Improving Corporate Sustainability Reporting Through the Adoption of Integrated Reporting: A Study of Nigerian and South African Firms

Abstract

There is a body of literature suggesting that integrated reporting <IR> can enhance the quality of sustainability reports. This study investigated, by means of a comparative analysis with South African (SA) firms acclaimed to have improved in sustainability reporting, whether or not the quality of sustainability reporting can be improved in Nigeria (NG) through the adoption of <IR>. A purposive sampling technique was applied to select equal number of NG and SA banks that embedded sustainability reports within the annual reports. Using a disclosure checklist designed in line with the GRI G4 framework, divulgence on economic, environmental and social sustainability issues were content-analysed. It was observed that; portion of space devoted to sustainability reporting in annual reports was positively, strongly and significantly correlated with the quality of the report (r = .637, p = .001 ≤ .05); the extent of disclosure by NG (SA) firms is very low (average); firms from both countries significantly differ in the extent of disclosure on economic sustainability (p = .001 ≤ .05) and social sustainability (p = .016 ≤ .05) on the account of the adoption of <IR>by South African firms, but firms do not significantly differ in the extent of environmental sustainability disclosure (p = .256 > .05). Overall, NG and SA banks significantly differ in the extent of sustainability disclosure on the account of the adoption of <IR> by SA firms (p = .006 ≤ .05). To achieve a better quality of sustainability reporting, it was recommended that financial reporting regulatory authorities should consider the adoption of <IR> in Nigeria.