The Impact of Sustainability Reporting on Corporate Performance in the UK and Finland
Paulauskaite, Viktorija (2024)
2024
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2024121034548
https://urn.fi/URN:NBN:fi:amk-2024121034548
Tiivistelmä
Sustainability reports are an integral part of organizations' operational activities. Over the past 20 years, governments and voluntary organizations, concerned about economic, social, and environmental issues have begun to publish various sustainability-related regulations that companies must adhere to. Therefore, the study investigated the impact of sustainability reporting on corporate performance in Finland and the UK, attempting to identify key differences in regulations. Brexit was a significant period for the UK; therefore,
the study tested the impact of UK companies' sustainability reports in two periods. The research included reviewing various theoretical articles, governments, and sustainability voluntary organizations’ regulations, laws, and standards to get a comprehensive overview of sustainability reporting activities in chosen countries.
For the study, financial, non-financial, and market data were collected from three companies in the oil and gas sector: Finnish - Neste, British - Shell, and British Petroleum. For each company were gathered or calculated financial indicators: Return on Equity, Return on Assets, Tobin’s Q, Earnings per Share; non-financial indicators: Sustainability Reports (GRI Index), and Board Independence; market indicators: Beta, Jensen’s Alpha. Descriptive statistics and correlation were utilized to analyze the interconnection between independent and dependent variables. The results demonstrated that sustainability reporting is linked with the overall performance in the long-term period in both countries, however, financial performance and sustainability reporting did not indicate a significant correlation. The study also examined the different impacts of sustainability reporting practices in Finland and the UK, since Finland has followed EU regulations without
changes for a long time, while the UK has continued to introduce changes since the start of Brexit. Moreover, the comparison of pre-Brexit and post-Brexit periods did not demonstrate any major changes in the financial performance of companies, however, there have been constant improvements in sustainability reporting practices over the last 20 years.
the study tested the impact of UK companies' sustainability reports in two periods. The research included reviewing various theoretical articles, governments, and sustainability voluntary organizations’ regulations, laws, and standards to get a comprehensive overview of sustainability reporting activities in chosen countries.
For the study, financial, non-financial, and market data were collected from three companies in the oil and gas sector: Finnish - Neste, British - Shell, and British Petroleum. For each company were gathered or calculated financial indicators: Return on Equity, Return on Assets, Tobin’s Q, Earnings per Share; non-financial indicators: Sustainability Reports (GRI Index), and Board Independence; market indicators: Beta, Jensen’s Alpha. Descriptive statistics and correlation were utilized to analyze the interconnection between independent and dependent variables. The results demonstrated that sustainability reporting is linked with the overall performance in the long-term period in both countries, however, financial performance and sustainability reporting did not indicate a significant correlation. The study also examined the different impacts of sustainability reporting practices in Finland and the UK, since Finland has followed EU regulations without
changes for a long time, while the UK has continued to introduce changes since the start of Brexit. Moreover, the comparison of pre-Brexit and post-Brexit periods did not demonstrate any major changes in the financial performance of companies, however, there have been constant improvements in sustainability reporting practices over the last 20 years.