri Lanka

2018 ◽  
Vol 18 (6) ◽  
pp. 1042-1056 ◽  
Author(s):  
Nayana Chandani Swarnapali Rathnayaka Mudiyanselage
Keyword(s):  
Resource Dependence ◽  
Corporate Sustainability ◽  
Binary Logistic Regression ◽  
Sustainability Reporting ◽  
Resource Dependence Theory ◽  
Sri Lankan ◽  
Content Type ◽  
Sustainability Disclosure ◽  
The Board Of Directors ◽  
Asian Context

Purpose The purpose of this paper is to explore the role played by the board of directors in corporate sustainability (CS) disclosure within the Asian context in which sustainability reporting (SR) is an emerging phenomenon. Design/methodology/approach Data are collected from a sample of 100 listed Sri Lankan companies over a period of four years (2012-2016), representing practically all the business sectors. This study draws on both agency and resource dependence theories, while binary logistic regression is performed for the data analysis. Findings The results point out that firms that follow a sustainability disclosure policy have larger boards, a higher proportion of independent directors and more female directors. Contrary to certain common assumptions, firms that practice sustainability disclosure are not influenced by dual leadership, board ethnicity and board ownership. This study helps firms to understand whether their boards can influence the sustainability disclosure choice or not and further, to validate the appropriateness of the agency theory and the resource dependence theory for examining issues of this nature. Originality/value This study contributes significantly to the extant literature on this subject by broadening the geographical coverage, which has generally been limited to the West in corporate disclosure studies.

Moderating effects on sustainability reporting and firm performance relationships: a meta-analytical review

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Anupama Prashar
Keyword(s):  
Firm Performance ◽  
Meta Analysis ◽  
Corporate Sustainability ◽  
Sustainability Reporting ◽  
Global Reporting Initiative ◽  
Content Type ◽  
Country Level ◽  
Subgroup Analyses ◽  
Quality Awards ◽  
Meta Regression

PurposeThe past sustainability literature on the effects of nonfinancial disclosures on a firm's performance is highly fragmented. Thus, the authors raise the following research questions to test potential differences: Is sustainability reporting (SR) based on the Global Reporting Initiative (GRI) or other systematic reporting framework associated with firm performance? Does quality or level of SR impact firm performance? Do firm-, industry- and country-level factors moderate the effect of SR on firm performance? Does the presence of publication bias affect this relationship?Design/methodology/approachMeta-analysis technique suggested by Hedges & Olkin (1985) was used to analyze a sample of 98 effect sizes reported in 60 studies published between 2010 and 2020 studying SR–performance associations. Meta-regression and subgroup analyses were used to investigate the moderating variables accounting for this heterogeneity in the relationship.FindingsResults reveal that level and quality of SR influence the market-, accounting- and operational-based measures of firm performance. Meta-regression results depict that for large, matured firms, or the ones with institutional investors as board members or the ones that actively participate SR quality awards, SR translates better into firm performance. Subgroup analyses demonstrate that the SR–firm performance relationship is moderated by the corporate governance (CG) system of the country and the firm's affiliation to environmentally sensitive industries.Originality/valueThese findings extend theoretical and practical understanding on effects of corporate sustainability communications on performance.

The role of audit committee attributes in corporate sustainability reporting

2019 ◽  
Vol 21 (2) ◽  
pp. 249-264 ◽  
Author(s):  
Amina Buallay ◽  
Jasim Al-Ajmi
Keyword(s):  
Audit Committee ◽  
Corporate Sustainability ◽  
Sustainability Reporting ◽  
Audit Committees ◽  
Content Type ◽  
Disclosure Requirements ◽  
Sustainability Disclosure ◽  
Financial Expertise ◽  
The Impact

Purpose The purpose of this paper is to analyze the extent to which sustainability reporting by banks in the Gulf Cooperation Council (GCC) is affected by the attributes of audit committees. Design/methodology/approach The research is positivist and quantitative, based on a cross-sectional and time series analysis of 59 banks from 2013 to 2017. A multivariate model is used to investigate the impact of selected audit committee attributes (financial expertise, size, members’ independence and meeting frequency) on sustainability reporting. The model is built on agency, legitimacy, resources and stakeholders theories. Findings In contrast to the hypothesis, the authors report a negative association between financial expertise and sustainability reporting. Members’ independence and meeting frequency play a positive role in determining the extent of disclosure. The control variables (bank size, age and auditor type) are positively associated with corporate sustainability reporting. Research limitations/implications The main limitations of this study are related to the chosen attributes of audit committee and do not consider the board’s attributes. However, the authors believe these limitations do not affect the findings. Future research that includes more attributes when they became available will offer more insights into the role of audit committees on sustainability disclosure of financial institutions. Overcoming these limitations may make the results more generalizable. Practical implications The results of this study have important implications for regulators, bank management, investors and creditors. For regulators, in the countries of the GCC and in countries like them, the findings reveal the importance of disclosure requirements. The development of disclosure requirements is likely to improve corporate sustainability reporting and reduce variations in the extent of disclosure among banks. Banks could use these results to improve their reporting to outsiders. For creditors and investors, the study improves their awareness of the importance of corporate social responsibility, corporate governance and environmental information on credit and investment decisions and encourages banks to improve their disclosures of non-financial information. Originality/value This research makes a contribution to the scarce literature on sustainability reporting by banks, especially in an environment where capital markets lack active institutional investors, where regulators play the dominant role in determining the extent of disclosure and where banks are the main source of external finance for the corporate sector.

Stakeholders’ interest in sustainability assurance process

2016 ◽  
Vol 31 (6/7) ◽  
pp. 655-687 ◽  
Author(s):  
Md Khokan Bepari ◽  
Abu Taher Mollik
Keyword(s):  
Internal Control ◽  
Environmental Sustainability ◽  
Corporate Sustainability ◽  
Sustainability Reporting ◽  
Policy Implications ◽  
Global Reporting Initiative ◽  
Data Generation ◽  
Process Data ◽  
Content Type ◽  
Assurance Process

Purpose This paper aims to critically analyse the content of the assurance statements of corporate sustainability reports to examine the degree to which assurance statements enhance and uphold organisational transparency and accountability to stakeholders. Design/methodology/approach This framework of content analysis draws on a research instrument developed by O’Dwyer and Owen (2005), as well as the most recent assurance guidelines (Global Reporting Initiative) and standards AA1000AS, 2008 and ISAE 3000. Findings Due to the lack of stakeholders’ engagement in the assurance process, due to the scope limitation placed on the assurance engagement and due to the reluctance of the assuror to address the assurance statements to the stakeholders groups, sustainability assurance practice cannot be considered as the accountability enabler. With persistent focus on internal systems, process, data generation and data capture, assurance practice is serving more as an internal control tool than as a social accounting/auditing instrument. Research limitations/implications A single country context is studied. However, to the extent that assurances are conducted using common sets of assurance standards and guidelines, there is external validity of the findings. Practical implications Despite the institutional initiatives by the global and local institutions regarding social and environmental sustainability reporting and assurance, the assurance practice has not yet emerged as a tool of social accountability. Originality/value This study provides a comprehensive and up-to-date empirical assessment of the degree to which the sustainability assurance practice encompasses the issue of stakeholders’ interests and forms the potential basis for policy implications to the assurance practice and to the assurance standard setting process.

Assessing current company reports according to the IIRC integrated reporting framework

2018 ◽  
Vol 26 (2) ◽  
pp. 305-333 ◽  
Author(s):  
Merve Kılıç ◽  
Cemil Kuzey
Keyword(s):  
Corporate Sustainability ◽  
Sustainability Reporting ◽  
Annual Reports ◽  
Global Reporting Initiative ◽  
Integrated Reporting ◽  
Adherence Level ◽  
Content Type ◽  
Reporting Practices ◽  
Reporting Framework ◽  
The Impact

Purpose This paper aims to investigate the adherence level of current company reports to the International Integrated Reporting Council (IIRC) integrated reporting framework through analysis of whether and to what extent those reports include the content elements of this framework. This study also aims to examine the impact of corporate sustainability characteristics on the adherence level of current company reports to the integrated reporting framework. Design/methodology/approach The sample for this research comprises the non-financial companies which were listed on Borsa Istanbul, the Turkish stock exchange, as of 31 December 2015. The authors constructed a disclosure index based on the content elements of the IIRC reporting framework. They then measured the integrated reporting disclosure score (IRS) of each company through a manual content analysis of its annual reports and stand-alone sustainability reports. To test the hypotheses, the authors performed a number of statistical analyses. Findings The authors determined that current company reports mainly present generic risks rather than company-specific; provide positive information while dismissing negative information; present financial and non-financial initiatives separately; lack a strategic focus; and include backward-looking information rather than forward-looking information. Consistent with the predictions, the authors found that the IRS is significantly and positively associated with sustainability reporting, Global Reporting Initiative (GRI) adoption, sustainability index listing and the presence of a sustainability committee. Originality/value This study contributes to the literature by enhancing the understanding of integrated reporting practices through the application of a checklist based upon the IIRC integrated reporting framework. Further, this study contributes to the literature by evaluating the impact of corporate sustainability characteristics on IRS.

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