Faculty of Accounting and Informatics
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Item A longitudinal analysis of environmental reporting practices of listed manufacturing firms in South Africa(CSRC Publishing, Center for Sustainability Research and Consultancy, 2023-03) Mgilane, Nolwando; Maama, Haruna; Marimuthu, FerinaPurpose: Environmental reporting has become a buzzword in the corporate reporting ecosystem, prompting questions about how firms practise it. This study aims to assess the environmental reporting practices of manufacturing firms listed on the JSE in South Africa. Design/methodology/approach: The data collection involved using a content analysis method to extract environmental information from the annual reports of 50 manufacturing firms from 2016 to 2020. Descriptive analysis and Wilcoxon signed ranked test were used to present the trend results and significance level in the changes of environmental reporting over the years. Findings: The results demonstrated an increasing trend in environmental reporting amongst the firms. Notably, the firms disclosed more information about their social and environmental activities, with little reporting emphasis on environmental degradation. The evidence further showed a significant increase in environmental reporting practices over the years. These findings complement the arguments of the legitimacy disclosure theory, suggesting that a quality environmental disclosure portrays firms as environmentally accountable and responsible, resulting in a competitive advantage and winning the trust of the public. Implications/ Originality/value: The study solidifies the existing definitions of legitimacy and stakeholder theory. It also provides consolidated evidence on the movements and trends amongst the social and environmental practices from JSE-listed manufacturing firms' perspectives.Item Impact of environmental disclosure on financial health of manufacturing firms(Cosmos S.A., 2023) Marimuthu, Ferina; Mgilane, Nolwando; Maama, HarunaEnvironmental reporting can help firms stay in compliance with environmental regulations and manage environmental risks. By proactively addressing and disclosing their environmental impact, manufacturing firms can mitigate potential legal and regulatory penalties, fines, and reputation damage, thereby safeguarding their financial performance. In addition to the latter perspective, cost savings and operational efficiency, enhanced reputation and stakeholder engagement, as well as access to capital and investment opportunities, are critical factors to ensure that firms disclose information about their environmental performance, including its impact on the environment, sustainability initiatives, and environmental risks and opportunities to ensure that they maximise their financial performance. Hence, the aim of this study is to explore the relationship between environmental reporting and financial performance of South African listed manufacturing firms. A multiple regression analysis was adopted to achieve the aim by testing the relationship between the variables amongst a sample of 50 manufacturing firms listed on the Johannesburg Stock Exchange (JSE). A content analysis was utilized to attain environmental reporting information themes from the integrated annual reports retrieved from the JSE for the period 2016 to 2020. The results indicate a negative association between environmental reporting responsibility and financial performance, measured by return on equity (ROE) when the components of environmental reporting are tested individually. However, when these components namely: environmental reporting, social reporting and environmental degradation are combined the findings reveal a positive and statistically significant relationship. These results imply that the adoption of environmental reporting, specifically an increase on the quality of environmental reporting results in an increase in the manufacturing firm performance.