Construction of a sustainability reporting score index integrating sustainable development goals (SDGs). The case of Sri Lankan listed firms

• Published in: Journal of Asian business and economic studies Vol. 31; no. 3; pp. 190 - 202
• Main Authors: Soysa, R.N.K., Pallegedara, Asankha, Kumara, A.S., Jayasena, D.M., Samaranayake, M.K.S.M.
• Format: Journal Article
• Language: English
• Published: Bingley Emerald Publishing Limited 25.07.2024; Emerald Group Publishing Limited
• Subjects: Adaptation; Capital markets; Community; Content analysis; Developing countries; Disclosure; Investments; Investors; LDCs; Legitimacy; Principal components analysis; Public companies; Reliability; Stakeholders; Sustainability reporting; Sustainable development; Sri Lanka; M14; Q01; Q56; Sri Lanka; Public listed firms; Sustainability reporting index; SDGs; M41; Principal component analysis
• ISSN: 2515-964X; 2515-964X
• DOI: 10.1108/JABES-05-2023-0149

PurposeAlthough publicly listed firms in Sri Lanka have been increasingly adapting sustainability reporting into their annual reporting practices, a limited number of firms prepare sustainability reports by integrating sustainable development goals (SDGs) into reporting mechanisms. This study attempts to develop an index to monitor firms' sustainability reporting practices based on Global Reporting Institute (GRI) guidelines integrating SDGs.Design/methodology/approachThis paper develops a sustainability score index using the 17 SDGs utilising the results of content analysis of corporate annual reports of a selected sample of 100 firms listed on the Colombo Stock Exchange (CSE). Principal component analysis was employed to examine the reliability of data in the developed index.FindingsFindings show that the developed scoring index is efficient for evaluating the contents of the sustainability reports of Sri Lankan firms. Sustainability reporting practises with regard to the SDGs were observed to have a turbulent period from 2015 to 2019 and the SDGs 12 and 15 were identified to be mostly reported in Sri Lankan corporate sustainability reports.Research limitations/implicationsThe results of the study add to knowledge on the monitoring of sustainability reporting practises with reference to SDGs. The study outcomes are useful for the investors, stakeholders, and statutory bodies to measure the sustainable performance of business firms and assess the firm’s commitment towards the global sustainability agenda.Originality/valueTo the best of our knowledge, this is the first study that constructs a sustainability reporting score index integrating SDGs.