The impact of corruption on companies' engagement in sustainability reporting practices: an empirical examination

Purpose: This paper aims to investigate whether the perceived level of corruption influences companies' decision to address principles and standards aimed, inter alia, at fighting corruption [i.e. Sustainable Development Goals (SDGs), (2) United Nations Global Compact (UNGC), (3) International Standards Organisation (ISO) 26,000 and (4) Organisation for Economic Co-operation and Development (OECD) Guidelines] in companies' sustainability reporting. Design/methodology/approach: The paper uses a sample of 1,171 sustainability reports published in the year 2017 by organisations from Asia and Africa's low- and middle-income countries. Findings: Results from the Probit model reveal that corruption negatively affects corporate sustainability reporting activity. Indeed, the more companies are exposed to high levels of corruption, the less likely they appear to engage in sustainability reporting. Furthermore, the authors find clear regional and sector-level differences in the extent to which companies engage in sustainability reporting. The results show that Asian companies operating in the agricultural and financial services sectors exhibit significantly higher reporting activity, whilst those operating in the construction and mining sectors report less than the sectors' peers. Research limitations/implications: The authors' findings provide important implications for understanding companies' behaviour in the sustainability reporting in emerging economies as well as for designing corporate social responsibility (CSR) disclosure initiatives in the future. Originality/value: This paper provides a better understanding of the impact of corruption on companies' reporting behaviour in the context of emerging economies.