Позитивные изменения. Том 3, № 4 (2023). Positive changes. Volume 3, Issue 4(2023)

Sustainability reporting is increasingly becoming a core aspect of corporate operations worldwide. This practice offers businesses a platform to exhibit their accountability to society, the environment, and future generations, thereby bolstering their organizational credibility and reputation. In pursuit of consistent policy implementation in this realm, companies are establishing specialized divisions, typically committees, dedicated to sustainable development. This paper delves into the role these structural entities play in enhancing the quality of ESG reporting within Nigerian and South African banks, along with the factors contributing to the effectiveness of such structures. Additionally, it thoroughly outlines the statistical analysis tools employed, making the research design adaptable for data from other cases, including different organizations, countries, regions, etc.

Teryima Samuel Orshi

Faculty of Management Sciences & Undergraduate Research Coordinator, Department of Accounting, Federal University Dutsin-Ma, Nigeria

Mohammed Aliyu Yusuf

Postgraduate Programmes Coordinator, Department of Accounting, Federal University Dutsin-Ma, Nigeria

Oyindamola Olusegun Ekundayo

Accounting Software Laboratory Coordinator, Department of Accounting, Federal University Dutsin-Ma, Nigeria

INTRODUCTION

Sustainability reports are crucial for communicating sustainability performance to stakeholders globally[139], leading to increased transparency and accountability. However, the quality[140] of sustainability reports varies widely across countries, organizations, and industries. A KPMG (2017) study found that only 60 % of the 250 world’s largest companies achieved high sustainability reporting quality. Industries with higher scores include healthcare, telecommunications, and consumer goods, while construction, mining, and oil and gas industries have lower standards. Stakeholders, including investors, regulators, and civil society organizations, recognize the importance of high-quality sustainability reports (Global Reporting Initiative, 2016). High-quality sustainability reporting aids investors in making informed decisions about their investments’ long-term sustainability, while also assisting regulators in monitoring compliance with sustainability regulations.

Moreover, high-quality sustainability reporting can enhance the credibility and reputation of an organization, thereby strengthening its social license to operate (Orshi et al., 2023). Raising sustainability reporting standards can improve transparency and accountability, promoting economic viability.

Sustainability committees (or departments for sustainable development)[141], composed of representatives from various departments, are crucial for organizations to enhance the quality of their sustainability reporting. They oversee initiatives which include: the use of reusable devices, effective recycling to divert waste away from landfills; reducing unnecessary packaging; curtailing energy and water usage and report development. This is further supported by the study of KPMG (2017), which posits that companies with sustainability committees scored higher on their sustainability reporting quality compared to those without such committees. Organizations with sustainability committees tend to publish information about sustainability risks and opportunities, as well as activities taken to addressing such issues.

Sustainability risks relate to ESG issues. For example, Environmental Risks relates to the quality and functioning of the natural environment and systems, such as climate change, the loss of biodiversity, the disruption of ecosystems, pollution (air, water, soil) and depletion of raw materials. Social Risks — relates to the rights, wellbeing and interests of people and communities, such as poverty, human rights violations, racial discrimination, gender inequality, child labor. Governance Risks — relates to the quality of governance in companies such as transparency, corporate governance, responsible tax, diversity, bribery and corruption, and ethics violations.

Sustainability opportunities include: driving growth, maximising returns on investments, and increased revenue; optimising costs and reduced environmental and socio-economic impacts; reduced legal intervention; increased employee productivity, well-being, satisfaction, and retention; customer retention and increased shareholder value.