Expert-curated guides to the best of CS research.

Research for practice: private online communication; highlights in systems verification

This paper empirically investigates the impact of overall sustainability reporting as well as its components (economic, environmental, and social sustainability reporting) on the cost of debt and equity capital for Malaysian oil and gas companies. The data was collected from 41 publicly listed oil and gas companies in Malaysia for the period from 2008 to 2017. Qualitative information was gathered for sustainability reporting and then converted into quantitative form by assigning weights according to the extent of reporting. The cost of capital information was sourced through Thomson Reuters Datastream. Panel data analysis was employed using generalized least square (GLS) random effects regression to examine the relationship between sustainability reporting and cost of capital. Firm reputation, size, and profitability were included as control variables. The findings indicate that overall sustainability reporting and one component, economic sustainability reporting, reduce both cost of debt and cost of equity. However, environmental sustainability reporting reduces only the cost of debt but does not reduce the cost of equity. Social sustainability reporting shows no effect on the cost of debt or equity. The findings of this paper should be useful for regulators, legislators, shareholders, creditors, and practitioners in pursuing sustainability practices that not only improve economic and environmental performance but also enhance overall performance by reducing the cost of capital. The results of the paper highlight that companies investing in sustainability can generate positive value through the enhancement of reputational capital. This study is the first to empirically investigate the relationship between overall sustainability reporting, including its three components, and the cost of both debt and equity capital.

The efficacy of sustainability reporting towards cost of debt and equity reduction.

Given the increasing concern for the global environmental issues and the relating need for preservation of the ecosystem, sustainability reporting has become more and more important, to both developed and developing economies, sparking the interest of the literature. This study primarily aims to investigate the factors that influence the adoption of new sustainability reporting practices and external assurance. Also, this paper examines the relationship between the reporting activity and firms’ economic performance. The paper combines data from the Global Reporting Initiative’s (GRI) Sustainability Disclosure Database and the Orbis database, from Bureau van Dijk. More specifically, the study uses two logit models and one regression model based on a sample of 366 large Asian and African companies which have addressed the SDGs in their sustainability reports published in 2017. The results reveal that operating in the manufacturing sector and having a higher percentage of women directors in the company’s management structure are positively related to the adoption of sustainability reporting and external assurance. Also, operating in the manufacturing sector leads to better firms’ economic performance. Contrarily from previous studies, the age of the company’s board of directors does not have influences on the use of sustainability reporting. This research contributes to the sustainability issues in the context of emerging markets by explaining the driving factors behind it and its linkage with firms’ performance.

/pdf/sustainability-reporting-and-firms-economic-performance-zrtyrz1kpc.pdf

Sustainability Reporting and Firms’ Economic Performance: Evidence from Asia and Africa

The objective of this study is to investigate the potential impacts of foreign ownership on the corporate sustainability disclosure of leading non-financial companies in the context of an emerging economy of Pakistan. The study employed data from the year 2006 to 2018 gathered from the Pakistan stock exchange. Further, the data on foreign ownership and corporate sustainability disclosure obtained from the firm’s annual reports and the global reporting initiatives (GRI) database. This study employed a sequential mixed methods technique. The empirical results indicate that foreign ownership has a significant impact on total sustainability disclosure (TCSRI). Whereas having an individual assessment, we found that foreign ownership is positively associated with each component (economic, social, and environmental) disclosure respectively. Moreover, our findings prove that firm size and growth are positively related to foreign ownership, TCSRI, and its aspects. In contrast, the study reveals a negative relationship among financial leverage, TCSRI, and economic, social, and environmental sustainability exposure. Summing up, the study indicates that foreign ownership effectively improves sustainability governance mechanism, and at the same time, it is also found that higher financial leverage restricts the sustainability disclosure capacity of firms. Results from this study have technical, theoretical, and policy implications for regulatory institutions, corporate management, and investors in emerging economies. Hence, we put forward the policy implications that the regulatory institutions need to reconsider the policy guidelines subject to diversification of ownership and activism of foreign shareholders in both small/large size firms to enhance the sustainability disclosure practices. Also, reduce the increasing level of financial leverage, which is curbing the firm’s economic, social, and environmental reporting activities.

Does foreign ownership affect corporate sustainability disclosure in Pakistan? A sequential mixed methods approach

The study basically examined the impact of sustainability reporting on firm performance in developing climes. A systematic content analysis approach was adopted in the study and it formed the basis for the researcher’s conclusion and recommendations. The findings of reviewed extant literature showed that there were inconclusive findings on the impact of sustainability reporting on firm performance. However, a large number of works submitted a positive relationship between sustainability reporting and firms’ performance. Secondly, financial performance measures often used by researchers include the profitability measures (ROA and ROE) and market-base measure (EPS and DPS), and the fourth version of the Global Reporting Initiative (GRI) framework in calculating sustainability disclosure index via content analysis. Thirdly, we also found that sustainability disclosure level was low in developing climes compared to other developed climes. We observed some methodological flaws in extant literature on the sector investigated and sample size employed. This study, therefore, recommended that further studies should be carried out on the impact of sustainability reporting on firms’ performance based on the suggested methodological improvement.

/pdf/sustainability-reporting-and-firm-performance-in-developing-38womqimou.pdf

Sustainability reporting and firm performance in developing climes: a review of literature

This study provides an insight into the bi-directional relationship between sustainability
reporting and firm performance in quoted Deposit Money Banks (DMBs) in Nigeria. While the
population size comprises of all deposit money banks quoted on the floor of the Nigerian Stock
Exchange, judgmental sampling technique was used in the selection of the sampled banks.
Considering the period 2014-2016, the annual report and stand-alone sustainability reports of
the selected banks were analyzed through the use of content analysis and coded in order to
obtain the sustainability disclosure index. The panel regression technique was used to analyze
the data. The empirical findings show that there is a bi-directional relationship between
sustainability reporting and firm performance of quoted Deposit Money Banks (DMBs) in
Nigeria. This finding confirms the proposition of the legitimacy theory. The study observed that
the market price per share of the samples firms had a significant negative influence on
sustainability reporting. In addition, the study also out that sustainability reporting had a
significant positive influence on revenue generation of the sampled firms.

/pdf/sustainability-reporting-and-firmperformance-a-bi-3jt1jfmy6v.pdf

Sustainability reporting and firmperformance: a bi-directional approach

This study examined the impact of corporate diversity on corporate social environmental
disclosure of registered manufacturing firms in Nigeria. The study considered
both industrial and consumer goods firms, respectively, consisting a total
of 37 firms. A total of 17 firms was selected for this study using purposive random
sampling spanning the period 2012–2016. While the content analysis technique
was engaged to ascertain the extent of corporate social environmental disclosure,
the study adopted the following variables (board size, foreign directors, and gender)
as measures for corporate diversity. Findings from the study revealed that
board size, foreign directors and gender had a significant positive influence on the
extent of corporate social environmental disclosure of the selected firms. On the
other hand, the presence of an independent director and non-executive director
had an insignificant positive influence on corporate social environmental disclosure.
Thus, the study recommends that a large and diverse board with experience,
expertise and women involvement would enhance mandatory environmental audit
and environmental grievance mechanism report, and if necessary, an ecological
committee would be established, and also community leader on the board would
contribute enormously to the going concern of the business

/pdf/corporate-diversity-and-corporate-social-environmental-4v9qketh2q.pdf

Gbenedio Akpevwenoghene Eyitomi

Papers

Sustainability reporting and firmperformance: a bi-directional approach

Corporate diversity and corporate social environmental disclosure of listed manufacturing companies in Nigeria