Corporate Sustainability Disclosure and Financial Performance of Listed Firms in Ghana

Abstract

ABSTRACT The relevance of sustainability disclosure, as far as its effect on financial performance is concerned, has not really been accentuated in literature. Thus, this study assessed the effect of sustainability disclosures on financial performance of firms listed on the Ghana Stock Exchange. Using the criterion sampling technique, 28 firms were sampled for the study. The explanatory design was employed, and descriptive statistical tools, such as frequency, percentage, mean and standard deviation; and inferential statistics, such as the Pearson product-moment correlation and regression were used for the analyses. Results revealed that the extent of sustainability disclosure practices among listed firms was between (0%) and (40%). Also, it was found that economic performance disclosure had a statistically significant positive effect on financial performance. Further, social performance disclosure was found to have a statistically significant negative effect on financial performance. Furthermore, both environmental performance disclosure and overall sustainability disclosure practices showed statistically significant positive effects on financial performance. It was then concluded that many listed firms in Ghana do not really have full appreciation of sustainability disclosure indicators documented by the GlR yet. In line with this, Management of firms listed on the Ghana Stock Exchange should encourage key employees to pay attention to overall sustainability disclosure practices, and report all information related economic, social and environmental performance, as stakeholders’ access to these pieces of information positively influences the overall financial performance of the firms