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Sustainability Reporting and Firm Performance: The Demonstration of Pakistani Firms

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  • Xie Hongming
  • Bilal Ahmed
  • Arif Hussain
  • Alam Rehman
  • Irfan Ullah
  • Farman Ullah Khan

Abstract

The nexus between sustainability and firm performance is an area of debate among researchers and academicians. The objective of this study is to examine the level and extent of sustainable financial reporting for non-financial firms in Pakistan and to assess the level of the impact of sustainable financial reporting on firm performance in Pakistan. This study is a novel research work as the sustainability practices are not mandatory in many Pakistani firms. Rather kinds of mix sustainability reporting practices are being practiced. The dilemma still exists whether sustainability practices affect the performance of Pakistani firms positively or not. We collect data from the sustainability reports as well as annual reports of 50 non-financial public limited companies listed in Pakistan Stock Exchange for the period 2013 to 2017. We calculate sustainability reporting index using content analysis procedure based on 42 indicators. The index is based on three subindices, namely, environmental, health and safety, and social indicators. We apply two regression models with a view to ascertain the individual effect of each indicator of the sustainability as well as the composite effect of sustainability reporting index on firm performance. The results confirm positive effects of all three individual indicators as well as the composite form of sustainability reporting index on firm performance. The findings of the study clearly outline the economic relevance for introducing the corporate sustainability reporting practices in corporate strategy.

Suggested Citation

  • Xie Hongming & Bilal Ahmed & Arif Hussain & Alam Rehman & Irfan Ullah & Farman Ullah Khan, 2020. "Sustainability Reporting and Firm Performance: The Demonstration of Pakistani Firms," SAGE Open, , vol. 10(3), pages 21582440209, September.
    • Handle: RePEc:sae:sagope:v:10:y:2020:i:3:p:2158244020953180
    DOI: 10.1177/2158244020953180
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    8. Haseeb Ur Rahman & Muhammad Zahid & Amin Jan & Mamdouh Abdulaziz Saleh Al‐Faryan & Khaled Hussainey, 2024. "Is it the mere female directors or their attributes that matter for the quality of corporate sustainability disclosures?," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 661-678, February.
    9. Yujuan Wu & Jacquline Tham, 2023. "The Impact of Executive Green Incentives and Top Management Team Characteristics on Corporate Value in China: The Mediating Role of Environment, Social and Government Performance," Sustainability, MDPI, vol. 15(16), pages 1-23, August.
    10. Fasih Ahmed & Muhammad Nawaz & Aisha Jadoon, 2022. "Topic Modeling of the Pakistani Economy in English Newspapers via Latent Dirichlet Allocation (LDA)," SAGE Open, , vol. 12(1), pages 21582440221, March.

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