Relationship Between Sustainability Reporting and Competitive Advantage of Firms Listed at the Nairobi Securities Exchange, Kenya

Abstract

Sustainability reporting is a method of interrogating an organization’socommitment to sustainable development inoaoway that can be demonstratedoto stakeholders by reporting both financialoand non-financial data. Inotoday’s age, firmsoshouldotake accountability foroandodisclose impacts ofotheir operations onotheooverall society and environmentoinowhich they exist. Organizations have increasingly embraced sustainability reporting. In the last five years, different companies have been issuing profit warnings in Nairobi Stock Exchange highlighting poor performance. The general objective of theostudyowas to determine the relationshipobetween sustainability reporting and competitive advantage of firmsolisted at the Nairobi SecuritiesoExchange. This study was anchored on Stakeholder theory and Legitimacy theory. The study usedodescriptive cross-sectional survey. The population target forothisostudy was the entire 63 firms at the Nairobi Securities Exchange. Study was based on primary data that was collected through online questionnaire. The study used multiple regression method. It was found out that economic, social and environmental factors influence sustainable reporting at moderate extent. The findings establishedotheoexistence of a strong positive correlation between sustainable reporting and competitive advantage. The study concludes that the number of companies who issue sustainability o reports has significantly increased during the last decade. Various researches have been conducted over the last decade for examining the linkage between sustainability reporting and corporate ary dialogue process with the stakeholders so that they may be able to identify closely just who its stakeholders are.The research also recommends that professional and regulatory bodies need to provide guidelines that help companies to prepare and publish timely,readily accessible and reliable environmental information to satisfy the interests of stakeholders.