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“Green washing” or “authentic effort”? An empirical investigation of the quality of sustainability reporting by banks

Habib Zaman Khan (Discipline of Accounting and Finance, Canberra Business School, University of Canberra, Canberra, Australia)
Sudipta Bose (Discipline of Accounting and Finance, Newcastle Business School, University of Newcastle, Sydney, Australia)
Abu Taher Mollik (Discipline of Accounting and Finance, Canberra Business School, University of Canberra, Canberra, Australia)
Harun Harun (Discipline of Accounting and Finance, Canberra Business School, University of Canberra, Canberra, Australia)

Accounting, Auditing & Accountability Journal

ISSN: 0951-3574

Publication date: 9 November 2020

Abstract

Purpose

This study explores the quality of sustainability reporting (QSR) and the impact of regulatory guidelines, social performance and a standardised reporting framework (using the Global Reporting Initiative [GRI] guidelines) on QSR in the context of banks in Bangladesh.

Design/methodology/approach

Using a sample of 315 banking firm-year observations over 13 years (2002–2014), a content analysis technique is used to develop the 11-item QSR index. Regression analysis is used to test the research hypotheses.

Findings

Initially, QSR evolved symbolically in Bangladesh's banks but, over our investigation period, with QSR indicators gradually improving, the trends became substantive. The influences on QSR were sustainable banking practice regulatory guidelines, social performance and use of the GRI guidelines. However, until banks improve reporting information, such as external verification and trends over time, QSR cannot be regarded as fully substantive.

Research limitations/implications

This study advances QSR research and debate among academic researchers. With regulatory agencies and stakeholders increasingly using sustainability reporting information for decision making, the information's quality is vital.

Originality/value

This study is the first on QSR in the banking industry context, with previous research mostly investigating the quantity of sustainability reporting. The current study also synthesises QSR with sustainability regulation and social performance factors which have rarely been used in the sustainability literature. To gain a holistic understanding of QSR, existing QSR measures are advanced by combining external reporting efforts with banks' internalisation initiatives.

Keywords

Acknowledgements

The authors would like to thank the two anonymous reviewers for their constructive comments and suggestions. The authors are also grateful to Professor Lee Parker (Editor) for his helpful guidance throughout the review process.

Citation

Khan, H.Z., Bose, S., Mollik, A.T. and Harun, H. (2020), "“Green washing” or “authentic effort”? An empirical investigation of the quality of sustainability reporting by banks", Accounting, Auditing & Accountability Journal, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/AAAJ-01-2018-3330

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Publisher

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Emerald Publishing Limited

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