China’s financial sector sustainability and “green finance” disclosures

Abstract

Purpose

This paper aims to provide a longitudinal analysis of influences on China’s financial sector’s sustainability reporting practices, examines “green finance” disclosures and undertakes subsector comparisons. The state’s impact on the quantity and quality of reporting practices is analyzed.

Design/methodology/approach

Content analysis is used to examine the volumes, frequency and content of sustainability disclosures by China’s financial institutions. Survival analysis is used to identify factors significant in firms’ initiation of these disclosures. In total, 308 firm-year observations on disclosures are examined for 2007–2016.

Findings

China’s financial sector’s sustainability reporting pieces of evidence an “emerging stage” (2007–2009), “developing stage” (2010) and “greening stage” (2011–2016). The roles of institutional theory and regulatory pressure in explaining Chinese financial firms’ reporting behaviours are supported.

Research limitations/implications

This study has several limitations. Firstly, given data restrictions, use of a relatively small sample size. Secondly, it examines different categories of disclosures made by financial firms, not more detailed content. Thirdly, is the potential overlap in disclosure themes under the classification scheme.

Practical implications

China’s financial sector’s adoption of sustainability reporting has been institutionalized, mainly in its banking subsector, consistent with general regulatory pressures.

Social implications

“Greening the finance system” is examined in China’s context, as the country transforms from a resource and pollution-intensive to a green economy.

Originality/value

The financial sector is normally excluded from in-depth qualitative research. This study examines China’s financial sector’s responses to recent governmental pressures on green finance disclosures.

Citation

Dong, S., Xu, L. and McIver, R. (2021), "China’s financial sector sustainability and “green finance” disclosures", Sustainability Accounting, Management and Policy Journal, Vol. 12 No. 2, pp. 353-384. https://doi.org/10.1108/SAMPJ-10-2018-0273