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1 – 10 of over 59000Stefanía Carolina Posadas, Silvia Ruiz-Blanco, Belen Fernandez-Feijoo and Lara Tarquinio
This paper aims to analyse the impact of the European Union (EU) Directive on the quality of sustainability reporting under the institutional theory lens. Specifically, the…
Abstract
Purpose
This paper aims to analyse the impact of the European Union (EU) Directive on the quality of sustainability reporting under the institutional theory lens. Specifically, the authors evaluate what kind of institutional pressure has the highest impact on the quality of corporate disclosure on sustainability issues.
Design/methodology/approach
The authors build a quality index based on the content analysis of sustainability information disclosed, before and after the transposition of the Directive, by Italian and Spanish companies belonging to different industries. The authors use an OLS regression model to analyse the effect of coercive, normative and mimetic forces on the quality of the sustainability reports.
Findings
The results highlight that normative and mimetic mechanisms positively affect the quality of sustainability reporting, whereas there is no evidence regarding coercive mechanisms, indicating that the new requirements do not provide a significant contribution to the development of better reporting practices, at least in the two analysed countries.
Originality/value
To the best of the authors’ knowledge, this is one of the few studies assessing the quality of sustainability reporting through an analysis involving the period before and after the implementation of the EU Directive. It enriches the literature on institutional theory by analysing how the different dimensions of isomorphism affect the quality of information disclosed by companies according to the EU requirements. It contributes to a better understanding of the impact of the non-financial information Directive, and the results of this paper can be relevant for regulators, practitioners and academia, especially in view of the adoption of the new Corporate Sustainability Reporting Directive proposal.
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Ramona Zharfpeykan and Chris Akroyd
This paper aims to evaluate the outcome effectiveness of the global reporting initiatives (GRI) transitions by understanding how companies have responded to the changes from G3.1…
Abstract
Purpose
This paper aims to evaluate the outcome effectiveness of the global reporting initiatives (GRI) transitions by understanding how companies have responded to the changes from G3.1 to G4 and finally to the GRI Standards.
Design/methodology/approach
A quality disclosure score is developed that incorporates assessments of both the quality of disclosures and the materiality of Australian companies. To analyse materiality, survey data were collected from 187 companies. Disclosure scores are based on a content analysis of the sustainability reports of 12 mining and metals companies and 12 financial services companies that used the GRI Standards from 2011 to 2019 (a total of 213 reports).
Findings
The study found that the GRI transitions have not led to companies improving the quality of their disclosures on areas considered important for them to achieve their social and environmental goals. Instead, the companies tended to use a greenwashing strategy, where the quality of disclosure of material issues declined or fluctuated over time.
Practical implications
From a practical perspective, the disclosure score developed in this paper enables managers of companies to recognize a threshold of completeness and to summarize the areas that are not materially relevant to their business.
Social implications
The results are potentially helpful for investors, shareholders and other stakeholders, enabling them to better understand sustainability reports.
Originality/value
This study contributes to the body of research in sustainability reporting by providing evidence on the outcome effectiveness of the latest updates in the GRI framework.
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The purpose of this paper is to explore the evolution of greenhouse gas (GHG) reporting quality and to determine whether the evolution of reporting quality is linked with the type…
Abstract
Purpose
The purpose of this paper is to explore the evolution of greenhouse gas (GHG) reporting quality and to determine whether the evolution of reporting quality is linked with the type of information reported based on the “search”, “experience”, and “credence” typology.
Design/methodology/approach
The method is based on the content analysis of GHG reporting in 245 sustainability reports by 45 oil and gas companies between 1998 and 2010. The content analysis disclosure index developed links GHG reporting requirements with seven quality dimensions. The information associated with each item on the content analysis index is classified as “search”, “experience” or “credence”. Statistical analysis is used to determine whether any significant change occurred in either overall GHG reporting quality or in the quality of reporting in any of the individual dimensions of quality over the period of the study.
Findings
GHG reporting quality has not improved significantly between 1998 and 2010. The quality of reporting is not the same in each of the seven dimensions of quality and this can be explained by information typology.
Originality/value
This paper provides the first longitudinal analysis of the quality of GHG reporting. The methodology developed advances current measures of reporting quality by linking reporting requirements with particular quality dimensions. The results show that the type of information is important in terms of quality evolution and that this can dictate the measures required to improve quality.
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Muhammad Bilal Farooq, Ammad Ahmed and Muhammad Nadeem
The purpose of this study is to develop a sustainability reporter classification matrix (hereafter referred to as the “matrix”) to explain why some reporters publish better-quality…
Abstract
Purpose
The purpose of this study is to develop a sustainability reporter classification matrix (hereafter referred to as the “matrix”) to explain why some reporters publish better-quality sustainability reports than others and why some reporters experience improvements in the quality of their sustainability reports while others experience no improvement or a decline in sustainability report quality.
Design/methodology/approach
The study draws on the existing literature, which is analysed using a combination of legitimacy theory (i.e. commitment to sustainability reporting) and resource-based view (RBV, i.e. competencies in sustainability reporting).
Findings
A two-dimensional matrix is developed representing organisations’ competencies in (explained using the RBV) and commitment to (explained using legitimacy theory) sustainability reporting. Based on these two dimensions the matrix identifies four reporter classifications: incompetent uncommitted reporters (who publish low-quality reports); competent uncommitted reporters (who publish average-quality reports); incompetent committed reporters (who publish average-quality reports); and competent committed reporters (who publish high-quality reports). The matrix explains how reporters can transition from one quadrant/classification to another and how this transition can be either forward (moving from a lower quadrant to a higher quadrant), resulting in improvements in report quality, or backward (moving from a higher quadrant to a lower quadrant), leading to a deterioration in disclosure quality.
Originality/value
The study builds on the extant literature, combining legitimacy theory with the RBV, to provide a more complete explanation for why organisations publish sustainability reports of varying quality and why this quality varies over time. These insights can also be used to explain variations in the quality of integrated reports. The matrix may prove useful to practitioners as a tool for classifying reporters, identifying issues, assessing risk and tracking progress made.
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Kwadjo Appiagyei, Hadrian Geri Djajadikerta and Saiyidi Mat Roni
This study aims to examine the relationship and effect of integrated reporting (IR) quality on sustainability performance and explore the relationships and effects of corporate…
Abstract
Purpose
This study aims to examine the relationship and effect of integrated reporting (IR) quality on sustainability performance and explore the relationships and effects of corporate governance mechanisms on IR quality and sustainability performance.
Design/methodology/approach
Partial least squares structural equation modelling (PLS-SEM) was used in a longitudinal study by following the steps in Roemer’s Evolutionary Model on a sample of listed companies on the Johannesburg Stock Exchange (JSE) in South Africa for a period from 2011 to 2016.
Findings
This study finds board effectiveness and external audit quality to be important determinants of IR quality. It also observes a strong effect of the IR quality on sustainability performance.
Originality/value
This study contributes by using and analysing a longitudinal data set from JSE, currently the only capital market globally requiring the mandatory IR application since 2010.
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Olayinka Erin, Alex Adegboye and Omololu Adex Bamigboye
This study aims to examine the association between corporate governance and sustainability reporting quality of listed firms in Nigeria.
Abstract
Purpose
This study aims to examine the association between corporate governance and sustainability reporting quality of listed firms in Nigeria.
Design/methodology/approach
The authors measure corporate governance using board governance variables (board size, board independence, board gender diversity and board expertise) and audit committee attributes (audit committee size, audit expertise and audit meeting). The authors measured sustainability reporting quality using a scoring system, which ranges between 0 and 4. The highest score is achieved when sustainability reporting is independently assured by an audit firm. The lowest score refers to the absence of sustainability reporting. The study emphasizes 120 listed firms on Nigeria Stock Exchange using the ordered logistic regression technique.
Findings
The results indicate that board governance variables (board size, board gender diversity and board expertise) and audit committee attributes (audit committee size, audit expertise and audit meeting) are significantly associated with sustainability reporting quality. Additional analysis reveals that external assurance contributes to the quality of sustainability reporting through corporate governance characteristics.
Research limitations/implications
This study is restricted to a single country. Future studies should consider a cross-country study, which may help to establish a comparative analysis. Likewise, the future study could consider other regression techniques using a continuous measurement of the global reporting initiative in measuring sustainability reporting quality.
Practical implications
This study’s findings have important implications for policymakers and practitioners, especially the corporate executives and top management. Companies are encouraged to restructure their board to enhance better monitoring and support towards better sustainability reporting.
Social implications
Disclosure on sustainability reporting helps corporate organizations advance the issues of sustainability both nationally and globally.
Originality/value
This current study adds to accounting literature by examining how corporate governance contributes to sustainability reporting practices within the Nigerian context. Drawing from the result, the study provides strong interconnectivity between the corporate board and audit committee in driving sustainability reporting quality within an organizational context.
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Moses Elaigwu, Salau Olarinoye Abdulmalik and Hassnain Raghib Talab
This paper aims to examine the effect of corporate integrity and external assurance on Sustainability Reporting Quality (SRQ) of Malaysian public listed companies.
Abstract
Purpose
This paper aims to examine the effect of corporate integrity and external assurance on Sustainability Reporting Quality (SRQ) of Malaysian public listed companies.
Design/methodology/approach
The study uses a longitudinal sample of 2,463 firm-year observations of non-financial firms listed on the main board of Bursa Malaysia from 2015 to 2019. The study employed panel regression that is, Fixed Effect (FE) Robust Standard Error estimation technique to test its hypotheses.
Findings
The panel regression results reveal that corporate integrity and external assurance positively and significantly influence the quality of sustainability reporting. Though the positive association shows an improvement in the SRQ of the sampled firms, it needs an improvement as the disclosure is more general and qualitative than quantitative. The present improvement in SRQ might result from some regulatory changes like the Sustainability Practice Note 9 Updates of Bursa Malaysia 2017 and the Revised MCCG Principle A to C within the same period.
Research limitations/implications
The study adopts a purely quantitative approach and call for a qualitative investigation in the area in the future.
Practical implications
The study has policy implication for the government and regulators to strengthen compliance with the sustainability reporting guide and the Practice Note 9 Updates. It also has implication for corporate integrity and external assurance for companies, to enhance SRQ and achieve sustainable development.
Originality/value
The study bridged literature gaps by offering new insights and empirical evidence on the role of corporate integrity in SRQ, which has received no empirical attention in the Malaysian context.
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Swaminathan Ramanathan and Raine Isaksson
This paper explores quality science and quality management as a potential pathway to resolve the challenges of corporate sustainability reporting (CSR) by establishing the need…
Abstract
Purpose
This paper explores quality science and quality management as a potential pathway to resolve the challenges of corporate sustainability reporting (CSR) by establishing the need for a common understanding of sustainability and sustainable development.
Design/methodology/approach
Secondary research on key documents released by regulatory institutions working at the intersection of sustainability, corporate reporting, measurement and academic papers on quality science and management.
Findings
Existing measurement frameworks of CSR are limited. They are neither aligned nor appropriate for accurately measuring a company's ecological footprint for mitigating climate change. Quality for sustainability (Q4S) could be a conceptual framework to bring about an appropriate level of measurability to better align sustainability reporting to stakeholder needs.
Research limitations/implications
There is a lack of primary data. The research is based on secondary literature review. The implications of Q4S as a framework could inform research studies connected to sustainable tourism, energy transition and sustainable buildings.
Practical implications
The paper connects to CSR stakeholders, sustainability managers, company leaderships and boards.
Social implications
The implications of sustainability on people, purpose and prosperity are a part of World Economic Forum's stakeholder capitalism.
Originality/value
This paper fills a research gap on diagnosing and understanding the key reporting challenges emerging from the lack sustainability definitions.
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Dormauli Justina and I Wayan Nuka Lantara
This study aims to examine the effect of sustainability report quality (SRQ) on information risk. This research also aims to examine the effect of SRQ on stock market…
Abstract
Purpose
This study aims to examine the effect of sustainability report quality (SRQ) on information risk. This research also aims to examine the effect of SRQ on stock market participation through information risk.
Design/methodology/approach
The research sample includes 120 firm-years listed on the Sri Kehati Index period of 2017–2021. The hypothesis test uses firm and industry effect regression analysis. SRQ is measured by the existence of a sustainability committee and external assurance. The information risk is measured by bid-ask spread. Stock market participation is measured by volume of stock trading.
Findings
Based on the data analysis, this investigation finds that SRQ reduces information risk. This research also finds that SRQ improves stock market participation by reducing information risk.
Originality/value
First, this examination gives new evidence of SRQ to promote information environment improvement. Second, this examination contributes to providing the role of SRQ in an emerging market, such as Indonesia. Third, this examination contributes to providing the evaluation standard for sustainability reporting quality in Indonesia, since Indonesia has no specific standard for the sustainability report. Fourth, this examination contributes to filling the previous gap.
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Shidi Dong, Lei Xu and Ron P. McIver
Based on institutional theory, this paper aims to examine whether, and if so which, institutional forces influence the quality of China’s listed financial institutions’ (FIs…
Abstract
Purpose
Based on institutional theory, this paper aims to examine whether, and if so which, institutional forces influence the quality of China’s listed financial institutions’ (FIs) sustainability disclosures.
Design/methodology/approach
Using univariate statistical and multiple regression analyses, this study quantitatively examines the impacts of coercive pressure from the government and stock exchanges, imitation within subsectors and normative pressure from industry associations and regulators on the quality of China’s listed FIs’ sustainability disclosures. Assessment of the robustness of regression results uses panel random-effects and generalized methods of moments estimation.
Findings
Financial sector corporate social responsibility (CSR) disclosure quality did not increase dramatically following issue of the “Guiding Opinions on Establishing a Green Finance System.” However, a convergence in quality is found over time. State ownership concentration and state links to dominant shareholders negatively impact the quality of financial sector sustainability disclosures, whereas stock exchange index listing requirements and industry association reporting guidance have positive influences.
Research limitations/implications
First, data availability limits the sample to listed financial firms with RKS quality scores. Thus, results may not be generalizable to the broader listed and unlisted financial sector. Second, this study only examines the influence of external forces based on institutional theory. However, internal institutional forces, such as corporate governance, may require examination. This study’s results indicate that coercive pressure, as represented by issue of the “Green Finance” policy, has not yet prompted the financial sector to improve reporting quality; however, normative pressure has had significant influence in influencing FIs’ CSR practices, with China’s banks potentially taking a leading role.
Originality/value
The financial sector has a lower direct environmental impact than traditional polluting industries and different operating and reporting structures, features often used to argue for its exclusion in prior studies. However, its indirect environmental impact via lending and investing activities is significant, suggesting evidence on the determinants of sustainability disclosure quality is required. This study uses evidence from China’s financial sector to reduce this gap in the literature.
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