Impact of Corporate and Sustainability Reporting Quality on Firm's Performance: Pakistan’s Perspective
DOI:
https://doi.org/10.22555/pbr.v27i3.1389Keywords:
Corporate sustainability reporting (CSR), quality disclosures, operating performance, financial performance, market performance, stock price holding returns, emerging economy, best corporate and sustainability report awards, PakistanAbstract
Corporate sustainability reporting (CSR) is an essential component of corporate governance. This study examines the effect of corporate sustainability reporting on firm performance. The research examines the quality of disclosures for corporate sustainability practices and their implications for operating, financial, and market performance, as well as the holding period return of the stocks. A scoring index is constructed based on the hierarchical awards announced for best corporate and sustainability reports, published jointly by the Institute of Chartered Accountants, Pakistan (ICAP) and the Institute of Cost and Management Accountants, Pakistan (ICMAP). Empirical evidence indicates that the quality of disclosures and reporting related to Corporate Sustainability Practices has an insignificant effect on corporate performance in the context of Pakistan. The evidence can be ascribed to determinants such as economic and political instability, lack of commitment by boards and top management team, limited stakeholder engagement and over-investment in ESG initiatives. To effectively navigate the unique challenges associated with Pakistan, development of tailor-made indigenous framework is required, to facilitate corporate transparency in the form of CSR / ESG initiatives’ reporting that can improve firm valuation.
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