Thesis M.Com. (Accounting)--University of the Witwatersrand, Faculty of Commerce, Law and Management, 2015 / With changes in international governance trends leaning towards integrated reporting, and the inclusion of good governance practices in the Companies Act No. 71 of 2008, it has become imperative for companies to embrace integrated reporting in order to be, and also be seen to be, responsible with regard to social, environmental and economic issues. The purpose of this report is to investigate the trends in the extent of integrated reporting by companies listed on the Johannesburg Stock Exchange (JSE). The report sought to investigate compliance with the recommendations of the King Report and Code of Governance Principles for South Africa 2009 (King III) by companies listed on the JSE. The report assesses the extent of reporting and disclosures made by companies in relation to the specific recommendations contained in the various chapters of King III since the inclusion of King III in the JSE listing requirements for financial years beginning on or after 1 March 2010. The report also assesses the extent of economic, social and environmental sustainability reporting as required by the Global Reporting Initiative (GRI) guidelines. The annual integrated reports of fifty-two companies listed under the various sectors of the JSE were examined to determine whether there had been significant changes in the specific disclosures provided by these companies, as recommended by King III, from 2010 to 2012. The key findings of the study show that although there has been an increase in the level of disclosure by companies, this change was not significant over the three-year period. The results also show that much improvement is needed in disclosures relating specifically to the new King III sections of risk management, compliance management and IT governance. Key words: corporate governance, disclosure, financial performance, integrated reporting, non-financial information, sustainability

For many years has sustainability been an important factor for companies to consider. Earlier has sustainability been strongly connected with environmental work, but the concept has grown to include factors like working conditions, equality, and ethical business practices. This lay the framework of the concept around ESG, which stands for Environment, Social, and Governance responsibility. In order to measure how companies work with ESG, external organizations produce grades based on corporations' ESG work. ESG has been increasing in popularity and broader use as the awareness regarding corporations and humans' effect on the environment. ESG rating has therefore become one of the most well-known metrics to measure a company's performance in sustainability  The automotive sector stands for a remarkably large portion of the global CO2 emissions worldwide and faces great challenges in the next years in redirecting the industry to a more sustainable business. Therefore, this study aims to investigate the relationship between ESG ratings within the automotive industry and their financial performance. The study also investigated the relationship between the three separated pillars in the ESG rating (Environment, Social, and Governance) to financial performance. The study will analyze financial performance through the market-based measure, Tobin’s Q, and the accounting-based measure, ROA. Despite the fact that the topic of ESG and financial performance is a well- researched subject there is still a need for further research as the previous research has shown varying results.  In order to test this relationship several regression analyses were conducted with data from 2012 to 2021 consisting of 79 automotive & auto parts companies. The regression analysis showed a significant negative relationship between ESG and Tobin’s Q and a non-significant relationship between ESG and ROA. The separated ESG pillars all showed a significant negative relationship with financial performance with one exception, ESG showed a non-significant relationship with the Governance rating. The results conclude that sustainability activities, reflected in the ESG rating, have a negative significant relationship with financial performance with two exceptions. ROA and Governance had a non-significant relationship.  The results, therefore, are in contrast with the Stakeholder Theory, which contradicts the profit- maximization viewpoint and argues that companies should focus on a larger group of people than merely its shareholders. The results from this thesis align with the Shareholder Theory, that companies should only engage in activities that maximize the profit for their shareholders.

It is known that ESG (environmental, social, and corporate governance) performance positively influences the company's financial performance. However, little attention has been paid to macro elements that can moderatethis relationship. Based on the maxim that "institutions matter" and considering that countries with more robust institutions tend to mitigate transaction costs, information asymmetries, and investor uncertainty, this paper aims to demonstrate whether countries' institutional quality positively moderates the relationship between companies' ESG and financial performance over time. Using financial and ESG performance information from Refinitiv database and Countries' Institutional Quality from Worldwide Governance Indicators database, an unbalanced panel was built with a total of 14,699 observations, between the years 2010 and 2020, from 2,912 companies from ten countries (High Institutional Quality -Switzerland, Sweden, Canada, Australia, and Germany and Low Institutional Quality - South Africa, Brazil, India, Thailand, and China). Through the use of Linear Regression with Random Effects, using the Generalized Least Squares (GLS) estimator, and a Test of Differentiation of Regression Coefficients, it was found that the Institutional Quality of the countries positively moderates the relationship between the ESG performance and the financial performance of the companies. Upon closer analysis, it was found that institutional quality only positively and significantly moderates the relationship between environmental and social performance with financial performance. In contrast, no significant result was found for moderating the relationship between corporate governance and financial performance.

In my PhD thesis I investigate the relationship between corporates' financial and environmental performances. The concept of quantitative environmental performance measures was introduced to enable to compare and analyse environmental impacts of different socio­economic units e.g. companies, countries, regions. In my dissertation, I use environmental performance measures to examine their effect on the financial performance of different companies. In the first chapter, I apply a meta­analysis to examine the results of the previous studies which investigate the impact of firms' environmental performance on their financial performance. The outcomes propose that it is important to account for the omitted variable bias such as unobserved firm heterogeneity. The results suggest that it takes time for the environmental regulation to materialize into the financial performance, too. In the subsequent two chapters I study Czech firms over 2004­2008. First I study the intertemporal effects of corporates' environmental performance on financial ...

Business is an incredible social construct of the world, consisting of firms that are part of and arise from society. However, businesses have come under increasing scrutiny from internal and external stakeholders over sustainable business practices. A sustainable business model creates a balance between integrity, equity and financial prosperity, the so-called triple-bottom-line. Environmental, social and governance issues (ESG) have become the modern-day proxy for sustainable business practices. The relationship between sustainable business practices and corporate financial performance is a relatively new but prominent area of research in practice and academia in South Africa. This study explores the relationship between ESG disclosure performance and the corresponding corporate financial performance (CFP) for 70 sampled firms listed on the Johannesburg Stock Exchange (JSE) between the periods 2011 and 2019. In line with international and South African research, ESG in its composite and disaggregated form was considered against a select number of CFP metrics. Select accounting-, market- and qualitybased CFP metrics were considered. Quantitative research methods were employed, using panel regression models to investigate the ESG-CFP relationship where ESG was the independent variable while the CFP metrics were individually considered as the dependent variables. All CFP data was obtained from Bloomberg and Bloomberg's proprietary ESG scores were used. This study finds a statistically significant negative relationship between ESG and the selected CFP metrics. Upon disaggregating the ESG scores, it was evident that the E- and S-scores were also significantly and negatively related to the CFP metrics whilst the G-score was positively related to CFP, but it was not statistically significant. The empirical evidence suggests that over a nine-year investment horizon, higher ESG disclosure performance detracts from firm fundamental and market performance. Further interpretation of the results in conjunction with the literature may suggest that ESG ought to be seen as an insurance policy against excessive underperformance during volatile periods and not a CFP enhancer. Therefore, being “over-insured with ESG” may lead to underperformance.

The determinants that affect the financial performance of an insurance company are complicated due to the intangible nature of insurance products and the lack of transparency in the market. Consequently, the financial performance of insurance companies is important to various stakeholders such as policyholders, insurance intermediaries and policymakers. This study aims to investigate the determinants of financial performance of insurance companies based on their financial strength rating performance. The empirical data are drawn from A.M. Best Insurance Report Online: Non- US Database. The sample consists of 57 insurers in the United Kingdom over the period of 2006 to 2010. The analyses include eight firm-specific variables, which are leverage, profitability, liquidity, size, reinsurance, growth, type of business and organisational form. Rating transition matrices and regression models are employed in this study. Rating transition analysis demonstrates a significant degree of rating changes, as reflected in the rating fluctuations. Based on the empirical results, this study establishes that profitability, liquidity, size and organisational form are statistically significant determinants of financial performance of insurance companies in the United Kingdom. This study recommends an alternative to measure the size of an insurance company, which is based on the gross premium written. In addition, this study provides insights into the effects of the global financial crisis on the financial performance of the insurance companies. / Ministry of Education of Malaysia; Universiti Utara Malaysia

This study explores how sustainable investment, which includes social, economic,and environmental sustainability, affects financial performance in Pakistan'sbanking sector. The study evaluates financial performance using ROA, ROE, NIM,and EPS using secondary data from 26 public and private banks' consolidatedfinancial statements from 2013 through 2022. The STATA-based data analysis,which employed methods including Random effect, and fixed effect, paints acomplex picture of the contribution of sustainability to company performance.Panel regression result shows that environment scores have positive and significantinfluence on ROE, ROE and negative influence on EPS. Further, results show thatsocial scores have positive effect on ROE and EPS and negative effect on ROA.Similarly, governance scores have a positive effect on EPS and negative effect onROA and ROE. The findings have implications for various stakeholders, includinginvestors, regulators, managers, and other interested parties. By implementing ESGinvestments raise awareness. By doing so, the positive influence of ESG on bankperformance can be enhanced, as individuals who prioritize environmental andsocial factors are more likely to choose these banks for their services andinvestments. It is advisable for policymakers and regulators to offer increasedsupport to enhance stakeholder awareness and encourage companies to excel in theareas of environment, social responsibility, and effective governance.

The large environmental issues that are confronting modern society underscore that a critical shift is needed and there is an increasing demand for sustainable solutions to tackle these challenges. Agenda 2030 for sustainable development, outlined by the United Nations, encompasses 17 universal goals and 169 transformative targets that address the global challenges and emphasise the urgency of environmental degradation. In addressing the substantial environmental challenges, radical solutions are needed where eco-innovations will play a pivotal role. Eco-innovations are characterized by novelty and often new to the market, representing a risky and costly activity for companies. Managing environmental and financial performance becomes complex where addressing both goals simultaneously becomes conflicting.      To address the identified research gap the purpose of this study is to analyse how companies manage environmental and financial performance in eco-innovation, especially early in the innovation process. Conflicting perspectives and scattered research underscore the need for a nuanced understanding of how companies manage the tensions inherent in financial and environmental performance in eco-innovation. Paradox theory served as a theoretical lens to gain a deeper understanding of how companies manage the conflicting perspectives that can arise when balancing environmental and financial performance simultaneously. To address the research question and understand the complex interplay that organisations working with eco-innovation are facing, a qualitative method with an inductive approach was chosen. Semi-structured interviews were held with companies mainly working on reducing environmental impact through innovative activities.  The data collected from the semi-structured interviews were analysed through thematic analysis, it resulted in two main strategies that companies use to balance environmental and financial performance in eco-innovation: (1) Buying time through money (2) Future-proof customer demand which we interpret with the resolution strategy from paradox theory. The result indicated that companies that are buying time through money are facing a tension between saving the budget or saving the planet. The tension arises from the absence of strict regulations resulting in a market where demand is lacking and is not yet ready to embrace the radical eco-innovation. This time gap resulting in a lack of demand and our findings indicated that companies are handling this time gap by finding external resources until the market is ready which is coherent with a separation strategy from paradox theory.   The second strategy of future-proof customer demand indicates that companies are facing tension between being commercial or being sustainable. Companies are facing a mature market with price sensitive customers, suffering from fear of regulations and regulations that are not fit for purpose. The solution is to secure sales with an end-customer to reduce the financial uncertainty to be able to balance environmental and financial performance early in the innovation process before (if at all) the innovation starts generating profit. This aligns with a synthesis strategy from paradox theory.

Yes / Following the recent financial crisis, Walker (2009) recommended that financial institutions should form a separate board level risk committee (RC) to manage various risks and prevent excessive risk taking. This research focuses on investigating how firms with separate risk committees differ from those that do not have one. The main research question we address is whether RCs have a fundamental influence on financial performance. We measure financial performance by ROA and ROE and we control for firm size, liquidity and gearing. Our sample consists of all listed financial institutions in FTSE-100 index from 2010 through 2014. Results indicate a negative relationship between risk committee characteristics (i.e., existence, size, independence, and meeting frequency) and financial performance. The results also indicate that firms without risk committee (RC) performed considerably well than firms with RC. The results are contradictory to Walker’s (2009) where RCs are recommended for their ability to mitigate and manage risks more expertly. However, we argue that establish strong RC constrain management ability to make excessive risk taking behaviour which may affect financial performance negatively. We contribute to the current research on the impact of risk committee governance attributes on financial performance after banking and governance reforms.

Yes / Despite the growing research on the influence of stakeholder integration on organizational outcomes, our understanding of the specific firm-level conditions that may mediate the relationship between stakeholder integration and financial performance is lacking. Using primary data gathered from 233 small and medium-sized enterprises in Ghana, we found empirical support for our contention that the link between stakeholder integration and financial performance is mediated by a firm’s environmental sustainability orientation. In addition, our study demonstrated that competitive intensity moderates the indirect relationship between stakeholder integration and financial performance in such a way that the indirect effect through environmental sustainability orientation is stronger for higher levels of industry competition. We discuss theoretical and managerial implications of these findings.