Motivation To Perform Sustainability Activities And Provide Disclosures

With purpose of the firm being widened from shareholder wealth enhancement to stakeholder value maximization, respective firm commitment to sustainability has become significant over time. The firms are expected to comply with multiple regulations and disclosures requirements stipulated by investors and governments pertaining to sustainability encompassing Environment, Social & Governance (ESG) or Corporate Social Responsibility (CSR). While these disclosures play a crucial role in informing prosocial activities done by the firm to all stakeholders, thereby reducing information asymmetry among them; the motivations and outcomes for the sustainability activities and disclosures are unclear. Using the survey methodology, this study documents the insights from senior executives that sustainability activities facilitate long term business potential and that firms are motivated to provide sustainability disclosures for stakeholder engagement, to gain competitive advantage, and to improve their financial & operating performance. The outcome of these measures includes improved media coverage, reputation, employee retention and creation of new business opportunities. The study undertakes cross sectional analysis to document that size of the firm, its governance approach, ownership and industry type influences the sustainability activities and the disclosures. This research maps the findings with academic research and proposes a framework to understand motivation to perform sustainability activities and provide disclosures. The study also observes a gap in the level of awareness on sustainability measurement tools and the need for more regulatory measures to meet the sustainability goals.