Search Results (33)

The Asia Pacific, led by the resource-dependent ASEAN-5, is the largest carbon contributor, yet its firms exhibit critically low transparency. This study examines the relationship between voluntary Sustainability Assurance (SA) and carbon disclosure transparency using 875 firm-year observations (2018–2022). Applying panel regression and several robustness tests, we find that SA adoption has a positive relationship with the magnitude of disclosed carbon emissions, indicating enhanced transparency. This positive relationship is significantly more pronounced in firms with high environmental performance and greater property, plant, and equipment (PPE) efficiency, suggesting SA aligns with genuine sustainability efforts rather than symbolic reporting. Furthermore, SA increases the likelihood of disclosing the complex Scope 3 emissions. However, the effectiveness of SA is conditional: its transparency benefit is statistically significant only within mandatory sustainability reporting (SR) regimes and in non-environmentally sensitive industries, highlighting crucial variations across regulatory and industrial contexts within ASEAN-5. This research provides evidence on the role of SA in emerging markets, extending Agency Theory by demonstrating its function as a credibility signal that reduces information asymmetry. We offer practical guidance for managers seeking market differentiation, and for regulators aiming to align voluntary SA with IFRS S1/S2 to enhance disclosure quality. Full article

This study examines sustainability reporting practices (2010–2023) of emerging markets’ companies cross-listed in London as Global Depositary Receipts (GDRs). Despite the voluntary nature of sustainability reporting, all examined companies issued a corporate social responsibility (CSR) report. Additionally, 90 percent of companies hired an external auditor to provide assurance for CSR disclosure. Further, 99 percent of examined GDRs relied on the Global Reporting Initiative guidelines when preparing CSR reports, and 90 percent had a sustainability committee. Overall, cross-listed companies demonstrated an impressive level of CSR reporting. However, the gender diversity or independence of the board of directors is unrelated to the extent of CSR disclosure. Next, sustainability reporting scores are associated with lower liquidity position and are negatively related to reported earnings. This evidence supports the agency theory perspective in that executives of GDR cross-listed companies may use enhanced CSR reporting practices to divert attention from poor financial performance. The findings stand in contrast to previously documented results for New York cross-listed firms and have implications for regulators and global investors of European stock exchanges. Full article

The International Financial Reporting Standards (IFRS, 2023) guidelines have indicated the importance of holistic organisational sustainability values (profit, people, and planet) and the required human capital to implement sustainability business strategies to achieve sustainable development goals (SDGs). This empirical research using the strategic choice and sustainable human resource management resource-based theories explores the role of high-performance sustainable work practices (HPSWPs) with sustainability characteristics to shape the required human capital to implement simultaneous environmental, social, and governance (ESG) corporate sustainability business strategies aligned with the organisational sustainability orientation of firms. A total of 203 senior managers from Australian companies participated in this study. The participants completed survey questionnaires, which encompass the holistic organisational sustainability orientation, corporate sustainability business strategy, and high-performance sustainable work practices. The mediation study findings revealed that the social consciousness, stakeholder compassion, ethics of care for wellbeing, and pro-environment characteristics of high-performance sustainable work practices fully mediate the implementation of ESG corporate sustainability business strategies that are aligned with the holistic organisational sustainability orientation. This exploratory research extends the operational strategic choice theory from the sustainable human resource management resource-based perspective in highlighting the role of high-performance sustainable work practices in implementing the choice of environmental, social, and governance (financial) business strategies. Furthermore, the practical implications include improving the quality of voluntary sustainability disclosure by companies in alignment with the IFRS guidelines on management approaches relating to human resource practices to shape the required human capital with sustainability characteristics for corporate sustainability. Future empirical research directions in operationalising simultaneous ESG corporate sustainability business strategies using high-performance sustainable work practices aligned with the holistic sustainability orientation of firms are discussed. Full article

The readability of a firm’s financial disclosure has long been used as a variable to predict firm performance and explain investors’ decision-making in the market. We investigate whether readability is informative for non-financial disclosure. Based on signaling theory and a sample of over 10,000 ESG reports released by Chinese public firms, this study explores how readability moderates the relationship between ESG ratings and firm value. Empirical evidence highlights that ESG ratings have a greater influence on firm value for firms releasing more readable ESG reports. The moderating effect of disclosure readability is weakened by firms’ growth potential and institutional ownership due to the extent of information asymmetry in the market. These results are robust to the use of alternative readability measures. This paper contributes to the literature by emphasizing the importance of textual characteristics in sustainability reporting and providing actionable insights for practitioners and policymakers. Full article

As investors increasingly incorporate non-financial performance metrics into investment decisions, CSR has become valuable due to its implications for voluntary disclosures and third-party ratings. Building on this premise, our study examines how green-bond issuance signals environmental commitment and is associated with ESG performance and valuation. While other studies examine this association, we go a step further and identify the green-bond features which are associated with ESG ratings. Using the Bloomberg database, we downloaded corporate green-bond data for 2550 green bonds. We use signaling theory as the foundation of the study. We deploy regression to test the relationships. Our findings show that green-bond features are associated with enhanced environmental and ESG disclosure scores but not with reductions in CO₂ emissions relative to sales. The findings show weak associations of ESG with green-bond features. Taken together, the results contradict ‘greenwashing’ claims. However, the findings confirm that companies effectively signal environmental commitment through green-bond issuance. These insights enhance the understanding of green bonds’ nature and dimensions while providing meaningful implications for corporate policy. Full article

Global leaders have adopted sustainable development goals to address critical issues like climate change, biodiversity loss, and pollution from both human activities and firms. Over the years, there has been a demand for stricter regulations, accountability, and improved sustainable business practices by stakeholders. In the field of accounting, voluntary disclosure of firms’ sustainability efforts has become an important component of firm reporting architecture. Despite being a voluntary practice in many jurisdictions, sustainability reporting has become essential for firms to demonstrate their commitment to meeting sustainability goals, ensuring future growth, and achieving long-term success. This study examines firms’ sustainability reporting intentions and further investigates the dominant factors that drive such intentions, relying on the extended version of the Theory of Planned Behaviour. Data for the study were gathered from managers of member firms with the Association of Ghana Industries. Using a total of 518 valid responses, the study’s hypotheses were tested employing the partial least square structural equation modelling technique. The results indicate that subjective norm, perceived behavioural control, dynamic capabilities, cultural tightness–looseness, sustainability commitment, and perceived benefit are good predictors of firms’ sustainability reporting intentions. However, the results suggest an inverse relationship exists between attitude, perceived cost, and intention to engage in sustainability reporting. The findings highlight some of the critical factors driving sustainability reporting behaviour among firms. Full article

Amidst ongoing global economic and environmental crises, the concept of legitimacy has gained paramount importance for firms, which must not only survive but also maintain their legitimacy through comprehensive disclosures. This study investigates the mediating role of corporate governance in shaping firm performance and voluntary disclosure, emphasizing sustainability implications. Analyzing 82 firms across various sectors in Turkey from 2010 to 2020, the research reveals no direct relationship between corporate governance and equity. However, it identifies a partial mediation effect of corporate governance on the disclosure of general, strategic, and forward-looking financial information related to net profit. Critically, our findings demonstrate that corporate governance fully mediates the relationship between net profit and the disclosure of social and board information, with the magnitude of this indirect effect being complete. This underscores the fact that robust corporate governance enhances transparency in social and environmental reporting, thereby supporting firms in their efforts to align with sustainable business practices and stakeholder expectations. These results highlight the crucial role of effective governance in ensuring comprehensive disclosures that support the sustainability goals of modern enterprises. Full article

This paper explores the influence of a country’s institutional factors and internal corporate governance on banks’ voluntary climate finance disclosures. The analysis focuses on the world’s top 100 banks, examining the institutional and governance factors that shape TCFD disclosure practices. From an institutional perspective, the research reveals a heightened level of climate financial disclosure in banks located in countries where investor protection is strong under the common law system and environmental performance is commendable. On the internal governance front, it is observed that the independence and diversity of the board of directors play a facilitating role in promoting such disclosure. Additionally, in countries where shareholder litigation is easily pursued, a moderating effect is observed wherein board independence paradoxically inhibits TCFD disclosure. This study stands as the first to explore the determinants of climate financial disclosure in global banks, confirming the driving forces behind such disclosures through institutional and stakeholder theories and providing crucial empirical evidence to enhance research on voluntary disclosure. Full article

Earlier research has shown that the makeup of the corporate board is a crucial predictor in meeting stakeholder accountability expectations through voluntary Corporate Social Responsibility (CSR) disclosure. Though scholars have identified substantial relationships between board composition and CSR disclosure, the majority of their focus has been on the ‘quantity’ of CSR disclosure rather than the ‘quality’. Therefore, the present study considers the association of board characteristics (such as gender diversity, independence, female chairperson or/and female CEO, and board size) and the quality of CSR disclosure of the top 100 Pakistan Stock Exchange (PSX)-listed companies. We conducted content analysis of secondary Corporate Governance (CG) and CSR data extracted from the annual reports of PSX-listed companies across ten industrial sectors from the period 2017 to 2018. Our empirical investigation through univariate and multiple regression analysis with ordinary least squares (OLS) techniques revealed that all the board characteristics potentially had a significant association to lower CSR disclosure quality. Using the 2SLS regression model, we addressed the endogeneity issue of board characteristics and found robust results. One of the important implications of our findings is that policymakers and regulators in developing countries like Pakistan should review the value of board qualities as outlined in CG principles and develop stronger mechanisms to improve numbers of female directors and nonexecutive directors’ independence. We acknowledge several research limitations, including the study time period and selected board characteristics. While our study has provided some understanding of the association of board characteristics with CSR disclosure quality of PSX-listed companies, several research gaps still need to be addressed. Future investigators should examine this association through the pre-COVID-19 and post-COVID-19 contexts and the inclusion of a systems theory perspective. Full article

Integrated reporting is essentially a voluntary practice worldwide. For this reason, although it is growing, its diffusion is slow. Based on the Portuguese context, where a reduced number of listed companies publish integrated reports, this study aims to explore the drivers and barriers for the voluntary adoption of integrated reporting and the reporting practices up to the production of an integrated report. To this end, an analytical framework based on the Diffusion of Innovation Theory was developed and applied to data collected from a survey and corporate reports from both “adopters” and “non-adopters”. The evidence collected suggests that the adoption of integrated reporting may be driven by the perception of a relative advantage over traditional reporting in terms of providing more relevant information to capital providers, particularly banks. The publication of an integrated report appears to be the result of a process of incremental improvements in the practice of disclosure and assurance of non-financial information, so that the previous experience with sustainability reporting is also an important driver for voluntary integrated reporting. Finally, companies may be differently prepared for transition to integrated reporting and, therefore, have different perceptions of its cost and complexity, which may act as a barrier. Full article

This study examines the nature of environmental disclosures of Thai public listed companies (PLCs) which operate in environmentally sensitive industries and the factors affecting environmental disclosures as well as the need for a critical perspective from Non-Governmental Organizations (NGOs) on corporate environmental reporting. A semi-structured interview approach was used for 19 interviews to attain critical perspectives of NGOs on environmental reporting. Thematic analysis through the lens of legitimacy theory and stakeholder theory is undertaken to identify themes and patterns that emerged from the study. Findings of this study reveal that the lack of quantity and quality when it comes to corporate environmental reports are serious issues, thus activating civil society’s criticism. Quality issues are dominant for the lack of reliance on voluntary environmental reporting by NGOs. The government’s monitoring and regulatory compliance systems is key, which has been highlighted as another factor. NGOs prefer government information over environmental information reported by companies. There is strong support for third-party verification and assurance to make the reports more reliable and useful. This study adds to the environmental disclosures and reporting literature by providing insights into civil society perspectives on corporate environmental reporting in the context of a developing country—Thailand. It sheds light on how companies can improve their stakeholder management and engagement strategy. It provides recommendations which may be used to inform relevant policy makers in improving Thai disclosure regulation and compliance mechanisms to promote greater monitoring and accountability. It also suggests companies further explore and examine potential technologies to support their reporting. Full article

This study investigated the effect of ownership structure on environmental, social, and governance (ESG) disclosure, firm value, firm performance, and audit committees as moderating variables in the Indonesian context. The ownership structures in this study are foreign, public, state, and family ownership. This research is quantitative and uses secondary data. The sample consisted of 140 companies on the Indonesia Stock Exchange for the 2018–2020 period. This study used legitimacy, stakeholder, and agency theory. The analytical method used was partial least squares structural equation modeling. The results show that foreign and public ownership positively and significantly affect environmental, social, and governance disclosure. However, state and family ownership did not affect environmental, social, and governance disclosure. In addition, environmental, social, and governance disclosure positively impacts firm value. However, environmental, social, and governance disclosure do not affect a company’s performance. Audit committees moderate the influence of environmental, social, and governance disclosure and firm value. However, the audit committees do not moderate the effect of environmental, social, and governance disclosure and firm performance. The government should make stronger environmental, social, and government regulations that must be implemented by companies listed on the Indonesia Stock Exchange even though they are now voluntary. Full article

This paper develops the multiple-theoretical framework of legitimacy, stakeholders, and voluntary perspective to assess the adoption of Vietnamese listed firms to the 17 United Nations’ Sustainable Development Goals (SDGs). The paper’s primary objective is to use content analysis to discover the status quo of the SDGs practices of the largest 100 Vietnamese listed firms on the two biggest Vietnamese stock exchanges (Ho Chi Minh Stock Exchange–HOSE and Hanoi Stock Exchange–HNX). By drawing a unique framework, the paper contributes to the extant literature review of SDG-related research. Our research framework enables corporate decision-makers significantly access corporate SDG adoptions and the implementation process. With the direct pressure of stakeholders, high environmental sensitivity industries are keen on disclosing SDG-related information. Notwithstanding, the findings reveal that Vietnamese listed firms indicate “green talks” in their corporate reporting rather than “green actions”. Thus, our findings encourage firms to engage in SDGs through substantive sustainability strategies and need greater attention from governments, practitioners, and policymakers. Full article

In this study, we investigate the effect of board gender diversity on the decision to disclose carbon emissions voluntarily. Using an international sample consisting of 22,841 firm-year observations from 38 countries for the period 2010–2019, we determine the existence of a positive relationship between the percentage of female directors on the board and carbon disclosure. This evidence supports agency and resource dependency theories, as a gender diverse board indicates strong governance and better communication among stakeholders. Additionally, we examine the moderating effect of gender quotas across sample countries, where either soft or hard quotas have been implemented. We show that the number of firms disclosing their carbon emissions is, on average, higher in countries with either hard or soft quotas than in countries with no quota. Moreover, the positive effect of board gender diversity on voluntary carbon emission disclosure is similar across firms in countries with quotas and without quotas. The reported results demonstrate that there seems to be no need for country-level strict regulations regarding the firm-level percentage of female representation on the board to be effective, as gender board diversity in countries with no quotas has a similar effect in explaining voluntary carbon disclosure as in countries with quotas and those changing to quota regulation. Full article

The aim of this study is to investigate the reasons for the voluntary preparation of a sustainability report and to identify sustainability disclosure practices in the context of non-listed companies. For this purpose, a multiple case study methodology involving five manufacturing Portuguese companies was employed. Data collection consisted of a mixed approach involving interviews with the sustainability report preparers, and content analysis of sustainability reports and company webpages. The results show two main reasons to initiating voluntary sustainability reporting: requirements from specific customers and the parent company, and the need to communicate with stakeholders, in particular customers, the local community, and suppliers. Companies reveal knowledge of sustainability-related concepts and apply frameworks such as GRI Standards and SDG in preparing their sustainability reports. Several departments are involved in preparing the sustainability report (sustainability, quality, environment, human resources, marketing, and/or communication departments), but no company mentioned the financial department. Moreover, on the webpages, sustainability reports and annual reports tend to be presented in separate sections, suggesting that companies still have a way to go in integrating sustainability information with financial information. Overall, the results show that institutional, stakeholder, legitimacy, and signaling theories can provide explanations for the motives and practices adopted by non-listed companies in voluntarily disclosing sustainability information. Full article