Exploring Sustainability Reporting Practices in an Emerging Market: Insights From Corporate Governance and Disclosure Tone

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:Provides a novel IFRS S1-based measurement and empirical evidence on the tone-governance-sustainability reporting nexus in an under-researched context.

🏢実務担当者:Demonstrates how audit committee characteristics and disclosure tone impact reporting credibility, guiding internal governance improvements.

🏛政策担当者:Offers a ready framework for implementing mandatory IFRS S1-based sustainability reporting in emerging economies, with implications for governance requirements.

The study examines how narrative disclosure tones (NDTs) and corporate governance mechanisms (CGMs) affect sustainability reporting practices (SRP) in an emerging economy. Data from 125 non‐financial firms in Pakistan, spanning 2011–2022, are utilized. SRP is measured using both GRI and the novel IFRS S1 standards‐based indices. Three NDTs are identified through sentiment analysis, while six CGMs and three ownership structures are sourced from annual reports. Panel regression is used to test the relationships among NDTs, CGMs, ownership structures, and SRP. Negative and uncertain tones are associated with impression management within SRP, whereas positive tones provide more accurate signals. Additionally, audit committee size, independence, and gender diversity enhance SRP, while concentrated ownership reduces it. By introducing a novel measure based on the IFRS S1 sustainability standards and aligning them with the widely adopted GRI framework, the study provides policymakers with a ready framework for implementing mandatory SRP across most emerging economies. Furthermore, this research advances understanding of the tone‐SRP nexus, helping investors distinguish between impression management and authentic signals of SRP, particularly in settings where reporting accuracy is critical. Finally, the study underscores the crucial role that corporate governance and ownership structures can play in enhancing the quality of SRP, particularly in environments with weak governance. Policymakers are encouraged to effectively mandate SRP in line with the IFRS S1 sustainability standards. Furthermore, they are encouraged to promote gender‐diverse, independent audit committees, and all stakeholders should monitor the tone of annual reports to evaluate potential misreporting in sustainability disclosures.

• semanticscholar https://doi.org/10.1002/csr.70501first seen 2026-05-05 23:25:24