Citation
Kasbun, Nur Fatin
(2015)
The empirical study of sustainability reporting and financial performance of Malaysian public listed companies.
Masters thesis, Universiti Putra Malaysia.
Abstract
This study examines the impact of sustainability reporting on financial performance among
Malaysian public listed companies. A lot of companies across the globe have increasingly
involved with sustainability reporting in recent years. Widely, it is not necessary because of the
mandatory rules or for reputational issues anymore but it is one of the ways to create efficiency
in a business and to improve its performance. The current problem of sustainability reporting is
that companies are not convinced to report. When it comes to reporting, a company would
contemplate of the additional cost and other uncertain issues that might incur. This results to the
ignorance of sustainability. Due to the uncertain issues such as high reporting cost and the
difficulty of measurements, the reporting has been neglected and certain people are unaware
about the importance of sustainability. Another problem of sustainability reporting is that the
reporting percentage is very low among developing countries in Asia including Malaysia. There
is only a small percentage of reporting even though Malaysia is assumed to be on the highest
rank in reporting sustainability among South East Asia countries. The sample of this study
involved 200 companies selected from the Malaysian Public Listed Companies as its population involved 200 companies selected from the Malaysian Public Listed Companies as its population.
Data collection acquired using the data stream, sustainability reports, annual reports and other
means disclosing any companies' social, environmental and economic sustainability activities
and from year of 2006 and 2013. The operationalization on sustainability data is according to
Global Reporting Initiative (GRI) indicators. Content analysis is used to analyze the number of
sentences reported by a company. A multiple regression analysis was employed to analyze the
relationship of sustainability reporting and financial performance.
The findings from regression analyses demonstrated that sustainability reporting in the fields of
economic, environmental and social have a significant relation with companies' financial
performance. Convincingly due to sustainability reporting reported by Malaysian Public Listed
companies, the results indicate that when a company reports sustainability, it will attract more
investors, as it is not only about making profits but to contribute to society as well. The findings
suggest that, hence from attracting investors, it should be able to have a better performance
financially and able to corresponding to stakeholders, shareholders, and community or citizen
needs and remain sustainable in corporate world. Besides that, the findings also showed that
sustainability reporting among Malaysian Public Listed Companies has tremendously improved
from the year 2006 until 2013. Although the findings are varied, it answered the questions and
objectives of this study which emphasized that sustainability reporting plays an important role in
affecting financial performance of a company.
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