Greening the Bottom Line: Exploring the Impact of Sustainability Disclosure on Financial Performance
Year: 2025
Type: preprint
Abstract: Purpose: The main objective of this study is to analyse the connection between sustainability disclosure quality and various financial indicators among mining companies listed on the Johannesburg Stock Exchange (JSE) in South Africa. Design/Methodology/Approach: The sustainability information disclosure quality assessment was conducted using an evaluation index based on the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines, specifically the Mining and Metals Sector Supplement. Key financial indicators include liquidity, leverage, profitability, and company size. The study evaluates the quality of sustainability disclosures and examines their relationship with these financial indicators. Findings: The results reveal a significant relationship between sustainability disclosure quality and the financial indicators of leverage and profitability. However, no significant relationship was found between sustainability disclosure quality and the financial indicators of liquidity and company size. These findings highlight the critical role of transparent, high-quality sustainability disclosures in influencing certain financial aspects of mining companies. Originality: This study contributes to the literature by providing a comprehensive assessment of sustainability disclosure quality using a detailed evaluation index and linking it to key financial indicators. It emphasises the importance of high-quality disclosures for responsible investment and informed decision-making in the mining sector. Practical Implications: The findings suggest that mining companies should consider early adoption of sustainability reporting regulations to enhance the quality of their disclosures, compliance, and transparency. This can improve their leverage and profitability, which are crucial for attracting responsible investments. Social Implications: Enhanced sustainability disclosures can lead to more informed decision-making by stakeholders, fostering a more transparent and accountable mining industry, which is essential for sustainable development in South Africa. Research Limitations/Implications: Future research could expand the sample size or explore other sectors to validate these findings and further understand the broader implications of sustainability disclosures on financial performance.
Source: Qeios
DOI: 10.32388/g1o8uk
Authors: Abraham Pieterse, Elda du Toit
Institution: University of Pretoria
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4413340269