Abstract:
Purpose: Sustainability reporting is a voluntary endeavor which involves publishing accounts that reflect the economic,
environment and social performance of an organization (Isenmann and Kim, 2006). The absence of a compulsory set of
sustainability reporting rules and standards have caused variances in reporting practices among the companies which
consequently it has influenced on business value creation process differently. Therefore the purpose of this study is to
identify whether there is a significant difference in sustainable disclosures among the financial institutes and how
sustainability reporting influence on institutional performance.
Methodology: The disclosure index derived from the Global Reporting Initiative (GRI) guidelines which consist of 119
parameters is used to evaluate the content of the reports of listed banks and financial sector companies. An analysis results
in a comparison between GRI guidelines and Generation four (G4) framework. Furthermore, the study investigated the
causal relationship between the level of disclosures and financial performance. Data is obtained from annual reports
compiled with the Security Exchange Commission (SEC), and companies’ websites analyses using SPSS 16 data analysis
package.
Analysis and Discussion: The results conclude that there’s no significant difference in sustainability disclosures between
listed banks and financial institutes and the amount of the disclosures have no significant influence on institutes’ financial
performance. Furthermore, the study confirmed that there’s no significant difference between G4 framework disclosures
(Adopted in 2016/2017 reporting period) and GRI guidelines (Adopted in 2017/2018 reporting period).
Research limitations/ implications: The sustainability theories and framework may provide a sensible explanation for
sustainability reporting practices in Sri Lanka
Originality/value: The businesses including financial institutes consume scarce resources. But poor attention has been paid
in reporting their accountability towards the sustenance. Therefore it is in need of recognizing sustainable responsibility.
