Factors influencing sustainability reporting by Sri Lankan companies

Abstract

Purpose This paper aims to investigate the key company characteristics which influence sustainability reporting by publicly listed companies in Sri Lanka. Design/methodology/approach Panel data analysis is conducted to analyse sustainability reporting of 84 publicly listed companies from 2012 to 2015. Findings Company size and usage of the GRI guidelines are found to be the most relevant company characteristics associated with sustainability reporting by listed companies in Sri Lanka. Unexpectedly, ownership and industry sector do not show strong influences on the extent of sustainability reporting over the study period compared with prior studies. Research limitations/implications Large companies which follow the GRI guidelines are more likely to report in an elaborate manner, indicating the influence of standards setting bodies in Sri Lanka. This means Sri Lankan companies pay attention to global business practices, given the current re-development phase Sri Lanka is experiencing after the end of the civil war. Originality This study is one of the few studies that examine sustainability reporting in a country set against a backdrop of war in the South Asian region. Besides this, it extends the previous research on sustainability reporting and variables such as company ownership, GRI usage, company size and industry sector in a developing country context.

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

“…Some authors, for example, have proved that the company size (usually measured by the number of employees, total assets, sales or market capitalization) has a positive influence on the decision or the likelihood of a company to engage in sustainability reporting (Janggu et al 2007;Gallo and Christensen 2011;Das et al 2015;Schreck and Raithel 2018;Dissanayake et al 2019). According to these authors, the positive relationship can be explained by the greater public visibility (and pressure) that large companies have to face (Fortanier et al 2011;Fernando and Pandey 2012;Fernando et al 2015).…”

“…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 (Hahn and Kühnen 2013). Consequently, an increasing number of scholars has started to analyse the factors influencing the adoption of new sustainability methods in business reporting (Bear et al 2010;Da Silva Monteiro and Aibar-Guzmán 2010;Gallo and Christensen 2011;Gamerschlag et al 2011;Arayssi et al 2016;Ben-Amar et al 2017;Anazonwu et al 2018;Dissanayake et al 2019). Prior studies also have analysed the adoption of external assurance of sustainability reporting in order to increase the transparency of the sustainability information disclosed and enhance stakeholders' confidence (Kolk and Perego 2010;Moroney et al 2012;Junior et al 2014;Peters and Romi 2015).…”

Sustainability reporting disclosure practices among Bangladeshi companies in line with Global Reporting Initiatives

“…In India, most companies disclose sustainability/CSR information in standalone reports and show a constructive change in the mode of disclosures (Jain & Winner, 2016). The average word count in sustainability reporting has been showing an increasing trend from the year 2012 (2264 words) to 2015 (3039 words) in Sri Lanka (Dissanayake et al, 2019). Orazalin and Mahmood (2019) found that standalone reporting, reporting language, profitability, size, and auditor type influenced the nature, extent, and quality of sustainability reporting among Kazakhstani companies for the years of 2013-2015.…”

“…The selected sectors are Textile, Cement, Food & Allied, Pharmaceuticals & Chemicals, and Bank as these industries contribute the most to the economic development of Bangladesh. Banks are leading in the disclosure of corporate social activities, social and environmental reporting, and sustainability reporting (Dissanayake et al, 2019). The rationale for selecting the manufacturing industries is that manufacturing activities gradually worsen environmental hazards such as global warming; biodiversity degradation; and air, water, soil, and marine pollutions.…”

Sustainability accounting and reporting: recent perspectives and an agenda for further research

“…Sustainability reporting in the Asian region is also a growing area of research interest. To this end, Dissanayake et al (2019) aim to investigate the key company characteristics which influence sustainability reporting by publicly listed companies in Sri Lanka. They use panel data to analyse sustainability reporting of 84 publicly listed companies.…”