Sustainability Reporting and Financial Performance for Listed Commercial Banks at the Nairobi Securities Exchange – Kenya
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Date
2024-07
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Publisher
IJARKE
Abstract
Sustainability reports have become important tools in recent years for companies to measure their environmental performance and achieve sustainable development. Still, the influence of sustainability reporting on a company's financial returns varies, with certain companies experiencing progress while others observe no discernible effect. Despite the importance of sustainability reporting, there are few studies on the impact of sustainability reporting on corporate financial performance of banks listed on the NSE. Given this, the purpose of this study was to ascertain how sustainability reporting affected the financial results of commercial banks that were listed on the Nairobi Securities Exchange. This research used agency theory, stakeholder theory, and signaling theory to guide its research. A descriptive exploratory design was employed in this study, focusing on the 11 NSE-listed banks that collectively employ 23,534 individuals. The population was divided into secretarial, clerical, supervisory, and management strata using stratified random sampling. Data was collected through questionnaires (primary method) and through data collection instruments (secondary method). The data was later coded, entered, cleaned, and analyzed using SPSS version 28. Descriptive statistical measures, including means, percentages, and frequencies were employed to summarize and characterize the sample data. Inferential statistical techniques such as correlation and regression were also applied to derive conclusions and make inferences beyond the observed sample results. The results of this study show a clear connection between the disclosure of environmental information and the financial performance of banking institutions. The banks placed emphasis on environmental sustainability through various initiatives such as clean energy and waste management. However, the study also found that a comprehensive shift toward environmentally friendly practices has yet to occur. This study adds value to the current scholarly discourse by improving our understanding of the connection between sustainability reporting and financial performance.
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