Sustainable or Symbolic? Ethical Accounting Disclosures in the Oil Industry of Transition Economies

With the growing relevance of sustainable accounting reports, new ways of evaluating the accountability of firms have come into practice, particularly in sectors that are environmentally sensitive, such as the oil industry. However, doubts have emerged over whether sustainable reporting based on ethical principles actually reflects the sustainability performance of firms. This question becomes even more relevant in the context of transition economies, where weak institutional capacity leaves room for corporate manipulation. This paper attempts to determine whether sustainability reporting based on ethical principles indicates actual financial performance in transition economies or merely reflects the symbolic compliance trend among firms. In this regard, a financial ratio–based benchmarking methodology was applied to assess whether there is a link between financial and sustainability indicators of oil firms in transition economies like Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia. The paper expands on financial ratio benchmarking approaches by incorporating sustainable accounting into its methodology and presents an empirical analysis based on data from transition economies. Benchmarking methods in this research consist of mixed approaches, including secondary data analysis by using publicly available reports, financial statements, sustainability reports, and databases related to firms, alongside primary data collection based on the structured survey conducted among managers and sustainability specialists of the sampled of oil firms. The sampling includes 30 oil firms active in six countries of the Western Balkans for a five-year period. As opposed to previous research studies that used sustainability indicators based on multiple measures, the current paper uses benchmarking methods with the help of accounting-based financial ratios. The results indicate that sustainability performance reported by oil firms in transition economies can be described as more symbolic than real, as measured in terms of financial performance in environmental and cost-related aspects. The findings provide practical implications for regulators, investors, and policymakers seeking to strengthen sustainability governance, disclosure quality, and environmental accountability in transition economies.