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Factors Affecting the Sustainability Reporting with Special Reference to Consumer Services Sector Listed Companies in Sri Lanka


The purpose of this paper is to identify the factors affecting the sustainability reporting practices of the consumer services sector companies listed on the Colombo Stock Exchange (CSE). Annual reports of 15 companies listed under the consumer service sector on the Colombo Stock Exchange (CSE) were examined for the period from 2015 to 2019 using content analysis. A disclosure index comprising 77 items was constructed based on the Global Reporting Initiatives (GRI) standards. The sustainability disclosure index was the dependent variable and profitability, leverage, firm size, firm age, board composition, and board size were the explanatory variables. Descriptive statistics, correlation analysis, and panel regression analysis were utilised for the data analysis. Descriptive statistics reveal that the level of sustainability reporting by consumer services companies is at a moderate level. This study found that there is a positive significant relationship between firm age and sustainability reporting practices in consumer services sector entities. It implies that younger firms are more likely to report sustainability performance information. Furthermore, it was revealed that there is a positive, significant impact of firm size on sustainability reporting practices. Findings support the legitimacy theory, which states that large companies provide more information since they are more visible and subjected to scrutiny by the general public. However, there is no significant impact of other variables on sustainability reporting practices. There are many practical implications of the findings. Regulators and policymakers should take necessary actions to be aware of the GRI guidelines and encourage listed companies to incorporate those standards in their business reporting. As a limitation, this paper is based on the consumer services sector of the Colombo Stock Exchange (CSE) and has focused mainly on secondary data. Future studies can be conducted considering a primary investigation.

Keywords: Sustainability Reporting, Consumer Service sector, Global Reporting Initiatives (GRI)