Page 31 - DUT ICGA Abstract Book

DOES SUSTAINABILITY REPORTING AFFECT FIRM’S FINANCIAL PERFORMANCE? A A A STUDY OF TOP 100 JOHANNESBURG STOCK EXCHANGE (JSE) LISTED MINING FIRMS
Bhekisisa Ngcobo
Department of of Financial Accounting Durban University of of Technology E-mail: bhekisisan1@dut ac za
Abstract
Investors are increasingly incorporating sustainability metrics in in in in in in in in assessing investments It is thus imperative for firms to to produce sustainability reports in in accordance with JSE requirements The study seeks to to investigate the the effects of sustainability reporting on on financial performance for for the the top 100 firms listed on on JSE over the period of 2016 to 2019 The prevailing literature highlight improved financial performance associated with sustainability reporting However it it it is also not not uncommon to find find studies that do not not find find any link between sustainability reports and firms’ financial performance Against the backdrop of mixed empirical evidence this study investigates the effects of of meeting requirements of of FTSE/JSE sustainability reporting on financial performance We use a a a a a a a a a quantitative research design to examine the impact of sustainability reporting on on firms’ financial performance To this end we use panel regression to analyse the relationship between sustainability reporting return return on on on equity return return on on on assets and Tobin’s Q The study found a a a a a a positive significant relationship between meeting the sustainability requirements and firms’ return return on on on equity and return return on on on assets Notably the results were more pronounced for firms firms that made the the top 30 FTSE/JSE Responsible Investment Index However the the study found no link between listing on on FTSE/JSE Responsible Investment Index and firms’ Tobin’s Q The findings of the study could induce managers to comply with FTSE/JSE sustainability requirements Furthermore firms which already meet the the the minimum requirements could be be encouraged to to raise the the the bar and become part of the the the top 30 firms Although the top 100 firms listed on on on JSE represent a a a significant portion of South African economy it is is noted that an an inclusion of all all listed firms could have an an influence on on the overall outcome KEYWORDS: Sustainability reporting Agency Theory Return on Equity Tobin’s Q Book of Abstracts 29