Factors Affecting Quality of Sustainability Reporting: Evidence from Banking Industry in Sri Lanka

Abstract

Sustainability reporting (SR) has been identified as a rapidly expanding area of modern corporate reporting. It is crucial in the current setting to explore the elements determining the quality of SR in Sri Lanka. Therefore, the study aims to identify the factors influencing the quality of SR in Sri Lanka. The sample of the study consists of ten commercial banks in Sri Lanka listed on the Colombo Stock Exchange. Secondary data was acquired from each commercial bank's annual reports over a six-year period from 2016 to 2021 in conducting the study. The quality of SR was evaluated using content analysis. This study applied the comprehensive approach developed by Permatasari, Gunawan, and El-Bannany (2020) to measure the quality of SR. Profitability, leverage, company size, and sustainability committee were the independent variables of the study. This analysis reveals that the most important elements influencing SR quality are company size, profitability, leverage, and the sustainability committee. Furthermore, the current study contributes significantly to expanding knowledge in the field of SR.