Sustainability reporting practices and performance of commercial banks in Ghana: The moderating role of corporate stability

Abstract

Purpose: Having regard for growing interest in the sustainability discourse, this study examined the moderating effect of corporate stability in the relationship between sustainability reporting practices and financial performance of commercial banks in Ghana.

Methodology: Using data sampled from the annual reports of twenty (20) commercial banks in Ghana from the period 2010 to 2022, we used system General Method of Moments (GMM) estimation technique for analysis.

Findings: The study found a significant negative effect of sustainability reporting practices on the financial performance of commercial banks in Ghana. However, the significant negative effect was found to be positive with the moderating role of corporate stability. The findings are robust against endogeneity and instruments proliferation through a Hansen J-test and Arellano-Bond Serial Correlation Test robustness check.

Implications: The findings of the study will contribute to policy and regulation formulation in the area of sustainability practices. It also provides empirical basis for banks to make sustainability commitments, having regard to their stability status.

Originality / Research value: The study is the first of its kind to examine the influence of corporate stability in the sustainability-performance relationship.