Abstract
Researchers are paying an unprecedented level of attention to the role that sustainability disclosures may play in enhancing financial performance. This study, therefore, examines this issue in a d...
Highlights
There is growing global interest in sustainability reporting issued by firms about the environmental, social and governance effects of their activities
Sustainability disclosure is defined as “the practice of managing companies’ impact on the economic, social and environmental issues for the purpose of identifying risks and opportunities that increasingly impact the success of companies through driving perfor mance gains and increasing competitiveness” (ASE, 2020)
Due to the mixed results as well as the lack of empirical studies on the role of sustainability disclosure in enhancing financial performance in developing countries, this study is motivated to explore this relationship using all the firms listed on the Amman Stock Exchange (ASE)
Summary
There is growing global interest in sustainability reporting issued by firms about the environmental, social and governance effects of their activities. Due to the mixed results as well as the lack of empirical studies on the role of sustainability disclosure in enhancing financial performance in developing countries, this study is motivated to explore this relationship using all the firms listed on the ASE. The results of this study will be beneficial to stakeholders, investors and policy makers Such results will expand the literature and provide empirical evidence on how sustainability reporting affects the financial performance of firms, besides helping top management to justify their sustainability-related decisions and give stakeholders a true picture of the benefits of sustainability practices. The regulatory bodies have issued number of regulations in order to restore investors’ confidence in the capital market Such issuance includes “Corporate Governance Code for Shareholding Companies Listed on the Amman Stock Exchange” in 2008, “Tax Law No.28” in 2009, “Securities Law No.18” in 2017 and most recently “Guidance on Sustainability Reporting” in 2018. Such benefits include “reducing business risks and fostering growth opportunities for the company; realizing gains and maintaining the viability of the firm; enhancing operational efficiency and increasing the company’s profitability by reducing the costs and rationalizing the exploitation of resources; enhancing the company’s workforce satisfaction and fostering the reputation of the company and its brand to build competitive advantage”.3
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