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Article
Publication date: 14 February 2022

Zhongtian Li, Jing Jia and Larelle J. Chapple

This study aims to analyze whether various textual characteristics in corporate sustainability disclosure associate with corporate sustainability performance in Australia…

Abstract

Purpose

This study aims to analyze whether various textual characteristics in corporate sustainability disclosure associate with corporate sustainability performance in Australia, pertaining to tones of language and readability. The voluntary disclosure theory and legitimacy theory are used to formulate the study hypothesis.

Design/methodology/approach

Using data from Australian listed firms (2002–2016), four textual characteristics are examined: tone of optimism, tone of certainty, tone of clarity and readability. Corporate sustainability performance is measured by Thomson Reuters Asset4 ratings. Different strategies are adopted to mitigate endogeneity concerns.

Findings

The authors found that there is a positive relationship between the textual characteristics of sustainability disclosure and sustainability performance. Specifically, firms with better performance communicate in an optimistic, certain, clear and more readable manner.

Practical implications

The results suggest that Australia’s voluntary reporting status does not induce a combination of poor performance and positive disclosure. This paper should be of interest to investors and other stakeholders and also informs regulatory policy on sustainability disclosure in Australia.

Originality/value

The authors contribute to the sustainability disclosure literature using computer-based textual analysis to explore whether firms reveal their sustainability performance by “how things are said” (i.e. textual characteristics) in sustainability disclosure. As far as the authors could ascertain, they are the first to investigate textual characteristics of sustainability disclosure in Australia.

Details

Meditari Accountancy Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 27 April 2022

Mariela Carvajal and Muhammad Nadeem

This paper aims to examine the relationship between sustainability reporting and firm performance in New Zealand, encompassing the materiality concept of sustainability

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Abstract

Purpose

This paper aims to examine the relationship between sustainability reporting and firm performance in New Zealand, encompassing the materiality concept of sustainability reporting based on the newly available sustainability reporting standards of the Sustainability Accounting Standards Board (SASB). This set of disclosure items published in 2018 is likely to impact on investors’ decision-making and firm performance, as stipulated by the SASB.

Design/methodology/approach

Using a sample of 84 New Zealand companies during the period 2017–2019 and an ordinary least squares statistical approach, this research examines whether firms disclosing sustainability reporting and financially material sustainability information have better performance than the ones non-disclosing.

Findings

Consistent with the legitimacy and stakeholder theories, a positive relationship between sustainability reporting and performance is observed. This positive association is stronger when the sustainability disclosure is financially material information as defined by the SASB.

Originality/value

The outcome of this study provides evidence of the financial incentives for firms to initiate sustainability reporting, especially including financially material sustainability information as guided by the SASB. It also supports the rationale of the SASB for developing new standards that can be globally applicable, influencing investors’ decisions and firm’s financial performance. The results also have implications for the management of New Zealand firms in considering the disclosure of material sustainability information which is linked to firm performance.

Details

Meditari Accountancy Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2049-372X

Keywords

Book part
Publication date: 28 September 2020

Joanna Golden, Mark Kohlbeck and Zabihollah Rezaee

Purpose – The purpose of this study is to investigate whether a firm’s cost structure (specifically, its cost stickiness) is associated with environmental, social, and…

Abstract

Purpose – The purpose of this study is to investigate whether a firm’s cost structure (specifically, its cost stickiness) is associated with environmental, social, and governance (ESG) sustainability factors of performance and disclosure.

Methodology/approach – This study uses MCSI Research KLD Stats (KLD) and Bloomberg databases for the 13-year period from 2003 to 2015 in constructing ESG performance and disclosure variables, respectively. The authors adopt the general cost stickiness models from Anderson, Banker, and Janakiraman (2003) and Banker, Basu, Byzalov, and Chen (2016) to perform the analysis.

Findings – The authors find that a firm’s level of cost stickiness is positively associated with certain sticky corporate social responsibility (CSR)/ESG activities (both overall and when separately classified as strengths or concerns) but not with other nonsticky CSR activities. The authors also show that the association between cost stickiness and ESG disclosure is incrementally stronger for firms with CSR activities classified as sticky. Furthermore, the authors provide evidence that ESG disclosure is greater when both cost stickiness and the degree of sticky CSR activities increase. The authors show that when cost stickiness is high and CSR activities are sticky, management has incentives to increase CSR/ESG sustainability disclosure to decrease information asymmetry.

Originality/value – The findings present new evidence to understand how management integrates cost management strategies with various dimensions of sustainability performance decisions and show that not all ESG activities are equally effective when it comes to cost stickiness. The authors also demonstrate that increased sustainability disclosure helps reduce information asymmetry incrementally more when both costs are sticky and CSR activities are sticky.

Article
Publication date: 17 December 2021

Faisal Faisal, Rizki Ridhasyah and Haryanto Haryanto

This study examines the mediating effect of sustainability disclosure on the relationship between political connections and firm performance from the resource-based view.

Abstract

Purpose

This study examines the mediating effect of sustainability disclosure on the relationship between political connections and firm performance from the resource-based view.

Design/methodology/approach

The sample of this study was sourced from 888 public companies listed on the Indonesia Stock Exchange (IDX) from 2016 to 2017. Path analysis and Sobel tests were used to determine the mediating effect of sustainability disclosure.

Findings

The results show that political connections have a positive and significant influence on firm performance. Furthermore, sustainability disclosures mediate the relationship between political connections and firm performance.

Research limitations/implications

In the context of developing countries such as Indonesia, managers can make the existence of parties in politically connected companies as a medium to demonstrate their adherence to external stakeholders through the disclosure of sustainability information.

Originality/value

This study is the first to investigate the mediating effect of sustainability disclosure on the relationship between political connections and firm performance, especially in emerging markets. The parties of the politically connected companies use a social responsibility mechanism as a medium that can sustain their operational sustainability whilst gaining long-term economic benefits.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

Book part
Publication date: 18 April 2022

Kishore Kumar

Considering the dearth of industry-specific empirical research exploring sustainability reporting in the context of developing countries, this chapter aims to critically…

Abstract

Purpose

Considering the dearth of industry-specific empirical research exploring sustainability reporting in the context of developing countries, this chapter aims to critically examine the extent and the nature of sustainability information disclosure of environmentally polluting industries in India.

Methodology

Data are collected from business responsibility reports (BRRs), sustainability reports, Corporate Social Responsibility (CSR) reports and integrated reports of all 57 energy and mining companies included in NIFTY500 Index at National Stock Exchange of India for the year 2017–2018 and 2018–2019. Content analysis is used to examine the sustainability disclosure practices and one-way analysis of variance (ANOVA) statistical analysis is performed to test the difference across various dimensions of sustainability reporting of companies.

Findings

The results indicate low environmental reporting of the key indicators by energy and mining companies in India. It is found that state-owned companies have better social reporting practices against private sector companies. The findings also indicate that Global reporting initiative (GRI) based reporting have better sustainability disclosure practices and companies reporting based on BRR lack quantitative information disclosure.

Implications

The findings of the present chapter have several implications for policymakers, investors, regulators and management of these high environmental and social impact companies in India. The findings which coincide with the key areas of sustainability disclosure can be used for improving sustainability disclosure practices by the various stakeholders.

Originality

This is one of the first studies to investigate the nature and extent of sustainability performance disclosure of the companies from polluting industries in India. This chapter also contributes to the existing sustainability reporting literature by providing evidence on industry-specific disclosure in the context of a developing country.

Article
Publication date: 19 September 2019

Nurlan Orazalin and Monowar Mahmood

The purpose of this paper is to investigate the extent and determinants of sustainability performance disclosures reported by publicly traded companies in Kazakhstan by…

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Abstract

Purpose

The purpose of this paper is to investigate the extent and determinants of sustainability performance disclosures reported by publicly traded companies in Kazakhstan by using the Global Reporting Initiative (GRI) framework. Among the different possible determinants, stand-alone sustainability reporting (SR), reporting language, leverage, cash flow capacity, profitability, size, age and auditor type were selected to investigate their impacts on the quality and scope of sustainability information.

Design/methodology/approach

The study analyzes data from publicly traded companies at the Kazakhstani Stock Exchange for the years 2013–2015. To investigate the extent, nature and quality of sustainability reports, the study measures and analyzes economic, environmental and social performance parameters, as suggested in the GRI guidelines.

Findings

The results indicate that determinants such as stand-alone reporting, reporting language, firm profitability, firm size and auditor type substantially influence the extent, nature and quality of sustainability-reporting practices of Kazakhstani companies.

Practical implications

The findings of the study suggest that managers, practitioners, regulators and policy makers in emerging economies should adopt the GRI guidelines to report sustainability performance disclosures and focus on specific factors to improve the quality of sustainability disclosures.

Originality/value

This study is one of the first studies to investigate the extent, nature and possible determinants of corporate SR in central Asian-emerging economies.

Details

Journal of Accounting in Emerging Economies, vol. 10 no. 1
Type: Research Article
ISSN: 2042-1168

Keywords

Article
Publication date: 3 October 2016

Najul Laskar and Santi Gopal Maji

The purpose of this paper is to look into the sustainability practices of Indian firms in terms of the quality of disclosure, the impact of corporate sustainability

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Abstract

Purpose

The purpose of this paper is to look into the sustainability practices of Indian firms in terms of the quality of disclosure, the impact of corporate sustainability performance (CSP) on firm performance and the appropriateness of the sustainability reporting guidelines followed by the firms.

Design/methodology/approach

The present study is based on secondary data collected from annual reports and corporate sustainability reports of 28 listed Indian non-financial firms from 2008-2009 to 2013-2014. Content analysis is used to calculate the score in terms of level (binary coding system) and quality of disclosure (four-point scale). These scores are further used to examine the impact of CSP on firm performance by using an appropriate regression model.

Findings

The study finds that the average level of disclosure is 88 per cent, whereas the quality of disclosure is nearly 80 per cent. The influence of CSP (in terms of level and quality disclosure) on firm performance is positive and significant. Moreover, the study also reveals that the Global Reporting Initiatives framework is not sufficient enough to publish the sustainability report of any business concern. The outcomes of the study, thus, indicate that sustainability practices of Indian firms are not myth but approaching toward reality.

Originality/value

It is the first comprehensive study in India to analyze the corporate sustainability reporting practices encompassing different dimensions of sustainability.

Details

Social Responsibility Journal, vol. 12 no. 4
Type: Research Article
ISSN: 1747-1117

Keywords

Article
Publication date: 5 October 2021

Zhongtian Li and Jing Jia

This study aims to examine whether announcements of mandatory sustainability disclosure affect corporate sustainability performance (CSP).

Abstract

Purpose

This study aims to examine whether announcements of mandatory sustainability disclosure affect corporate sustainability performance (CSP).

Design/methodology/approach

The authors use a quasi-experiment provided by mandatory sustainability disclosure announcements that occurred in 21 countries from 2006–2016. A difference-in-differences method is adopted. The authors restrict the drawing of all candidate treatment and control firms to a pool of firms that did not disclose sustainability information one year before the announcements.

Findings

The authors find that the announcements of mandatory sustainability disclosure are positively related to CSP. The positive effect is more pronounced for firms in countries with higher anticipation effects and lower awareness effects. Specifically, the authors find that the effect of the announcements is more pronounced in a country where the rule of law is higher and stakeholders are less likely to initiate communication about sustainability with firms, and with fewer active participants in and signatories to the United Nations Global Compact initiative. The findings hold under different robustness analyses.

Originality/value

The study enriches the knowledge about the effect of the announcements of comprehensive mandatory sustainability disclosure by analysing the consequences of these announcements. In the contribution to this growing stream of research, the authors provide evidence on the consequences of the announcements based on a cross-country sample and importantly, focusses on the non-economic consequences.

Details

Pacific Accounting Review, vol. 34 no. 1
Type: Research Article
ISSN: 0114-0582

Keywords

Article
Publication date: 21 January 2022

Juma Bananuka, Stephen Korutaro Nkundabanyanga, Twaha Kigongo Kaawaase, Rachel Katoroogo Mindra and Isaac Newton Kayongo

The purpose of this study is to examine the extent of and impact of gender diversity and intellectual capital on compliance with Global Reporting Initiative (GRI…

Abstract

Purpose

The purpose of this study is to examine the extent of and impact of gender diversity and intellectual capital on compliance with Global Reporting Initiative (GRI) sustainability reporting standards by Uganda manufacturing companies.

Design/methodology/approach

Data were collected from manufacturing firms in Uganda using a questionnaire survey to find out their perception of compliance with the GRI standards. Data were analyzed using statistical package for social sciences, Microsoft Excel and smart partial least squares structural equation modeling (PLS–SEM).

Findings

The results indicate that on average, manufacturing firms in Uganda comply with GRI sustainability reporting standards to the extent of 59%. The results further indicate that manufacturing companies comply more with the GRI 200 (economic performance disclosures) to the extent of 63% as compared with 55% for GRI 300 (environmental performance disclosures) and 58% for GRI 400 (social performance disclosures). The results also indicate that intellectual capital has a significant impact on the GRI-based sustainability performance disclosures in Uganda. However, board gender diversity has no significant effect. In terms of the control variables, only firm size is significant, while firm age, capital structure and auditor type are not.

Originality/value

This study provides first time evidence of the extent of compliance with the GRI sustainability reporting standards using evidence from Uganda – an African developing country. This study widens the understanding of the usage of GRI standards in the preparation of sustainability reports by manufacturing firms in an emerging economy. This study also provides first-time evidence on the role of gender diversity and intellectual capital in GRI-based sustainability performance disclosures using evidence from Uganda's manufacturing sector.

Details

Journal of Accounting in Emerging Economies, vol. 12 no. 5
Type: Research Article
ISSN: 2042-1168

Keywords

Book part
Publication date: 28 March 2022

Innocent Iweka Okwuosa

The study examined voluntary disclosure of contributions towards SDG-6 achievement by premium board companies in the Nigerian Stock Exchange. It employed a qualitative…

Abstract

The study examined voluntary disclosure of contributions towards SDG-6 achievement by premium board companies in the Nigerian Stock Exchange. It employed a qualitative research design in which data were collected from the sustainability/annual reports of these companies and subjected to content analysis. The analysis shows overall poor quality as the disclosures are not linked to indicators that can help measure the extent of meeting the UN set target for SDG-6. Two tangible indicators disclosed are water use efficiency and construction of boreholes. However, there is no disclosure of the proportion of the population that gained access to clean water through these initiatives. Similarly, poor quality exists when compliance with GRI-303 on water information disclosure was assessed. The motivation behind the disclosures points to a continuation of their Corporate Social Responsibility (CSR). The objective is to gain a social licence to operate, and legitimation as opposed to signalling superior SDG-6 performance.

Details

Environmental Sustainability and Agenda 2030
Type: Book
ISBN: 978-1-80262-879-1

Keywords

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