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Drivers of sustainability reporting quality: financial institution perspective

Author

Listed:
  • Weng Foong Chang
  • Azlan Amran
  • Mohammad Iranmanesh
  • Behzad Foroughi

Abstract

Purpose - This study aims to explain how institutional, cultural and corporate factors affect the sustainability reporting quality (SRQ) of financial institutions and to test the moderating effect of equator principles (EP). Design/methodology/approach - The annual reports of 100 financial institutions were examined for the year 2016 using content analysis. The multiple regression technique was used to test the proposed relationships. Findings - The results show that the quality of sustainability reports is higher among financial institutions in developed countries. Furthermore, institutions that practice Islamic values and those that integrate corporate social responsibility values into their mission and vision have higher levels of SRQ. Privately owned institutions also have higher quality of sustainability reporting in comparison to government-owned ones. Adopting the EP has a greater effect on the SRQ of non-Islamic financial institutions in comparison to Islamic ones. Practical implications - The results of the study will be useful in enabling managers of financial institutions to become knowledgeable about the factors that lead to higher SRQ. The findings also have implications for policymakers’ development of sustainability reporting regulations and for the development of effective enforcement of regulations. Originality/value - These outcomes contribute to the literature on SRQ exploring the importance of institutional, cultural and corporate factors on the extent of SRQ and testing the moderating effect of EP.

Suggested Citation

  • Weng Foong Chang & Azlan Amran & Mohammad Iranmanesh & Behzad Foroughi, 2019. "Drivers of sustainability reporting quality: financial institution perspective," International Journal of Ethics and Systems, Emerald Group Publishing Limited, vol. 35(4), pages 632-650, September.
    • Handle: RePEc:eme:ijoesp:ijoes-01-2019-0006
    DOI: 10.1108/IJOES-01-2019-0006
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    Citations

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    Cited by:

    1. Iranmanesh, Mohammad & Min, Connie Low & Senali, Madugoda Gunaratnege & Nikbin, Davoud & Foroughi, Behzad, 2022. "Determinants of switching intention from web-based stores to retail apps: Habit as a moderator," Journal of Retailing and Consumer Services, Elsevier, vol. 66(C).
    2. José M. Moneva & Sabina Scarpellini & Alfonso Aranda‐Usón & Igor Alvarez Etxeberria, 2023. "Sustainability reporting in view of the European sustainable finance taxonomy: Is the financial sector ready to disclose circular economy?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(3), pages 1336-1347, May.
    3. Annalisa Baldissera, 2023. "Sustainability reporting in banks: History of studies and a conceptual framework for thinking about the future by learning from the past," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2385-2405, September.
    4. Ibtihal A. Abed & Nazimah Hussin & Hossam Haddad & Nidal Mahmoud Al-Ramahi & Mostafa A. Ali, 2022. "The Moderating Impact of the Audit Committee on Creative Accounting Determination and Financial Reporting Quality in Iraqi Commercial Banks," Risks, MDPI, vol. 10(4), pages 1-22, April.

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