Does extent of sustainability reporting influence financial performance? Evidence from five Asian economies Online publication date: Thu, 18-Feb-2021
by Puneeta Goel; Rupali Misra
International Journal of Environment, Workplace and Employment (IJEWE), Vol. 6, No. 1/2, 2020
Abstract: Sustainability reporting is a framework of comprehensive reporting of social and environment performance along with financial disclosures. According to KPMG (2017) survey, Global Reporting Initiatives (GRI) is considered the most inclusive framework for reporting sustainable practices by the firms. The primary objective of this paper is to assess and compare extent and informativeness of sustainability reports per GRI-G4 guidelines of five Asian economies (India, Japan, Hong Kong, Singapore and Philippines). Using specific standard disclosures related to six different aspects of sustainability reporting as per GRI-G4 indicators, this study examines the relationship between sustainability reporting and financial performance of the selected companies. Over all, it has been observed that though sustainability reporting is gaining its ground, the extent of reporting as per GRI-G4 guidelines is low in all economies and there is a significant difference in reporting by selected countries. The study neither finds any significant impact of sustainability reporting on ROS and ROA, nor does financial performance significantly predict informativeness of sustainability reporting on different GRI-G4 indicators. The policy implication that the study recommends is to make sustainability reporting mandatory by law with penalty clause to make it more effective and comprehensive.
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