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The Quality of Sustainability Reports and Corporate Financial Performance: Evidence From Brazilian Listed Companies

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  • Hong Yuh Ching
  • Fábio Gerab
  • Thiago Henrique Toste

Abstract

Corporate sustainability is essential to long-term corporate success and for ensuring markets deliver value across society, and despite its importance, there is no clear consensus as to whether the financial performance of companies relates to their sustainability performance. The objectives of this study are to verify whether the sustainability reporting quality would affect corporate financial performance (CFP) among the firms listed on Corporate Sustainability Index (ISE) and to examine the quality of information disclosed in their sustainability reports (SR). The sample is composed of all firms listed on ISE for the period 2008 to 2014. This study considered accounting and market-based indicators and control variables. There is no clear consensus as to whether the financial performance of companies listed in sustainability indices relates to their sustainability performance. The main findings are as follows: There is no association between accounting and market-based variables and the reporting quality, and although the quality disclosure is improving throughout the years studied, the scores are still low. This is also true in the three dimensions of sustainability. We are not aware of studies examining the relationship between CFP and sustainability reporting quality, and this is the main contribution.

Suggested Citation

  • Hong Yuh Ching & Fábio Gerab & Thiago Henrique Toste, 2017. "The Quality of Sustainability Reports and Corporate Financial Performance: Evidence From Brazilian Listed Companies," SAGE Open, , vol. 7(2), pages 21582440177, June.
    • Handle: RePEc:sae:sagope:v:7:y:2017:i:2:p:2158244017712027
    DOI: 10.1177/2158244017712027
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    References listed on IDEAS

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    2. Yousef Alwardat, 2019. "Disclosure Quality and its Impact on Financial Reporting Quality, Audit Quality, and Investors’ Perceptions of the Quality of Financial Reporting: A Literature Review," Accounting and Finance Research, Sciedu Press, vol. 8(3), pages 201-201, August.
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