Search results

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.

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.

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.

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.

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.

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.

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.

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 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.

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.

To the best of our knowledge, this is the first study that constructs a sustainability reporting score index integrating SDGs.

First, this paper aims to explore the extent of the global reporting initiative (GRI) sustainability key performance indicator (KPI) usage in sustainability reporting by businesses operating in Sri Lanka. Second, using a contingency theory approach, this research examines the factors which promote or inhibit the use of the GRI framework to adopt sustainability KPIs in a developing country context, Sri Lanka.

Content analysis and semi-structured interviews are used in this study to explore the key factors which affect the usage of the GRI framework by Sri Lankan companies in adopting sustainability KPIs and reporting on sustainability.

The findings indicate that the GRI framework is increasingly used for sustainability reporting by Sri Lankan companies because of its flexibility, consistency, legitimacy and its focus on continuous improvement. However, company managers also shed light on the extensive number of KPIs in the GRI framework making selections challenging and the consequent difficulties associated with adapting these KPIs for companies operating in a developing country context.

This study contributes to extending the broader literature on sustainability reporting in developing countries and specifically on sustainability KPIs. Second, this paper adds to the current empirical research on sustainability reporting in Sri Lanka where the literature is still sparse. Third, this study highlights the key factors that support or hinder the usage of the GRI framework in a developing country context.

Important insights for GRI, other standard-setting agencies and businesses can be drawn from the findings of this study. By capitalising further on the training and the educational courses provided by GRI, GRI can be involved in mitigating some of the pressing issues faced by the reporting companies.

This study adds to the limited research on sustainability reporting and sustainability KPIs in developing country contexts. It shows how companies in Sri Lanka are engaging with sustainability KPIs and sustainability reporting, but are also constrained by the GRI framework as its standards are not tailored to issues in developing countries.

The purpose of this paper is to determine whether companies recognised for the quality of their sustainability reporting are also adopting investor relations (IR) best practices for their IR webpages. Quality communications to all stakeholder groups may then speak to organisational transparency and integrated corporate communication management (CCM).

An ordinary least squares regression model was developed to test the hypothesis that companies with quality sustainability reporting also adopts best practices in online IR. Sustainability reporting quality was signalled by inclusion of the company in a socially responsible investment (SRI) index. IR quality was proxied by disclosure scores compiled from content analyses of investor relations webpages.

This study find that inclusion in the SRI Index was positively and significantly associated with online IR quality, while controlling for other variables associated with voluntary disclosure behaviour.

For retail and institutional investors in SRI Index companies, cost of information discovery is reduced as they can use the investor relations webpages as comprehensive source.

This study contributes to the literature on corporate transparency by operationalising reporting “transparency” in that it considers the combined communications output to both financial and non-financial stakeholder groupings. A 2 × 2 conceptual framework for corporate disclosures is proposed that reconciles legitimacy theory and voluntary disclosure theory as motivations. It also contributes to the paucity of research on the links between public relations and investor relations in corporate communications by demonstrating a joint contribution to transparency.

In recent times, sustainable investment gaining much attention within the investors’ community and it is broadly driven by environmental, social and governance (ESG) factors. This study aims to examine the ESG-based sustainability index and economic policy uncertainty (EPU).

Corporate sustainability assessment procedure yields Dow Jones sustainability indexes (DJSIUS) and ESG compliant firms become a member of such indexes. To uncover the effects of policy uncertainty as follows: the study considers EPU index, equity market policy uncertainty index, economic and political events for the period 2000–2017. The authors present the study using a conditional volatility framework.

The correlation between the DJSIUS and policy uncertainty appears to be negative and statistically significant. It is apparent from the results that policy uncertainty does contain important ESG factors that explain the sustainable investment in US firms. Moreover, the stock market boom, credit crunch, Lehman collapse and fiscal crises have shown significant adverse effects on the sustainability index. More importantly, it is seen that investors’ sustainable investing considers presidential election years for portfolio planning; the uncertainty associated with the election years has also shown a negative impact on the sustainable returns.

First, sustainability is essential for the long-term stakeholders’ wealth maximization under governments’ policy uncertainty such as constrained resources, demographic and climate-change-policy, societal expectations, public-policies, regulatory structure. Second, EPU creates new opportunities and risks for sustainable firms and sustainable investing.

The study is novel in which the authors present the effects of uncertainty on socially responsible investing.

The purpose of this paper is to explore how sustainability reporting is shaped by the global influences and particular national context where businesses operate.

The paper uses both content analysis of published sustainability information and semi-structured interviews with corporate managers to explore how sustainability reporting is used to address unique social and environmental challenges in a developing country – Sri Lanka. The use of integrative social contracts theory in investigating sustainability reporting offers novel insights into understanding the drivers for sustainability reporting practices in this particular country.

The findings reveal that managers’ perceptions about usefulness of sustainability reporting, local contextual challenges and global norms influence the extent to which companies engage in sustainability reporting and the nature of sustainability information reported. In particular, Sri Lankan company managers strive to undertake sustainability projects that are beneficial not only to their companies but also to the development of the country. However, while company managers in Sri Lanka are keen to undertake sustainability reporting, they face different tensions/expectations between global expectations and local contextual factors when undertaking sustainability projects and reporting. This is also showcased in what is ultimately reported in company annual reports, where some aspects of sustainability, e.g. social, tend to focus more on addressing local concerns whereas other disclosures are on issues that may be relevant across many contexts.

Important insights for government and other regulatory authorities can be drawn from the findings of this study. By capitalising on the strong sense of moral duty felt by company managers, policymakers can involve the business sector more to mitigate the social and environmental issues prevalent in Sri Lanka. The findings can also be used by other developing countries to enable pathways to engage with the corporate sector to contribute to national development agendas through their sustainability initiatives and projects.

While the usual understanding of developing country’s company managers is that they try to follow global trends, in Sri Lanka, this research shows how managers are trying to align their responsibilities at a national level with global principles regarding sustainability reporting. Therefore, this paper highlights how both hypernorms and microsocial rules can interact to define how company managers undertake sustainability reporting in a developing country.

The chapter describes the recent history of Sustainability Indices in three Latin American countries: Brazil, Mexico, and Chile. In these countries, local Stock Exchanges have been recently launching their own Sustainability Indices. This ongoing trend may indicate a particular way of addressing Socially Responsible Investment (SRI) in the region. The chapter relies on secondary data, mainly documents published by the Stock Exchanges themselves, and on some selected academic and practitioner oriented articles. All three countries present some common features. In all cases, local stock markets launched Sustainability Indices, and their composition has been publicly available from the beginning. Consequently, SRI is now developing in the region in a different way from that of developed markets. The chapter is based on secondary data only. Further research may involve interviews and surveys with different stakeholders (i.e., investors, quoted companies, public officials). The illustration of a different way of developing an SRI market may help public officials and investors from other countries, either in Latin America or elsewhere, who intend to promote SRI. There are few studies on SRI in Latin America, and comparative research between different countries in the region is still rare.

This paper aims to examine the coverage of and trends in reporting content elements in the integrated reports of the Sri Lankan companies following the International Integrated Reporting Framework (IIRF).

Based on a comprehensive checklist developed on the content elements of the IIRF, 171 corporate integrated reports were content-analyzed over a period of three years. The results were theorized subsequently using the legitimacy theory.

The study identifies that the extent of and trend in the coverage of content elements of the IIRF have increased during the period under consideration despite some under-addressed areas. It indicates that Sri Lankan companies are making progress in the preparation of integrated reports in line with the IIRF, which provides evidence in support of both strategic and institutional perspectives of the legitimacy theory because of the proactive actions taken by managers to acquire legitimacy along with the other normative and mimetic pressures available in the IR landscape.

This is one of the first studies that evaluate the compliance of IR adopters with the IIRF overtime in the entirety of a single country. It also develops a comprehensive index to capture the disclosure requirements of IR and extends the analysis to a voluntary context using both strategic and institutional perspectives of the legitimacy theory.

Purpose – The purpose of this chapter is to explore the proactive role played by investor relations officers (IROs) in enhancing the quality and delivery of corporate social performance (CSP) information to social responsibility investment (SRI) analysts and investors, thereby improving the link between CSP and corporate financial performance (CFP). The increasing pressures on corporations to produce and communicate CSP information will be described, as well as how the timely and meaningful communication of CSP can improve CFP.

Methodology/approach – Subsequent to a review of relevant literature, three case examples from McDonald’s, Nestlé, and Stora Enso illustrate Hockerts and Moir’s grounded theory framework that suggest how IROs can improve communication of CSP.

Findings – This chapter illustrates three levels of communicating CSP information. First, IROs target SRI investors and respond to ESG inquiries and surveys. At the second level, IROs integrate ESG information into business strategy and financial results. At the third level, IROs actively market CSP and create a two-way proactive dialogue between SRI investors and senior management and the board.

Practical implications – This chapter provides practical examples to improve ESG activities and their communication via the IRO to SRI analysts and investors.

Originality/value of chapter – This chapter contributes to the literature on the CSP–CFP link by illustrating how proactive IROs are improving the CSP information channel to SRI securities analysts and investors. Furthermore, it advances the theory and research concerning the impact of the information channel between IROs and securities analysts behind the CSP–CFP link.